How Does Network Marketing Works?

If you are interested to know how really network marketing works, then here you go, read ahead further.

Network marketing is one of the most exciting and interesting business opportunity that is currently helping more than thousands of families across the globe, to earn a standard handsome income. Before we even continue with this realistic article, here, it is of utmost importance for us to completely understand the concept and how it is to be useful in our real life situation.

As an example, let us consider one of the most popular products of the world that is well known to all of us, from any part of the world. People do consume a whole lot of this and that is nothing but the Coca Cola. The chilled bottle of Coca Cola is finding its place in your fridge most often conveniently, how it is happening so. There are so many middle men that have brought it to your fridge. Even before you had purchased it from the nearby shop or got it door delivered from the retailer nearby, there are so many hands that had handled the bottle already, to bring in from the manufacturing facility to the spot of consumption. The product was produced in a factory originally where it was bottled too. Major distributors of the product will then be receiving the item. It is kept in their warehouse for a while. Then it is sent to the wholesalers. Then the wholesalers sell it in smaller chunks to the retailers.

Then comes in the supermarket and the retail stores and then finally the end user the purchases the commodity. This is quite a conventional method of marketing a product and distributing it to the end user finally. Now, guess what happens here. The actual manufacturing cost of the commodity can be far less from what you are buying it from the retail store. But nevertheless, the major distributors are not going to buy and sell it to the wholesaler without any profits for his own side. So, does the wholesaler and the retailer too. The conventional retail chain is longer.Most of the middlemen involved in the process of distribution make money with the exception of the end user. The irony is that, you cannot go to a factory and ask for a couple of products to be sold to you. That is impractical. You cannot buy two Coca Cola bottles from the Coca Cola manufacturing facility. They do not sell so. They sell in large cases to the major distributors.

We need to wait to buy the commodity all until the retail store is able to get the goods from the wholesaler. The network marketing and its distribution mode is totally different and discreet though. Referral marketing or the direct marketing is what we call it to be. Producers as well as the network marketers prefer to sell the product or service directly to the consumer. As there are no middlemen involved here, people can sign up into the mode of distribution directly. Distributor gets the commodity from the producers for very low rates. When they sell it to the others in the neighborhood, they make profits out of every single purchase. Along with that you earn commission for all those people that you pull into the network as new distributors.

Products are sold directly to the customers here in the concept of network marketing. There is no big money spent for advertisements or marketing or business promotions. You use the influence of your own in your neighborhood and sell products based upon the genuine trust and relationship basis. Naturally, when the product is good, then more sales can happen and you gain more profits over a period. As there are no big expenses in the form of advertisement costs for the producer, big chunk of commissions are paid as bonuses to the distributors regularly. Apart from that additional amount of money can be made in the form of commissions through referring new people to the business and out of the sales generated in the down line. This makes the network marketing concept to be one amazing method to make some good income either in your free time or even in full time as you please to do so.

So, you make money in multiple streams here in the network marketing concept as a distributor but yet that is not all. There is something more added on to it and that is nothing but the passive income or the residual income. When you are sleeping in the night you will still be making money through this concept. Yes, literally speaking, you get paid for what you are not doing. There are so many passive income modes like trading in the stocks, real estate sector or fixed deposits and so on, but the interests that you accrue or either less, or else you need to invest a lot of money upfront and also there may be risks of blocking money or jeopardizing the money as a whole in some cases as well.Yet, the concept of network marketing is totally different. You are not paying any big capital money to the bank or to the share traders or any company as such, but you are able to make some decent money as passive income. This is something interesting and that is what pulls in the attraction of the majority of the people to pay heed to what we have to say here. You make money out of the commissions that you earn from all the sales that is happening in your down line for all throughout your life time.