Understanding Network Marketing Companies With João Magalhães

João Magalhães, Level 7 at Lyconet, myWorld Solutions AG. Photo by João Magalhães.

Lisbon (ViaNews) – In today’s fast-pacing business world, network marketing remains a reliable option for companies end entrepreneurs to market their products and services. In 2017, according to the WFDSA (World Federation of Direct Selling Associations), there were more than 116 million people involved in network marketing worldwide. This number denotes an increase of roughly 26% when compared to the 2014 data.

Network marketing is a method of building a business by marketing through one’s network of contacts and acquaintances, using word-of-mouth.

João Magalhães holds the title of Vice-President at myWorld Solutions AG because he has reached Lyconet level seven, in a total of eight levels. This successful network marketer explained to Via News what network marketing companies do. “How many times do we recommend a restaurant, a mobile phone, or a travel destination to a friend? Virtually every day, right? That type of marketing is probably much more effective than an advertisement on television or YouTube. This means that every day, through word-of-mouth marketing, we’re generating sales for certain companies. So why not receive a commission on that? That’s what network marketing companies do.”

João Magalhães, level 7 at Lioness International AG. Photo by João Magalhães.
João Magalhães, Level 7 at Lyconet, myWorld Solutions AG. Photo by João Magalhães.

About network marketing

Network marketing is also called direct selling because the sale is done directly from the manufacturer to the end consumer, cutting out the middle-men. It can also be called multi-level marketing because there are multi-level commissions being paid.

The aim of a network marketer is selling but also team building. When a network marketer builds a team of other network marketers selling products, he/she receives a commission which becomes passive income for the team builder. Network marketing is more than a sales job. It not only implies selling but also building a network of people promoting a product or service. This is why leadership is a key factor.

From a company’s perspective, instead of spending money on traditional advertising and marketing campaigns, network marketing companies decide to pay teams of independent representatives to sell on a word-of-mouth basis.

According to Nielsen’s Latest Global Trust in Advertising Survey, 92% of consumers trust recommendations from friends and family over all forms of advertising.

According to Dr. O. C. Ferrell, Professor of marketing at the University of New Mexico, “network marketing can educate consumers probably better than any form of marketing. They certainly can do better than advertising because advertising usually has a certain hype to it and you can only get limited information. So network marketing trumps advertising”.

Network Marketing professionals tend to be responsible for sales but also customer support and post-sale support. This relieves companies from overhead costs.

According to the 2017 WFDSA study, network marketing industry accounts for more than $189 billion in revenue worldwide. In the documentary, The Rise of the Entrepreneur, it’s estimated that 40% of that revenue is paid in commissions to the network marketing professionals. That’s more than an expected $200 million daily paid in commissions to network marketers.

Robert Kiyosaki, in his book The Business of the 21st Century, quotes the Fortune journal: “Today, network marketing is recognized by many experts and accomplished businesspeople as one of the fastest-growing business models in the world.”

Network marketing advantages

Initial and overhead costs tend to be very low compared to other entrepreneurial-like ventures such as traditional business ownership or franchise ownership. King C. W. and Robinson J. W. stated in their book, The New Professionals, that “no other business requires such a low cost of entry with virtually no significant overhead”. Hence, there’s no need for people to incur in debt to start a business.

A Network marketer works at his/her own pace. Smarter strategies and faster paces are prone to bring better results.

Network marketing disadvantages

On the downside, network marketing could take some time to produce some sort of return. According to Annetta Powell, an American entrepreneur, working at a network marketing company means that “your income won’t only be related to the products you sell, but also to the people you recruit.”

Future outlook on network marketing

In today’s business world, more jobs are being replaced by automation. BBC News quotes McKinsey Global Institute in that “up to 800 million global workers will lose their jobs by 2030 and be replaced by robotic automation”.

One can only guess how the future of work will look like. For now, the network marketing industry continues to grow, in the future, it could very well be an alternative to unemployment.

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