How to set up a Network Marketing Strategy ?
Ambassadors, influencers, independent consultants… The network marketing actors are varied but above all, very numerous. And this is the goal ! Entrusting the promotion and sale of certain products to a network of salespeople, often amateurs, can nevertheless be lucrative for a company. So how to build a network marketing strategy ? We explain how it works, why to start and we will also talk about Qnet;
How network marketing works ?
The network marketing is a specific sales system, in all commercial areas (food, clothing, jewelry, etc.).): resellers (ambassadors, advisors, VDI, VRP) offer and sell a company’s products to their own network (relatives, acquaintances, subscribers). They in turn can recruit and sponsor new independent resellers to further expand this distribution network, in exchange for a commission among other things.
This is what we call MLM (Multi Level Marketing), the multi-level selling (beware of scams linked to pyramid schemes: sellers are only paid by the commissions or bonuses they receive when they are sponsored, for example). To be effective, this type of selling can rely on natural virality of the system:
- excellence of the products offered and reputation of the company;
- very good quality-price ratio ;
- ease and speed of sharing and dissemination by associating social networks with an email marketing campaignemail marketing for example. A company can quickly become known and increase its sales thanks to good ambassadors;
- The appeal of rewards (salespeople) or offers (customers).
The influencers can also boost product sales thanks to their reputation and their community (influence marketing): consumers and internet users will be more inclined to buy a product praised and recommended by the community.
Why get into MLM ?
The Multi Level Marketing has been democratized in recent years. With the advent of digital tools and social media, ambassadors and resellers now have an easier time spreading and selling their products (or services) to the largest number of people. Think about a strategy social media is therefore a decisive element in the achievement of its commercial objectives.
The independent representatives (ambassadors, consultants, VDIs, micro-entrepreneurs) are turning to MLM for some advantages :
- possibility to work from home (be careful, however, it may be necessary to store more or less important quantities of products);
- commission for each sale;
- sponsorship (more referrals means better pay);
- training, integration or personal development programs.
As for companies, they also draw from benefits of getting into MLM :
- low investment and moderate risk-taking with controlled communication, a positive reputation and the recruitment of the first efficient and invested ambassadors;
- cost reduction: promotion and sale of products by the members of the network. The investment related to advertising is therefore greatly reduced;
- saving time and productivity: internal company staff not involved in the sales process;
- Very interesting return on investment with a multi-level sales system well established from the start (selection of products, natural virality, communication worked, best practices in email marketing respect, choice of ambassadors).
How does Qnet rank in the MLM ?
Qnet is an MLM company one of the best-known companies in the world that boasts 23 years of existence and experience. It is also part of the global direct selling federation.
Specializing in the luxury goods industry (cosmetics and jewelry), Qnet markets 7 different categories of products (as opposed to 2 or 3 in general) including education, home care and travel. Born in Malaysia and then bought by the Americans, Qnet has now set up its headquarters in Hong Kong. However, European countries, including France, have banned the sale of its products on their territory following the numerous accusations of scams (especially towards sellers) that weigh on it.
With over 10 billion in sales and more than 7 million salespeople, the company has risen to the top of the list 53rd place (out of 500) of the MLM world ranking in 2020, (+5% compared to 2019). Official distributor of the Olympic Games in 2000, then in 2004, and official sponsor of the Brazilian soccer team in 2006, Qnet has also created an association to help the victims of the 2004 tsunami in Asia and participates actively and regularly in charitable operations and programs (jobs, education, health, etc.).)..
This distribution method relies on thesize of sales networks, even amateurs, to distribute and sell products or services. Companies can define their marketing strategy by integrating network marketing into their action plan, to reduce certain costs for example.