Wednesday, December 30, 2020

Multi-level marketing

Relationship marketing is defined as building, developing and maintaining strong relationships with customers and other stakeholders in order to obtain a high profitability.

Multi-level marketing can be observed that its techniques are proper for establishing strong relationships inside the distribution channels of a named company.

Multi-Level Marketing is a very popular business model in the Western countries. It is a kind of hybrid of the method of distribution of goods and the method of building a sales network. Multi-level marketing (also called network marketing) is a form of direct sales in which independent distributors sell products, usually in their customers' home or by telephone. It is one of the safest (carries a very low risk) ways of conducting a business activity.

In literature on the subject Multi-Level Marketing is also called network marketing. The parent company promotes its products directly to consumers by means of relationship referrals and direct selling. The distributors undertake both selling and promotional activities, so that the company very much cuts its costs dedicated to promotional activities.

These distributors recruit independent distributors of their own. They earn commission on their own sales revenue and on the sales revenue of their downline recruits, who are below them in the structure.

Independent distributors develop an active customer base, which buys the company’s products, in order to earn a commission or the difference between the wholesale and retail price.

Independent salespeople of multi-level marketing, referred to as distributors or associates, independent business owners, dealers or etc., represent the company that produces the products or provides the services they sell. They are awarded a commission based upon the volume of product sold through their own sales efforts as well as that of their downline organization.

Multi-Level Marketing involves distributing goods and services through a network created based on contacts and ties between people and the participation of all members of the network in this activity accurately define the way independent distributors function.
Multi-level marketing


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