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Is Network Marketing MLM a lot Different than a Traditional Business?
Opinions on whether a network marketing MLM business is really that much different than a Traditional Business vary greatly. My opinion is that it depends on which part of it you are looking at.
If you are looking at it from a fundamental basis of what makes the business successful, there really isn’t a lot of difference. A traditional business is most successful when a sound business model is used. One that includes a financial plan, effective marketing, quality customer/client relation practices and offers a product or service that is demand by the market place. Network marketing MLM isn’t any different. There are a lot of people in the industry that would like to make you think otherwise but for the most part, if you use the same business principles that have been proven to be effective time and time again in other industries, you’ll have success in network marketing MLM.
The other side of this question of whether or not network marketing mlm is much different than a traditional business is how the actual transaction takes place. This is where the difference become very apparent. As you saw in the video and the diagram below, the way in which network marketing customers receive the product is a lot different from the traditional sense.
Traditional Marketing vs MLM Network Marketing
Traditionally, the product is shipped from the manufacturer, through a series of distributors (ex: national, regional and local) and eventually ends up on the shelves of a retail store. The customer finds about the product through marketing done by the manufacturer or the retail store (depending on product and manufacturer preferences) and if they like what they see (or hear) the customer goes to the store to purchase the product.
In contrast, with the network marketing MLM/Direct Sales business model, the product is shipped directly from the manufacturer to the customer rather than through the distributors to the retail store. The question then becomes, “how does the customer find out about the product?”
This is what makes the network marketing MLM industry so unique and offers all of us an opportunity to have a home business. The only way a customer learns about the product or service that the network marketing company offers is through individual associates of the network marketing company. In return for promoting the products and making sales, the associates are paid a commission (this is similar to the margin the retail store would make on selling the product – less the over head).
There you have it, that’s the difference. Hopefully you can use this knowledge to better educate your potential business partners on the difference between network marketing MLM and traditional business.
Until next time, cheers to your success.
Cheers to Your Success
