How Profitable Is Network Marketing?

How Profitable Is Network Marketing?

Network marketing can be very profitable, with the most successful consultants and representatives able to generate a stable enough income to replace a conventional job and support their families while working flexibly and from any location.

However, a network marketer is responsible for their own business, revenues, inventory management, and sales. Hence, this form of independent selling may not be suited to everyone and requires detailed planning, reporting, and accurate inventory management tools.

Today, we’ll look at some guidance to help establish a profitable network marketing career, with insights into why a system like a network marketing accounting software specifically designed for marketers in each niche or group is a key ingredient to success.

One of the biggest things that sets successful network marketers apart from those that don’t succeed are systems, consistently putting in the time, and knowing your numbers (finances).

How Much Do Network Marketers Make?

There is a big gap between the highest and lowest earners, and average network marketing earnings depending on countless factors, such as location, selling skills, the brands or products the marketer represents, and the time they invest into social selling and growing a strong customer network.

As a quick introduction, most network marketers earn a commission. They purchase products at wholesale rates and can set their own retail price, although many stick with the suggested RRP.

Network marketers can earn up to 40% or 50% on every sale through networks like Mary Kay. While this could differ with other brands, consultants can also receive awards, complimentary trips, and commissions based on the sales of network marketers they recruit.

The latest data shows that network marketers in the US earn an average of $62,608 a year. Around 50% of marketers grow viable businesses, and most earn a profit within the first three months.

It is crucial to implement the right network marketing financial management tools from day one, and experienced marketers recognize the importance of superb organization, time management, and record-keeping.

What Systems Should New Network Marketers Consider?

Much may depend on your experience and whether you’ve already worked as a network marketer before, but we’ve summarized below some of the structures and resources many marketers rely on:

• Inventory management: It is important to know precisely what stock you have available, which products you are running short of, when pre-orders or inbound stock are due to arrive, and which lines are less popular. Many network marketers prefer our semi-automated option that can cross-check orders against inventory regularly.
• Product specification catalogs: Network marketers are the face of their businesses, and as such, they need to be able to answer any questions a new or existing customer might have with professionalism and clarity. Having this information on demand is highly advisable, especially when making recommendations and backing that up with ingredients or case studies.
• Accounting software: Tracking sales made, profits earned on each transaction, the value of inventory purchased and held, and the net income subject to tax is essential to ensure compliance and eliminate stress when tax season arrives!

You might already have bookkeeping and administrative resources, or you could opt for Direct Sidekick, as a comprehensive solution that includes a full inventory management and accounting software suite.

What Professional Skills Are Important for Network Marketers?

A good understanding of social media networking and marketing tools is ideal, where network marketers can publicize the products they sell, connect with prospective new customers or sellers, and be able to capture and follow up leads. You’ll also need strong selling abilities. Even if you’re not comfortable selling, remember you will improve as you spend more time doing it and if you come first from a place of helping and serving your customers.

Finally, any aspiring network marketer should ensure the company or brand they represent is one they truly like. Passion and enthusiasm for products and first-hand experience of how well they work can be invaluable in finessing your sales technique and showcasing why your customers will love them, too!

FYI: Direct Sidekick is accounting software built for direct sellers, network marketers, crafters, vendors, VRBO owners, and many other home-based business owners. Create an account and start tracking your income, expenses, and inventory.