What is Network Marketing?

Are you looking to generate an extra income? Are you looking out for a business opportunity to become an entrepreneur? Or are you looking at a career that lets you earn your livelihood?  Joining a Network Marketing company as an Independent Distributor can be your viable option.

Well, then, what is a Network Marketing business, and how does it help you earn an income?

Simply put, the Network Marketing business is all about interpersonal relationships that extend into building a successful business and career.

When you partner with a Network Marketing company as an Independent Distributor, you share and sell their quality products or services with your known contacts. And that, explains in brief, what a Network Marketing business is all about!

This article delves into and explains more about Network Marketing, also known as Multilevel Marketing (MLM) or Direct Selling.

The Advent of Network Marketing in India

The 1980s saw Network Marketing as the fastest growing sector worldwide. The Direct Selling industry that generated USD 12 billion in 1988 doubled to USD 24 billion in 1998. In India, the Network Marketing industry in its nascent stage was around INR 6 billion in 1999.

Before the 1990s, i.e., the pre-liberalization era, Network Marketing in India existed in various chit fund schemes. Later on, we saw companies like Eureka Forbes pioneer Direct Selling by employing salespeople trained to make door-to-door sales.

In 1995, Oriflame International was the first international company that began its operations in India, followed by the entry of Tupperware and Avon in 1996. Modicare was the first homegrown MLM company started in 1996 but spread mainly across northern and western India.

The Network Marketing industry, in its initial stages in the 2000s, shot into the limelight during the Covid-19 pandemic. At a time when most industries struggled to survive, the Network Marketing industry provided livelihoods to millions. It also showed them a way to attain financial freedom and become entrepreneurs.

Today, the Direct Selling industry is talked about as being relevant for India because of its fragmented retail structure and high brand proliferation, limiting shelf-space.

Busting a Few Myths About Network Marketing

When a salesperson comes knocking at your door to sell a company product, we are reluctant to entertain them most of the time. We decline to look at their offerings by giving a reason that we do not need them. Most salespeople do not get a chance to explain their products.

There is always a feeling that the salesperson is around to flatter and make a sale. That’s the reason we think twice before entertaining them or letting them showcase their products. Though this misconception about Network Marketing still exists in our country, it has come down. It is, therefore, necessary for you to know the myths and truths surrounding Network Marketing.

It is a myth that the MLM business is an illegal pyramid structure. Most often, people misunderstand a permissible MLM business with a pyramid structure. That is not true at all. The illegal pyramid structure makes use of your money by recruiting layers of downlines. You do not sell anything except recruiting more people under you. You do not benefit much by growing your downline network either. However, a permissible MLM business involves selling a product or service directly or indirectly to your customers.

It is a myth that only the topmost people make big profits. This myth means that only the owner of the business or the CEO makes a profit and no one else! And that is not at all true. The truth is that as a distributor, you, as well as your downlines make a profit. Your income and that of your downline are directly proportional to the efforts put in. You earn commissions for the products or services you sell. You are incentivized for recruiting more salespeople. And you also earn a residual income from the efforts of your downline and their downline.

There are other myths about Network Marketing that you should not pay any heed to. The truth about Network Marketing is that it is just like any other business. You should join a Network Marketing company confidently without bothering about the myths that surround it.

The following sections will help you know more about Network Marketing and how it can enable you to attain financial freedom and become future entrepreneurs.

More About Network Marketing

Network Marketing is a direct selling business model. It is also referred to as Multilevel Marketing (MLM), or Referral Marketing or simply Direct Selling.

What is Direct Selling?

Simply put, Direct Selling means directly selling goods or services to consumers! Direct Selling does not involve any intermediaries or any retail stores in between. It does not happen in a shop.

Network Marketing involves salespeople, commonly known as Independent Distributors or Direct Sellers or Network Marketers. They work independently promoting and selling products or services of the MLM company with which they partner.

The products sold by a Direct Sales company are usually not found off the shelf in shops or departmental stores, or supermarkets. You can obtain such products only by contacting a Distributor of the Direct Selling company.

Network Marketing – Earnings Via Commissions and Incentives

The salespeople who work independently earn via attractive commissions and lucrative incentives. Direct Sellers earn an income when they sell products or services of the company.

You also get incentivized for recruiting more salespeople who get placed under you in the company’s sales network – commonly known as the downline.

Network Marketing – Earning Via a Residual Income

Your earnings do not stop at just receiving commissions and incentives. You also earn a percentage of the commissions on the sales executed by your downline and their downline. The income earned without any effort from you, but your downlines are the residual income.

Reasons to Join a Network Marketing Company

Network Marketing is a great option to earn a second income or your livelihood. You can run your Network Marketing business part-time or full-time.

There are no criteria to join a Network Marketing business. You can flexibly work during convenient hours. And the investment needed to start your Network Marketing business is negligible. Further, other valid reasons listed below will make you comfortable partnering with a Direct Selling company with full confidence.

Direct Selling is Now a Career Option

Direct Selling is no more a sidelined or looked down upon option to do some work. It is an addition to the already existing long list of career options in India.

A PG in Direct Selling has recently been introduced by IDSA (Indian Direct Selling Association) in academics collaborating with Shoolin University.

It is a great option for those wanting to attain financial independence or looking to become entrepreneurs. The Direct Selling industry aligns with the government’s vision of a self-reliant India by providing self-employment to millions of people, especially seen during the pandemic.

Direct Selling Industry – Boosted by Government Initiatives

The Indian government has boosted the Direct Selling industry with several initiatives like Make in India, Startup India, Women Empowerment, Skill India, and Vocal for Local.

The Direct Selling industry has nicely aligned itself with government’s initiatives. It needs to be noted that more than half the workforce employed by the Direct Selling companies are women. That’s very much in line with the government’s initiative of Women Empowerment.

Also, by tying up with local manufacturers to sell their products, the Direct Selling companies are very much supporting the government’s Make in India initiative under the Aatmanirbhar Bharat banner.

Direct Selling Investor Interests – Safeguarded by the Government

There was a time when many innocent investors were duped by companies operating as MLM companies but incorporating the illegal pyramid business model. It even earned a bad reputation for the MLM industry as a whole. However, it is a thing of the past.

The Indian government has recognized the importance of the Direct Selling industry. The Direct Selling industry generates self-employment. And it is also a substantial revenue generator for the government.

To protect the interests of the investors opting to join a Network Marketing company, the government has recently drafted regulations rendering companies that incorporate the pyramid business model illegal.

Further, the government has also made it mandatory for Direct Selling companies to register with a governing body and have a permanent office address in India.

Conclusion: Join Network Marketing with confidence and without any second thoughts.

Now that you know what Network Marketing is, and now that you know that there are no criteria to join a network marketing company, it has made it easier for you to look at it as an option to earn something extra.

Now that you know how the government is supporting the Direct Selling industry, and now that you know that Direct Selling has been introduced in academics as a career option, it has made it easier for you to consider it a full-time livelihood option.

You can take up the Network Marketing business as a part-time or full-time option. Accordingly, it allows you to earn a second income or a livelihood. However, Direct Selling is not a get-rich-quick scheme. Your success depends on the smart efforts that you put in.

Starting a Direct Selling business involves negligible investment and startup costs. You are well supported by the company with whom you partner – they strive to ensure your success. And your interests today are well safeguarded by the government. When there’s so much positivity in the air about the Multilevel Marketing business, it makes sense to join one. Part-time or full-time, a second income or financial freedom – the choice is yours! Go for it.