Business Network Marketing: What Is It, How Does It Work, and What Are the Benefits

jlk – Network marketing business, also known as multi-level marketing (MLM), is one of the promising businesses in the future.

However, not everyone understands what network marketing business is, how it works, and what its benefits are.

Many consider this business as fake, a scam, or even forbidden. Is that really the case? Let’s explore the following explanation.

What is Network Marketing Business?

Network marketing business is a product marketing strategy through direct sales with a multi-level system.

In this business, you need to recruit more people to help market the products. The profits earned from personal sales and sales bonuses from recruited salespeople will be distributed according to levels.

This means that the more salespeople recruited, the higher the income and bonuses received by the recruiter.

This multi-level system then forms the term pyramid sales. The more people recruited, the higher the position of the recruiter.

In network marketing business, there are two terms that must be understood, namely downline and upline.

Downline is subordinates or people recruited in the business to sell products together.

While upline is a superior, recruiter, or someone who has previously made sales and successfully recruited new salespeople to be ‘paired’ as downline.

In essence, the tasks of downline and upline in network marketing business are not much different. They both become direct distributors selling products to the public.

Not only that, both upline and downline must continuously promote the benefits gained while doing business so that more new recruits join.

How Does Network Marketing Business Work?

Network marketing business works by relying on a stable and efficient distribution network that directly reaches consumers. Companies do not need to spend money on advertising because their products are already promoted by distributors.

Additionally, the company doesn’t have to pay salaries or commissions to distributors because they earn income from product sales and bonuses from downline sales.

The workings of network marketing business can be explained with an example. Suppose you join a network marketing company that sells health products.

You buy the product for Rp 100,000 per bottle and sell it for Rp 150,000 per bottle. From there, you already make a profit of Rp 50,000 per bottle.

Next, you recruit five people to be your downline. They also buy the product for Rp 100,000 per bottle and sell it for Rp 150,000 per bottle.

From each sale made by your downline, you get a bonus of Rp 10,000 per bottle. So, if each of your downline sells 10 bottles per month, you will get a bonus of Rp 500,000 per month.

But, it doesn’t end there. Your downline can also recruit more people, and you will also get a bonus from the sales of your second-level downline.

For example, each of your downline recruits two more people, and you get a bonus of Rp 5,000 per bottle from the sales of your second-level downline.

If your second-level downline each sells 10 bottles per month, you will get an additional bonus of Rp 500,000 per month.

Thus, your total monthly income from network marketing business is Rp 1,000,000 from downline sales bonuses, plus Rp 50,000 from personal sales, or Rp 1,050,000 per month. And that’s just from five downline and 10 second-level downline.

Imagine if you have more downline and second-level downline, or if you and your downline can sell more products per month. Your income could be much higher.

What Are the Benefits of Network Marketing Business?

Network marketing business has many benefits, both for the company and for distributors.

Here are some benefits you can get from network marketing business:

1. No scale limitations: You can recruit as many people as possible to be your downline and earn bonuses from their sales. You can also sell as many products as possible without any quota or target.
2. No operational costs: You don’t need to rent an office, store, or warehouse to run this business. You also don’t need to pay for electricity, water, phone, or internet. You can run this business from home, or even from anywhere, as long as you have the products and network.
3. No risk: You don’t need to invest a large amount of money to start this business. You just need to buy products at wholesale prices and sell them at retail prices. You also don’t need to worry about losses because you can return unsold products to the company and get your money back.
4. No dependence: You don’t have to rely on bosses, working hours, or monthly salaries. You can determine when you want to work, how long you want to work, and how much income you want. You can also enjoy financial, time, and location freedom.
5. No competition: You don’t need to compete with other distributors because you can work together. You can help each other, share knowledge, and share experiences. You can also get support and motivation from your upline and downline.

Conclusion

Network marketing business is a business that offers many benefits, both for the company and for distributors.

With a simple yet effective working system, this business can provide significant income without having to incur large costs or risks.

However, this business also requires commitment, hard work, and consistency from distributors. There is no successful business without effort.

So, are you interested in joining the network marketing business? If yes, there are some things you need to consider before choosing the right network marketing company.

First, make sure the company is registered with the Indonesian Direct Selling Association (APLI), which regulates and oversees network marketing businesses in Indonesia.

Second, ensure that the products offered by the company are of high quality, useful, and have high demand in the market.

Third, make sure the compensation system offered by the company is fair, transparent, and beneficial for all parties.

Network marketing business is not an easy business, but it’s also not an impossible one. With determination, effort, and the right strategy, you can achieve success in this business.

I hope this article is useful for those who want to start or develop a network marketing business. Happy business!