Network Marketing: The Detailed Guide

  • By Neha Siddhwani
  • 7 August 2023
Network Marketing: The Detailed Guide

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In today’s time, when marketing is a trending topic, you should be able to learn about network marketing. Now what is network marketing, what are the types of network marketing, how network marketing work, and do you need to have an MBA course to get into network marketing? There are many questions that a candidate faces and therefore, we have curated this blog where you will get to learn about the importance of marketing. You can give an MBA entrance exam to get into marketing and build a career in it.

What is Network Marketing?

Network marketing is a type of business that relies on independent salespeople selling to other people one-on-one while frequently working from home. You might need to create a network of company partners or salespeople for a network marketing business to help with lead generation and closing deals. Many trustworthy network marketing businesses exist; however, some have been exposed as pyramid schemes. The latter may place more of an emphasis on recruiting salespeople who may be expected to pay upfront for pricey beginning kits rather than on making sales to consumers.

How Network Marketing Works?

Multilevel marketing (MLM), cellular marketing, affiliate marketing, consumer-direct marketing, referral marketing, or home-based business franchising are some of the several names for network marketing. Businesses that use the network marketing model frequently organize salespeople into tiers, i.e., they are urged to build their networks of salespeople. A new tier's "upline" (creators) earns a commission on both their sales and those of the "downline" (those in the tier they created). Over time, a new tier may give rise to yet another tier, increasing both the middle tier's and the top tier's commission. As a result, both product sales and recruitment affect salespeople's wages. People who entered first and are in the top tier profit the most.

Advantages of Network Marketing

The following are the main benefits of network marketing:

  • A network marketing organization can be any size. This happens as a result of corporations sometimes forming extensive distribution arrangements. To increase business sales, distributors can work with other sub-distributors.
  • Companies have a strong distribution network that interacts with clients directly, so they do not need to rely on advertising to market their products.
  • Retailer profit margins are viewed as an expense by businesses and are impacted by distributor structure. Distributors receive these profit margins, which relieves firms of their financial load.
  • Businesses no longer need to spend as much money on storage and shipping as they once did, which is another benefit. This is so because distributors are in charge of paying these expenses.
  • This architecture allows distributors to profit indefinitely from their business dealings with the organization. Both their profits and commissions can benefit them.

Disadvantages of Network Marketing

Here are some of the key disadvantages of network marketing:

  • As a small fraction of distributors often make a considerable income, many people who join MLMs struggle to make a good living.
  • The recruitment of new team members is one of the key objectives of network marketing. This, however, can lead to high-pressure conditions where people believe they must continuously hire new employees too to grow in the organisation.
  • Due to unethical business and distributor practices, network marketing has acquired a bad name in some circles. You may have little control over the goods, prices, and other facets of the business as a distributor in a network marketing firm.
  • The legality of some network marketing businesses' business practices, including pyramid schemes, has been contested. 

Types of Network Marketing

Let's look at the many sorts of network marketing now that you understand what it is and how it operates. Network marketing comes in three different flavours.


To use single-tier network marketing to offer a company's goods or services, you sign up for an affiliate program. Direct sales are your only source of income, and you are not forced to find more distributors. Avon, a renowned manufacturer of cosmetics, employs one-tier networking marketing. Some internet affiliate programs offer you money in exchange for sending customers to the affiliate's website. One-tier networking also includes pay-per-click (PPC) and pay-per-lead (PPL) affiliate programs.

Two Tier

While two-tier network marketing needs some recruiting, unlike single-tier network marketing, your remuneration is not wholly reliant on it. Both direct sales (or traffic pushed to a website) and direct sales (or traffic advised by affiliates or distributors you hire) are credited to your account.


Some direct sales organizations employ multi-level marketing (MLM) to entice current distributors to find new distributors in exchange for a cut of their recruits' sales. Recruits make form the "downline" of the distributor. Direct product sales to clients are advantageous for distributors as well.

Amway, a well-known multilevel marketing company that offers health, beauty, and home care items, is a well-known direct sales company.

Application of Network Marketing

It is not sufficient to only comprehend what network marketing is. The real comprehension comes from being aware of how it may be used in a profitable way to further a business's expansion in the real world. As a result, a multi-level marketing structure with several distributors is established. The network structure expands beyond any other type of networking and may accommodate a huge number of individuals without any restrictions or size restrictions. 

Companies make adequate returns while making small investments in network development. Additionally, the production of it has a good impact on distributors, and it generates large earnings. Since it is a dependable system, there is no risk of failure, and a clear line of communication is established between the business and the intended market.

About Sunstone

You can pursue an MBA degree in Marketing or Digital Marketing to learn more about network marketing. Well, to pursue this MBA course, you can apply via Sunstone, a higher education service provider. With Sunstone by your side, you can unlock numerous benefits that will help you shape your future. Some of the benefits are mentioned below.

  • 70+ training and development sessions from top recruiters and industry experts
  • You get to learn from former IIM and IIT graduates
  • 50+ guaranteed job interviews with Placement Protection Plan
  • 0-cost EMI according to your course duration
  • 70% more job opportunities in metropolitan cities
  • A capstone project to work on every semester
  • Helps in building a professional portfolio that improves your chances of getting hired

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