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Written by Diep Tran
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Friday, 20 April 2007 |
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Word Count: 626 Network Marketing MLM Strategy; Generating More Income by Helping Others
Many people and companies have abused the word network marketing MLM in the
past years that a lot of people will associate the word with something that is
negative. Yet, if you take a look at the nature of network marketing, you will
not find anything that is intrinsically bad about this system. Since the first
network marketing MLM company was introduced in the United States in the 1940's,
the network marketing MLM strategy of most networking company have been
consistent. The strategy is to distribute the products through local channels
thereby saving on distribution cost and at the same time providing some
alternative income for those people who would like to be an independent
distributor of the product. Although there are some variations in the
implementation of the network marketing MLM strategy, the basic principles
underlying the implementation thereof is still the same.
Distribution through local distributors
Network marketing MLM aims at helping the manufacturers market their products to
the end consumers via independent local distributors. By engaging local
distributors to market the products of the company, the company is able to
generate more income and save on distribution and advertising cost.
Most companies would spend thousands of dollars to promote their products
through TV commercials and advertising, billboards and other forms of media.
Promoting products and brands could cost the company a lot of money that a good
portion of the cost that you pay for a certain product is actually added in to
defray the advertising and promotion expenses. In some cases, as much as 20% of
the cost of the product you buy goes to advertising and promotions. On the other
hand, the distribution cost of the products would eat up to another 30% of the
product cost. If you are wondering why a certain product that you buy in the
supermarket could cost a lot of money, it is because of the advertising,
promotion and distribution cost that is factored into the total product cost.
Since the network marketing MLM strategy will do away the promotion and
advertising cost by engaging local distributors to personally promote the
products to the their friends, relatives and colleagues, the company will now be
able to give the distributors big commissions. In most instances, the network
marketing MLM company will give the local distributors direct commissions of up
to 30% of the sales generated by a local distributor.
On the other hand, when it comes to expanding the market reach of the product,
the network marketing MLM strategy that is employed is the member get member
scheme whereby a certain member you is able to recruit a new member will be
eligible to earn commissions on the sales generated by the new member that he or
she has recruited. The good thing about the member get member scheme is that it
does not stop on the person that you have directly recruited. In the event where
the person you have recruited will recruit a new member, you will also earn
commissions on the sales of that recruit. In most cases, the networking company
MLM will allow you to earn commissions up to the 8th level of recruits.
Internet home based network marketing MLM has no large capital investment, no
quotas on production and you are not limited in where in the country you can
live. There are also tax advantages to a home based business online, not to
mention the additional income that everyone can find useful.
Diep Tran is Internet marketer, and webmaster of Internet Home Based Business Opportunities. Visit his website forMake Money Online Ideas. |
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