According to statistics published by the Direct Selling Association (DSA) in the year 2000, additional income was the main reason for Americans choosing this line of home based business. Worldwide statistics of the DSA show that the number of people who have opted for this line of business has increased from 58 million in 2006 to 62 million in 2007, underlining the importance of network marketing as an effective income source.
Network marketing and direct sales assumed great significance during the recent recession when lay-offs became the order of the day. One should keep in mind that profits from network marketing do not start pouring in from day one. However, network marketing is a high paying business option provided a good compensation scheme has been selected.
Home businesses are the ideal solution for corporates that have closed down their marketing sectors. The companies need to sell their products or face a loss. Since there is no better sales network that they can turn to for a job that cannot be outsourced – online enterprises will have plenty of business to look forward to.
The uniqueness of multi-level marketing which is a form of network marketing is that an affiliate spends the time and effort to train and motivate those he introduces down the chain. This results in creating leaders, entrepreneurs and a skilled sales force in the unorganized sector. The multi-level marketing structure also helps an online business to introduce its products to customers and locations that it may not have been able to reach out to on its own.
The affiliates of multi-level marketing programs are on the frontline and feel the pulse of the customer. They are extremely well placed to provide inputs about customer likes, dislikes and usage patterns which are beneficial for market research and constant innovation.
Theoretically, when an online business opts for a multi-level marketing model of business, it can shift its focus from selling and stocking to improving product quality.
Information technology has indirectly benefited from this form of marketing with more people opting to use network marketing to generate leads online. The Networking marketing industry has created a demand for web designers, developers, content providers, SEO experts, telemarketing service providers and web hosting companies. In the process, networking marketing improves the technical skills of the pursuers of this line of business, making them more IT savvy.