Canught Place (New Delhi-India) is a nice place to have an office space but maybe you can’t afford to have one there. Perhaps your company is the greatest ever, but you will connect with more prospects if you have a wider knowledge of the business and can answer questions confidently. Here are the must-know basics of the Direct Selling or Network Marketing business:
- Whether you are a party planner or a network or multilevel marketer, you are in the business of direct selling. Direct selling describes the sale of goods and services direct to the consumer rather than from a fixed retail location.
- The global direct selling market exceeds $184 billion in sales per year.
- Direct selling is strong in Canada, Australia, Europe, and South America. With their massive populations, Asia, India, Russia, and China are emerging markets with mind-boggling potential.
- Just about every product or service imaginable is available through direct selling channels. Home products—such as cleaning, cookware, home decor, foods, and pet care—account for the largest share at 33.5%. Personal care products—such as skincare, cosmetics, fragrances, and jewellery—come in second place at 28.2%. Services—such as financial, travel, and communications—contribute 10%. Wellness products, which include nutritional supplements, beverages, and weight loss products, add 20.9%. Leisure and educational products contribute by 7.4 per cent.
- Four out of five direct sellers are women, and 20% of businesses are run as partnerships, primarily by married couples.
- Network marketing (also known as multilevel marketing) is an extension of direct selling. While direct selling refers to how products are sold, network or multilevel marketing refers to how you are paid for building your organization.
- In addition to being paid on your sales, you earn income on the sales of people you recruit (or enrol, introduce, or sponsor) into the business. This includes both direct recruits (people you personally recruit) and indirect recruits (people recruited by the people you recruit). Both direct and indirect recruits belong in your downline organization.
- The term width is used to describe people you personally recruit (your first levels), and the term depth is used to describe people recruited by your first levels (and your second levels, third levels, etc.).
- The term leg describes the genealogy of your recruits— that is, the people recruited downline from each of your first levels.
- The higher your rank on the compensation plan, the higher the percentage you earn on your recruits.
- How can network marketing corporations afford to redistribute half of their revenue while maintaining the quality and integrity of their products? That’s easy. Whereas traditional marketers rely on media advertising, sponsorships, and celebrity endorsements to promote their products and services (think INR 18,68,49,250 for just one thirty-second commercial during the Cricket Match in India), network marketing corporations pay you to share your experience, belief, and enthusiasm in your products with others.
- There is more. Unlike hapless retailers who must buy and store products to sell, network marketers carry little or no inventory. The corporation takes care of production, packaging, inventory, and shipping. Many corporations ship directly to your customers, freeing you to spend more time doing what you are paid to do, which is to sell products and recruit and train others to do the same. Many corporations auto-ship to customers on a regular cycle. You still get paid for these sales.
- Direct sellers do not have to worry about the cost of returns or exchanges. If a product is unsatisfactory or damaged, the corporation is responsible for refunds or replacements.
- From a business and tax perspective, direct sellers are classified as independent, self-employed operators or contractors, although they use a variety of titles such as representatives, distributors, associates, stylists, coordinators, consultants, specialists, advisers, or business owners. Their income comes from commissions, bonuses, and overrides on personal and group sales, typically on an escalating scale. The higher their sales, the higher the percentage they earn.
Now I think you have sufficient must-know basics regarding Direct selling or Network Marketing.
Happy Networking!
