Types of Network Marketing Businesses
Most network marketing companies operate as some form of multi-level marketing plan, where the company provides a product or service and assigns agents to sell it. This setup gives the sales reps an opportunity to earn a commission by selling products, and recruiting new reps and growing their own little network.
Direct marketing works in a similar fashion, where a product line is launched to the market, and the company invests in a range of marketing materials including training and tools to help the new investors become successful. Commission largely depends on the number of items sold over a period of time and if there is an existing market to tap into, products can sell out in large volumes.
Individuals seeking out a more family-friendly type of network marketing could try out party plans, which are popular with parents who want an additional revenue stream. Party plan systems require an initial investment to create websites, buy product demons and relevant marketing materials, but their flexible scheduling makes them ideal for anyone splitting their time between the company and other responsibilities.
Technology allows sales representatives to expand existing networks and tap into new ones in order to establish a wider revenue stream. As their down-line expands, so does the commission and with a big-enough down-line your leg work reduces and you start earning from the new reps. But before you get to this point, you have to select the right type of system and have a plan of action.
The different types of networks
Here are the different structures available in network marketing:
1. Unilevel Structure
This system allows you to earn from your frontline and it doesn’t limit the number of people you can sign. It’s a pretty old system and it’s certainly not the most lucrative but it does promote cross-line competition, which means a higher chance of expansion.
2. Stair Step Breakaway Plan
Perfect for the aggressive marketer, this plan is excellent if you have plenty of time to dedicate to sales. The higher you go up the steps, the more you break up from your own up-line, and in the end you’ll only have people on your down-line, which means people will stop earning from you. If for instance you’re supposed to breakaway at step 7, your up-line won’t earn from you anymore, and you will get all commissions from anyone below you.
3. The Binary System
This system has been popularized by Questnet and it takes significant dedication to earn from. You only get two down-lines with this plan and new sign-ins are automatically under your down-line. In order to make money you have to earn from both down-lines; so when picking out this type of plan, try to get one where you can carry over extra points from the less active binary side.
4. Forced Matrix Plan
This system aims to promote teamwork and it allows newcomers to earn high commissions by combining forces with fellow members. Because it has a defined frontline, the system allows members to focus on signing more people in order to earn on higher levels.
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