Network marketing (also NWM - network marketing, MLM - Multi level marketing, structure selling or Affiliate marketing mentioned and often equated with "pyramid system") is a multi-level form of the direct sales and would have correct-proves "MLS" (Multi level Sales) to be called. It designates substitution of conventional salesman structures by a hierarchical form from "customer to customer" sales. Customers are paid as free commercial agents actively and by the enterprise for sales, for which the enterprise would have paid otherwise advertisement. As Upline all and Downline all participants standing in the hierarchy over a participant under him are called.

Operational principle

With this sales structure several salesman structures stand one above the other, whereby above all the lower structures maintain intensive customer contacts. In contrast to classical salesman structures of wholesale, intermediate trade and retail trade the balances, for which the customer pays in the long run 100%, are defined not over the structure, but by the manufacturer directly. The customer buys directly with a manufacturer and can on freiwilliger basis the task take over, who to classical sales structures the wholesale, intermediate trade or retail trade to transfer and other customers win, who likewise buy with the manufacturer; it keeps direct for it from the manufacturer financial payments, which compute themselves proportionally on the entire obtained conversion per month. Expenditures for advertisement in TV and press are void, why network marketing does not contribute herein to the forming of an opinion. The term "of the snow ball system frequently hereby confounded "is used for an illegal variant of the MLM, with which the Akquise of new coworkers stands in the foreground, and not the selling of a product.

The organisational structure of the MLM resembles graphic a pyramid with a multiplicity of involved one on the basis basis and few at the point. To the direct salesman - depending upon remuneration plan - a certain part of the total commission is not recompensed, but remains with the involved one, it enlisted and with its promoter (English "ton sponsor" = to promote). Here clear commission portions are assigned to each level, whereby the ascent is bound to certain monthly turnover results into the next higher level with most network marketing enterprises (see in addition hierarchical structures in the wholesale - national leader, range leader, department manager, team leader, salesman). Often these turnover defaults with pressure are kept, why network marketing stands frequently in the criticism. The reason is the missing learning readiness of the "new A RISERs", which are not ready to acquire themselves the nature of the business. In the comparison to "recommendation marketing "it predominantly concerns work with sales pressure and exaggerated advertising statements. This promotes that good companies are reviled frequently by carelessly working "salesmen". Frequently dezenter pressure is exerted to transact starting investment and a camp put on themselves. Humans become imprisoned, similar in dreams after "fast money" as with with "Lotto "and "gambling ". Few humans compare most with the selection of a network marketing enterprise and let themselves from hotel meetings with high commission promises be lured. Many network enterprises decided due to these negative experiences to a Kodex of ethical behavior and to border itself thereby consciously from enterprises, which work with unrealistic promises and internal pressure.

The absolute commission portion per turnover portion decreases however usually upward within the structure. The total commission cumulated rises however with the number directly or indirectly enlisted customers/salesmen over the individual stages away substantially. The involved ones received in principle no salaries or comparable firm to grow success-independent payments, which enterprises permit, inquire-oriented and permit humans, no linear alike remaining to gain but a progressive income.

In contrast to the capital goods market the consultation runs frequently after standardized sales manuals off, whereby contrary to the sale the creation of a personal relations level is more strongly pronounced. Functions in respectable network marketing therefore only with high-quality consumer goods. Many humans fall themselves however on companies with so-called "consumer durables" and not using "consumer goods" in here, why the sales pressure continues to rise.

Articles in category "Network marketing"

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Related Websites

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