How Network Marketing Works? History and Methods

We are at a time when trade models have gained importance. While some models face forgetting, some models are able to continue. Although there are years, there are trade systems that are obsolete and whose importance is understood in every period. Although the network marketing system dates back to the 1900s, it is one of the systems that did not lose its popular side in 2020.

This system, which took over a century, makes many companies successful. The system has been described as the best trading model in recent years for some business owners and companies. So what makes the system so successful? Does the system work flawlessly? First of all, what is network marketing ? Let’s continue by answering the question.

What Does Network Marketing Mean?

Network marketing consists of an English word. It is generally used with this name worldwide. When we look at the American equivalent, we  can see that it is used as ” Network marketing”  or ” Direct selling” . We can define the definition of network marketing as follows; instead of companies selling, it is the event of individuals selling directly. This is the main reason why it is called direct selling. It is the technique of people marketing in their own way . It can also be considered as the system by which the individual pays for his labor.

The commercial model can be seen as a network chain of network marketing . It is also said that taking people into the system transforms the model into a chain of happiness. However, what really emphasizes network marketing is that it provides equal opportunities for everyone. Each individual in the system has equal rights with another person. No need for any experience or knowledge shows that everyone is equal. In addition, people can determine their working hours themselves.

The model is also defined as MLM network marketing. The expansion of MLM is Multi Level Marketing . In American, it means multi-level marketing . The multi-storey name is also frequently used in the network marketing system. MLM network marketing, on the other hand, takes place in the system as follows:

The representative in the system registers a new member with his effort. The representative trains the newly registered person and teaches the system. Then the representative supports this person. And as the new person who enters the system wins, the representative wins.

History of Network Marketing

The network marketing system first appeared in the 1900s. The first year in which the network marketing model was used successfully was 1934. It was used successfully by Carl Rehnborg, who we can also show as the inventor of Network Marketing. Rehnborg decided on the network marketing system in 1934 after trying more than one method. Many have also been confirmed as the first to use the Carl Rehnborg model.

Carl Rehnborg later expanded the business, making the model a company. In 1934, he crowned his success with the California Vitamin Company, which he opened. He immediately followed the steps of Nutrilite Products in 1945. With the Nutrilite Products company, the network marketing system has gained more importance. The steps taken by the company have been positively reflected to the present day. Many companies have been influenced by Nutrilite Products and developed new network marketing models.

The network marketing model came to our country after the 1990s. Amway Corporation, also separated from Nutrilite, started its operations in our country. Rich DeVos and Jay Van Andel, who are the Nutrilite Distributors, established Amway Corporation. This company has been seriously effective in our country. The company has started the network marketing industry in our country. Thus, to meet with USA’s network marketing took place in 1994.

The network marketing system, which entered our country in 1994, did not show much effect until 2000. However, after 2000, a rapid breakthrough took place, network marketing showed itself in every sector. Both domestic and foreign companies continued their activities in our country. The second wave after 2000 occurred in 2010. Network marketing model in 2010 after he was held in the USA. Ultimately, the model was launched as a direct sale. And people also recognized it by this name.

Network Marketing Working Method?

The working principle of the model depends on a fairly simple system. In the model where direct sales are made, everything is based on advice. The customer helps the sale by recommending the product. Although the system has an ancient history, it still continues today. In fact, the important thing for companies is the sales. Which model and system used is somewhat secondary. Business owners often look at the result. 

The traditional sales model has the adventure starting from the cost of a product. That is, the manufacturer removes the product from the factory. The goods from the factory reach the wholesaler’s hands. The wholesaler resells the product to the retailer. The retailer also puts a price on the product and delivers it to us in that way. Tired of telling people, right? There is also a material dimension to this. Suppose the product produced is 50 lira. After going through all these stages, the arrival to us will be between 180 and 200 liras.

Network marketing methods are based on simpler systems. There is no intermediary in between. The person who sells the product and the person to buy it. Shopping takes place between two people. In this way, the product will not be sold too expensively. The system, where the direct sales logic works well, is based on advice and satisfaction.

3 Important Elements of Network Marketing

  1. The product to be sold in the network marketing model should not be shown. The return of the product, which is sold as a misleading customer, will be negative.
  2. The product should be sold directly to the customer. The inclusion of second persons on the sale makes the event even more complicated.
  3. Most importantly, it should not be forgotten that direct sales will be made. Direct sales reach the consumer more quickly. In this way, both fast sales and cheap costs occur.

Famous Network Marketing Lyrics

  • Just do once what others claim you can’t do! You will not even have to take into account what they say again. 
  • There is no entrepreneurship where there is no hope!
  • If you learn to do network marketing, you will be successful. If you teach you learn, you will be rich. If you teach, you will have wealth.
  • Network marketing refers to conscious consumption, not sales. Focusing on sales cannot provide permanent income.
  • Everything has already been done … Yes everything has already been done. All you have to do is just put them together.
  • There are many excuses for those who want to succeed and those who do not want opportunities. You either have an excuse or money. The two never happen together. You don’t have to be perfect, but you have to start to be perfect in this business. Those who stop trying and start doing are the successful ones. 
  • You will be successful if you learn to network marketing. Those who fail network marketing are those who give up early, or those who never start that business.

What is network marketing?

Network marketing is the event of individuals selling directly instead of companies selling. It is the technique of people marketing in their own way. American equivalent is network marketing.

When did network marketing first appear?

Network marketing was first used successfully in 1934. An entrepreneur named Carl Rehnborg used network marketing. Rehnborg, who was successful at that time, later opened a company related to network marketing.

What is the most meaningful word about network marketing?

There are many motivating words on network marketing. All of these words have a certain importance in themselves. However, in my view, “There is no entrepreneurship where there is no hope” was said exactly on the spot.

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