This is quite a popular concept that is being used by some top brands with successful results. It is a business model that depends on person-to-person sales by independent representatives. This model works well for part-time agents and for those who work from home.
The process is simple and effective. A person who is recruited as an agent will make an initial small investment to purchase the sample product. That person then has to sell the product and recruit new agents who will also sell the products and recruit a new batch of agents. The cycle continues as every agent will recruit more such agents.
Agents earn commission on every sale, and a percentage of the commission is credited to those who have recruited the agents. Companies such as Tupperware, Amway, Avon use network marketing to sell their products. For such companies keeping track of their agents, their network status, their referrals, and other details can be a bother without the right software. This is where MLM software steps into the picture.
Created for such companies, MLM software is a Multi Level Marketing or an Affliate marketing management tool. It helps enterprises in managing the network and the users in the network along with their compensation. The end-users or the agents can use the software to access their network information, payouts, etc.
Network marketing has many names such as multi level marketing, referral marketing, or pyramid marketing. The agents in the network are considered as independent business owners, rather than employees of the enterprise.
- The marketing system is hierarchical.
- Agents do not earn salaries. They only earn a commission for sales.
- The philosophy of this model is to sell the product.
- There is a single promotional strategy- word of the mouth.
- Active agents are eligible to get discounts and special offers that will encourage them to generate more sales.
- The agent is responsible only for his/ her sales.
There are many types of networks or levels in this marketing model. Different brands employ different models according to their needs. That said, the basic concept of the network remains the same for all models.
The first or top position belongs to the business or the manufacturer. Then come the distributors and dealers who take the products into the market through wholesalers. The wholesalers sell the products to distributors for a profit. The chain continues until the product reaches the end customer.
The hierarchy can take any form, depending on various factors. The MLM business software provides enterprises with numerous plans that will suit their business models. Enterprises can choose a plan accordingly. Some of the MLM plans are as follows.
- MLM Binary plan
- MLM Board plan
- MLM Generation plan
- MLM Matrix plan
- MLM Stair step plan
- MLM Donation plan
- MLM Gift plan
- MLM Unilevel plan
- MLM Australian Binary plan
There are many benefits to using the Network Marketing method as a major business model.
Enterprises do not have to spend millions of dollars on extensive advertising. The products are sold based on the word of the mouth advertising technique. The network includes many distributors and sub-distributors. There is no limit to the number of agents who can be a part of the hierarchy. Expanding the network is easy. The process is flexible and engages the clients directly.
Enterprises can customize the MLM software and integrate it with other software systems to ensure fast and effective results. The companies which provide the MLM software handle the customization process and provide 24*7 support to the enterprises.