MLM Software

What is Network Marketing and How does it work?

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Everyone out there would have come across the term network marketing and MLM Software at some point of time or the other.
This blog post has everything you need to know about network marketing.

What is Network Marketing?

It is a method of direct selling wherein a company markets and sells its products by a group of independent distributors. These distributors earn a commission on the products they sell. In addition to this, they recruit new members under them and also earn commission on the sales they generate.

They are different strategies to earn commissions like lead generation, recruiting and marketing.

Network marketing is known by various names like multi level marketing, cellular marketing , affiliate marketing , consume direct marketing , refferal marketing and home based franchising.

How does it work?

The way network marketing functions and earns you income largely depends on the plan you are in. There are different kinds of plans that are adopted by various companies around the world. We will discuss them in detail in the next section.
In today’s day and age, network marketing companies have gone online and
In general, you would have to purchase a starter kit from the company , also known as registration package.This kit could have a assorted selection of the company’s products at a discounted rate, materials to help you promote business and do sales.

Imagine a scenario when one of your friends or accomplices is so fascinated by the products you sell and want to do the sales himself. You can then sign him up as an affiliate under you and you would earn commission on the sales he will make. When he signs up other affiliates below him, you will earn a fraction of the commissions based on the sales they would generate, but this would obviously be less than the commission that your recruit would earn.

Network Marketing Plans

Network marketing plan followed by a company is important for any network marketer. The commission he earns on the sale would depend on the plan followed by the company.

Here is a brief description of the MLM compensation plans followed by companies around the world. There are certain companies that combine one or more plans and come up with their own customised plan.

#1. Binary MLM Plan

Here, each person in the network has to sponsor two members. The new representative is placed on either the left or right leg of a sponsor depending upon the availability of the position. If a person recruits more than two members, then the third person will move on to to the next available vacancy in the network tree.

Read more on: Binary MLM Software

#2. Unilevel MLM Plan

Under this plan, a person in the network recruits as many down line members as possible and recruits them evenly. He can sponsor just a single line of distributors but it can extend to any depth. There would also be no spillover in this case.

The commissions are paid till a limited depth which is set by the company. A minimum member volume is required to earn a commission and hence, it is a very convenient plan for part timers.

Read more on: Unilevel MLM Software

#3. Matrix MLM Plan

Matrix plan limits the number of people you can sponsor on your first level. You will earn commissions only upto a particular depth. For example in a 2×3 matrix, you can sponsor 2 members to your downline and they will, in turn sponsor two other members. You will earn commissions upto three levels down.

Read more on: Matrix MLM Software

#4. Party MLM Plan

A representative of the company organises house parties where sales take place. There will be a short presentation of the products and then comes the time for sampling and placing orders. In the meantime, refreshments are served. The party attendees can place orders through the website of the company and the hostess will earn commission on the purchases they do.

Read more on: Party plan MLM Software

#5. Stair step MLM Plan

Here, the members in the network are responsible for both personal and group sales. He can generate his sales volume by retailing the products as well as recruiting new members in the downline.

A representative with one or more downline members becomes a group leader. Once a predefined sales volume is achieved, he would move up astep. This would go on till he breaks away from his upline.

So, at any point of time, a group would consist of a predefined set of members.

Read more on: Stair step MLM Plan Software

#6. Generation MLM Plan

A generation would typically consist of a whole volume from upline to downline. So, volume from you to the consecutive person in your downline will form a generation. This member might be of the same rank or higher rank than you.The next generation would be from this member to the next member in his downline. Every person will encourage his downline to generate more sales so that he would be rewarded with incentives and bonuses in return.

Read more on: MLM Generation plan Software

#7. Gift MLM Plan

This plan follows a simple system of give and take where a person will give a gift, either in cash or kind , to another person and in turn will get gifts from other members in the network. He can choose whether he wants to receive the gift every day, week or month.
Usually a company keeps track of the sending and receiving process and charges a fee for the management.

Read more on: Gift Plan MLM Software

Popular Network Marketing Companies in the world

There are a lot of network marketing companies in the world offering excellent compensations. You would want to select one that sells products that you are comfortable selling. Most of these companies sell health care, nutritional , lifestyle and beauty products.
Here is a list of network marketing companies that has done exceedingly well in 2018.

  1. Amway
  2. Avon
  3. Hebalife
  4. Tupperware
  5. Oriflame
  6. Nuskin
  7. Usana
  8. Legalshield
  9. 4Life
  10. Melaleuca

Read more on: Top 10 MLM & Network Marketing Companies of 2018

Network marketing is a great business opportunity to break free from 9 to 5 desk job and earn as much income or probably a lot more. MLM software are available to help you manage the business a lot more easier.

Make use of network marketing and earn that lifestyle you always dreamed of. You can thank us later!

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