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Sorooshsima Podcast #18

Network Marketing

 

You have probably heard the words pyramid companies among friends. Also, you may have heard about a new method of marketing called network marketing.

Most people think these two are the same and look at them the same. But have you ever thought about the difference between the two? Are they the same?

In network marketing, the manufacturing companies deliver their products directly to the customer without advertising or a middle man. After buying the product, Customers can market for these companies and make a profit. In this type of marketing, the sales process is done by the customers.

The sales channel in network marketing is based on human and social networks. With its pyramid structure, this method creates a network of human resources that is progressively added to the sub-categories.

The way to make money in network marketing is you make money for direct sales by each individual’s subsets.

Network marketing is a type of word of mouth marketing that is hot among young marketers today. Advertising in network marketing is done face to face and verbally.

For marketing in network marketing you can receive the desired product from the manufacturer and sell it to the people you know. To make money in this marketing, you can introduce other people to the marketing company that will get to know the product, which in this case is referred to as the subsidiary.

The more active your subsets are and sell more products, it is in your favor, actually a pre-determined percentage of the product sales is yours and you share the profits with the subsets.

When you have more active subsets, you succeed in network marketing, otherwise, you can’t make a lot of money alone.

The difference between network marketing and pyramid companies

In pyramid companies, members are committed to introduce people to the company and in return for the investments by the introduced people, the original members receive profits.

In pyramid companies, products are neither bought nor sold and the investment by the sub-divisions is divided as a commission among individuals at the top of the pyramid. In these companies, the closer you are to the top of the pyramid, the more profit you receive. In contrast, subordinates will not only not have any profit, they also lose.

In network marketing, the principal is selling products and by introducing new individuals and their marketing activities, profit can be made.

Pyramid companies are illegal in most countries, but since network marketing is so different from pyramid companies, they can operate in Iran with an official license from the Ministry of industry, mining and commerce.

Network companies have been able to start operating since 2012 under the formal authorization of the Ministry of industry and mining. About the same time, about 90 companies applied for license, to be more cautious, the government, the ministry of mining and industry, and the police announced very stringent rules for obtaining the license and only 13 companies could get their license.

Nowadays companies such as Badran, Panbe Riz and Biz MLM are among the most well-known marketing companies in Iran and anyone who want to start network marketing in Iran, could apply through these companies.

Now, how about identifying and licensing these companies?

By studying the color of the company symbol, one can find out whether these companies are legal or not.

The green symbol means the company is allowed to operate. The yellow symbol means the company is allowed to operate for a month to eliminate its problems. The red symbol means the company has been suspended for six months and the black symbol means the termination of the company’s license by the ministry of Mining and Industry.

The difference between Network Marketing and Classic Marketing

Nowadays, most people don’t pay much attention to advertising. Of ten products introduced in modern marketing, only one of them is profitable. People prefer to do their purchases based on the advice of friends and acquaintances who have used a product and are happy with it. In network marketing, without the use of advertising and with the participation of manpower consisting of the customers, the company’s products are sold and the customers can also earn money.

Preparation to enter network marketing

  1. Check and study the company’s operating history;
  2. Research about the company’s product and quality;
  3. Talk to the company’s executive about their plans and successes;
  4. Know the market constraints;
  5. Communicate with people in charge and make sure they get paid;
  6. Get help from legal advisers

High income in Network Marketing, Reality or Fantasy

To recruit new people as subsets, network marketing agents promise unrealistic and high incomes. By exemplifying the successful people, they try to attract new people.

Maybe you have heard the promises too;

  • Do you want to be independent?
  • Do you want to earn 20 million tomans a month?
  • Do you want to fulfill your dreams?
  • Come join me and start your job…

 

 

Don’t forget;

Only 10% of Amways retailers, one of the largest network marketing companies in the UK, have made high incomes, and 90% were able to earn a modest income in (society).

The advantages of Network Marketing

There are many advantages to network marketing that overlook the disadvantages

The many advantages that can be mentioned in the field of network marketing are the first step in employing and securing a profitable income for the youth. This type of marketing has high profits for the people working on it all over the world.

Reducing costs, more sales, supporting manufacturers are other network marketing advantages that can be taken into account to guarantee an increase in their sales.