The method of promoting and selling a good or service in a face-to-face relationship by the sales representative is called direct selling. Network marketing is also an improved version of direct selling. In network marketing, sales representatives can earn money in two ways. The first one is the income they earn in line with the sales they make, and the other is the income from the sales made by the people they join their teams. In fact, network marketing can also be considered as a business model that allows people to start and develop their own business.
Born in the United States, the homeland of capitalist systems, network marketing, the network marketing system, emerged as a result of research conducted by a company for sales. As a result of the research conducted by a company, the sales representative increased, the same rate of sales increased. The firm that deepened the research determined that the biggest factor in the increase in sales was the communication between the sales representatives and their relatives. The company has noticed this system and has progressed the business and commissioned its customers who are satisfied with their products, and asked them to recommend their products to their relatives. In short, network marketing is a marketing strategy based on advice.
The Birth of Network Marketing
According to many experts, Carl Rehborg is the first to use the network marketing system. Believing in the power of the recommendation, Rehborg started sales in 1934 by establishing a company called California Vitamin Company. In 1945, he founded the company Nutrilite Products by perfecting the network marketing system. This firm has also led to the emergence of other marketing giants over time. Nutrilite Products distributors Rich DeVos and Jay Van Andel left the company and established the company Amway Corporation. In 1994, with the start of operations in our country, Turkey also became acquainted with network marketing.
Network Marketing System
The network marketing system, which can be considered as a different sales technique, is the promotion of the goods or services in the homes or offices, in short, where the point of sale cannot be counted, to be sold face to face by the sales representatives. The sales representative also makes a profit on the product he sells. This is a direct sale. Network marketing is a multi-level marketing system. In other words, the sales representative receives commission from both the product or service he sells and the product or service he sells to the team. When it is understood that the network marketing system is more effective than many advertising models, it has started to become widespread all over the world.
Some believe that the network marketing system was invented by Carl Rehborg in 1934, but there are some who argue that it emerged with a Cambridge doctoral thesis. Therefore, there is still no certain opinion about the inventor of the network marketing system. However, there is Amway Corporation, which still operates today by implementing this system. The founders of the company serving in 80 different countries are Rich DeVos and Jay Ven Andel, who have had the opportunity to work with Rehborg. Some other companies that use the network marketing system worldwide are as follows; Avon, Dione, Agel, Calivita, Biobellinda etc.
With the development of technology in the 21st century and the growing market, the network marketing system has expanded to its capability. The system continues today in its original logic. world system spread beyond the United States border, do not see the need in Turkey has also reached 1 million participants. Generally, university students or housewives use the network marketing system to generate additional income.
Benefits of Network Marketing System to Participant
The first gain of a person who is included in the network marketing system is that he or his family can buy the products that he / she needs, at the wholesale price instead of the consumer price. Although it varies from company to company, the discount applied to sales representatives is between 20 percent and 40 percent. Although this gain as a consumer may seem small when viewed from the outside, it is an advantage that will never be underestimated for sales representatives working in a company with a wide range of products.
The second advantage is that income increases as you sell. When you enter the system for the first time, you do not have a team yet, it constitutes a large part of the sales representative's income. In the network marketing market, it is not considered appropriate to sell door to door. Therefore, the people involved in the system are concentrating their sales policies on the people around them.
The third benefit is the team building phase that will enable the sales representative to exceed a certain threshold in terms of income level. With the incentive plan of the company you are affiliated to, you start to receive a premium according to the sales rate of the people in your team. These premiums are the driving force of the network marketing system, in short, the opportunity it offers. In countries where network marketing system is used, people who get premium by forming a team have become rich.
Benefits of Network Market's System to Consumers
The biggest benefit of the network marketing system to the consumer is that they can purchase the products at affordable prices due to the elimination of intermediaries, the elimination of expenses such as advertising, store rental, and employee salaries.
The second advantage is that it can get very detailed information about the product it will buy. The person selling the product is usually a customer acquaintance or relative. The consumer can get every document that gives information about the product he wants to buy from the sales representative or even ask him to tell him verbally. This is a very special service in the face of the advertising pressure suffered by today's consumers.
The third advantage is mainly for consumers in regions where retail channels do not develop. It provides the opportunity to purchase and access products for these people. Consumers living in such places cannot buy because they do not find the product they want at retail points, even if their income levels are available. Network marketing system overcomes this obstacle and enables the product or service to meet the consumer.
Is Network Marketing System Legal?
Network marketing system is completely legal in our country and taxed with 20 percent withholding. However, we are still approaching this system because we are in the class about social fraud. Fraud systems, called the chain of happiness, or the pyramid system, also prevented the development of the network marketing system. If the initial capital is too high, know that you want to be taken into the chain of happiness.