The 21st century marketplace has widened far beyond the traditional methods used decades ago. Business owners have realized that they do not have to limit the reach of their sales by focusing on the immediate market around them when they could contract a loose team of marketers all across the nation to sell their products to their respective contacts without having to bear the expenses of expanding their sales team. Network marketing or multi-level marketing provides the fluidity that traditional businesses lack, and is now gaining acceptance across major cities and towns of the world. Available global statistics bear testimony to this.
As of 2019, the global network marketing industry was worth $167 billion. Although this is a dip from the $192 billion value of 2018, the industry has been estimated to hit $200 billion by the end of 2020. Several factors influence the success of network marketing in different parts of the world, and this explains why USA have the leading multi-level marketing industry in the world worth $35.2 billion as of 2019. They are trailed by China ($23.95 b), Korea ($17.68 b), Germany ($17.45 b) and Japan ($15.62 b). The other countries in the top 10 countries with the biggest network marketing such as Brazil, Malaysia, Mexico and France all recorded less than $10 billion in the same year.
It is not clear how much the network marketing industry is worth in Nigeria, largely because it is relatively new and people are still skeptical about its legitimacy. However, going by the growing number of multi-level marketing companies and increase in participation level, it is safe to conclude that network marketing is set to find a foothold in the country. Already, there are many established companies in the country and new ones are joining the trend by the day.
Perhaps what many people enjoy about the direct selling business is that you can operate at your own time and rate and can combine it to your regular job as a way of getting extra income. If you’re considering starting a network marketing business, here is a detailed guide to get you started on the right foot.
What Is Network Marketing?
Also known as direct selling or multi-level marketing, network marketing is a system in which sales representatives sell products on behalf of companies to consumers for commissions. The major difference between network marketing and the regular sales distribution is that sales representatives do not only sell products to consumers but also recruit others into the network. The more sales generated by the ‘downline’ of a sales representatives, the more commissions they get. This pyramid structure makes network marketing appear like a Ponzi scheme but it is a completely legal system of marketing.
What Is A Network Marketing Business?
A network marketing business refers to the process of building a sales link for a company product or service. To start a network marketing company, you do not necessarily have to own a manufacturing company or a physical location. With a team of trusted salespersons who are interested in marketing, you could build a strong network sales representative. An alternative is to join an existing multi-level marketing company. The good thing about starting a direct selling business is that each sales representative takes the risk for their products. This means you do not take the risk for others because they get to pay for their products before claiming them for retail.
Business Opportunities In Network Marketing In Nigeria And Across The World
1). Retail And Supply Services:
The most basic opportunity in home business for everyone who is interested is that you get a retail job which you can take up as a full-scale job or an added business for extra income. This system makes retail service much easier and bridges the gap between manufacturers and end-consumers.
2). E-marketing Services:
Although there are several methods for practicing home business, much of the actual sales occurs on the internet, especially on social media platform where sales representatives get to display their products for friends and acquaintances to see and possibly develop interest.
3). Social Media Advert Placements:
Advert placement is another vital business opportunity associated with network marketing. In addition to the physical person-to-person interactions that occur between sales reps and those around them at home and work, they deploy the services of advert platforms on the internet to make people aware of their products. This includes email marketing and WhatsApp marketing, among others.
4). Delivery Services:
Distribution and delivery drive the success of multi-level marketing. Sales reps and manufacturers work with logistics businesses and nationwide courier services to get their products delivered to other sales reps and end-consumers across the country.
Facts And Benefits Of Network Marketing
- Network marketing is also known as ‘home business’, ‘direct selling’ and ‘multi-level marketing (MLM)’.
- It substitutes the hassles of the regular 9 to 5 jobs.
- Network marketing could be very lucrative. It depends, of course, on your network.
- Network marketing is very flexible.
- It is quite easy to start.
- There are no strict regulations involved in multi-level marketing.
- It involves very little risks.
- Network marketing makes a strong use of the internet and social media.
- It involves no maintenance costs.
- The USA, China, South Korea, Germany, Mexico and Japan are some of the countries with the biggest network marketing industries.
- MLM is based strictly on results. The higher the results the higher the income.
- Direct selling requires little or no educational qualifications.
- There are no licenses, permits, employees, bills or rents involved.
- There is no hierarchical system in multi-level marketing. Everyone has a level playground.
Types Of Network Marketing
1). Health And Wellness:
When classified by the kinds of products, health and wellness products are the most common items distributed via network marketing channels, thanks to the growing consciousness about health and wellbeing among the global populace.
2). Cosmetics And Body Care:
Cosmetics and body care is another broad niche on the multi-level market. They sell faster than most other products mainly because people are constantly willing to try out new skin care, hair care and general body care products.
3). Communication and Internet Services:
Internet and communication services are fast gaining grounds in network marketing. This is perhaps the easiest niche in network marketing because it involves no physical delivery of products. Items purchased are in forms of internet subscription, mobile data and TV subscriptions, payment of utility bills and other related services.
How To Start A Network Marketing Business: A Step-By-Step Guide
1). Study And Understand The System:
It is necessary to understand the structure of multi-level marketing before you delve into it. Whether you are starting a direct selling company of your own from the scratch or you want to join an existing one, you should acquaint yourself with all the information relating to structure, payment, setup and distribution.
2). Choose A Niche:
It helps to focus on a particular niche. If you plan to deal in communication services, stick to it. If cosmetics and skin care products are the items that interest you, you should be upfront with your decisions.
3). Find A Supplier:
Network with manufacturers in the particular niche you selected and make concrete plans with them on how you intend to carry out your network marketing.
4). Set Up A Management Website:
Since there will be lots of people in the downline, it is necessary to make things easy by creating a suitable website where sales representatives can register, make orders, take inventory of goods bought and sold and also get their commissions after sales.
5). Set Up The Price And Commission Structure:
A multi-level marketing business operates basically on referral and commissions. You need to set up the commission structure form the start, so that new sales reps can be informed on the prices of items, the commissions they are entitled to, how many members they need in their immediate downline, as well as every other terms and conditions involved.
6). Advertise Your Business:
Once your website and business structure are all set, you are good to order products from your suppliers and place adverts both for the products and for interested sales representatives.
Challenges Of Network Marketing In Nigeria
- Network marketing is still confronted with skepticism
- High risks of fraud.
- Difficulty in converting sales.
- The structure of multi-level marketing makes it difficult for some sales representatives to increase their earnings.
- Home business involves convincing people to participate. This could be a huge task to do.
- Delay in delivery of products
- Poor road networks affects distribution.
- Some products could be fake or expired, and this adversely affects the trust in your network.
- Multi-level marketing requires lots of patience.
To Sum It Up
Network marketing or multi-level marketing is a promising replacement, or at least, support means of income, for the traditional jobs. There is no doubting that tons of people worldwide are making a living from direct selling without having to sit in an office for long grueling hours. That could be you too! The network marketing business in Nigeria can be a lucrative and profitable venture to start-up, due to its vast market demand and on your ability to build a wide network. If you’re looking for a lucrative business to venture into, the network marketing business in Nigeria is a great option to explore.
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