What Is a Network Marketer?
Network marketers act as independent distributors, joining established brands to stock and sell their products and earn profits and commissions on their sales. This structure means salespeople can set up a standalone business or take on a network marketing role to earn a secondary income.
While the market is well-established, many experts note that network marketing is profitable when each business owner has the framework and infrastructure to gradually expand and build a buoyant, engaged customer base.
Solutions like efficient tax management and Network Marketing accounting software are essentials, where network marketers have the tools they need to get and remain organized, keep track of their sales and profits, and be readily prepared for tax season without finding that their second income becomes an administrative headache.
Network Marketing Explained
The basics of network marketing are that people register as sellers, consultants, or brand advocates and work independently to purchase products, host demos, and parties, and recommend products and brands they love, often initially to friends and families, before expanding to wider client networks. We’ll focus on the Mary Kay brand as an example, as this business model is often cited as the most successful due to the reward schemes and recognition that help sellers scale.
As a snapshot, this is how it works:
- Beauty consultants purchase starter packs and then decide how to engage with clients, potentially through direct sales, social selling, parties, and events, or within their communities.
- Independent distributors receive incentives, including up to 50% profits on the products per sale and more generous rewards–such as the iconic pink Cadillacs, event invitations, and free travel.
- Each consultant buys products at a wholesale price and can sell them at a suggested RRP (suggested retail price). They earn additional income by recruiting new consultants who act as their ‘employees’–although also as independent salespeople.
The big contrast between other sales roles and working as a network marketer is independence. Marketers are solely responsible for securing sales and often provide in-person or virtual consultations to prospective buyers rather than working for an employer on a static salary.
What Does Network Marketing Involve?
Many successful network marketers note that the autonomy to decide their schedules, work around other commitments or responsibilities, and spend as much or as little time as they wish are the key attractions. However, network marketers often work incredibly hard to sell products, establish a loyal and repeat customer base, and recruit other consultants to work alongside and underneath them.
There are varied resources available to new sellers and those they recruit to whom they become the ‘upline,’ including starter kits with print, digital, and social media assets, a quarterly catalog, party equipment, and business cards. The original network marketer continues to earn a profit on the product they sell but also receives a marginal profit share from the products sold by the consultants they recruit.
Those who achieve the highest sales, recruit active teams of sellers, and support the brand can qualify for recognition and rewards, ranging from jewelry to exclusive event invitations, luxury travel, and gadgets.
What Does it Take to Become a Successful Network Marketer?
While flexible working hours and the ability to work from home are appealing, it takes consistency, communication, relationship building, solid product knowledge, and organization to make a viable income from network marketing. Putting in place the right systems to maintain accurate records of all inventories bought, sold, and stored, profits made on sales, and the activities of consultants working for you is key.
Some network marketers work alongside mentors to help them establish their businesses. In contrast, others rely on strong sales capabilities to build client networks, with excellent knowledge of the specifications and pros and cons of every product within their inventory at any one time.
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.
About the Author: Steve Nauta
