Global Network Marketing and its Growth
The sudden and steady growth of global network marketing took place after the Federal Trade Commission recognized that network marketing was a legitimate sales and distribution model.
This took place from the late 1970’s onwards and the increase in MLM popularity can still be widely seen around us today.
Globally, Who is Involved in Network Marketing?
The growth of global network marketing has spread to all corners of the earth. Today there are thousands network marketing companies operating all throughout Europe, the United States, Mexico, Canada, South America, Australia, New Zealand, the United Kingdom, Japan and Asia Pacific region.
network marketing is a $100 billion industry, and it is very easy to see why, especially after the tremendous growth of global network marketing companies in the last 20 years.
In 1993, Amway was the fastest growing foreign company in Japan, producing sales of well over $1 billion. Because of the huge success behind the network marketing model, many various companies ranging from toy distributors to cosmetic manufacturers have adapted the same distribution methods.
Colgate-Palmolive and Gillette both have network marketing subsidiaries. Nu Skin outperformed the cosmetic giant Maybelline, Mary Kay has grown far ahead of Johnson & Johnson and Amway is larger than Revlon.
This is all because these rising companies utilized the network marketing method of sales which has kept them at the top still to this day.
Some companies realized that using traditional direct sales methods was no longer effective. A well known example of a huge company that used direct sales was Avon. This company has been around since the late 1800’s, but now the growth of global network marketing has evolved it into a MLM giant, currently producing a revenue of over $10 billion worth of sales annually.
Why Did Direct Sales Lose its Flare?
Direct sales slowed right down in the 1970’s, which was the era when targeted consumers of direct sales began to enter the work force.
This lead to fewer women being at home during the day, causing the main customer base of many companies to dry up.
This change in consumer market behavior put pressure on companies to review their sales and marketing strategies which brought them to employ network marketing techniques in order to gain a good footing again in the marketplace.
The resulting growth of global network marketing helped create many separate niche industries which include vitamins, nutritional products, jewelry, cosmetics, home care products and much more.
The increasing popularity of MLM over the last two decades is because it is far more efficient as opposed to the old traditional sales methods. It is only going to get more and more popular as additional companies realize this.
It is common for a company to spend millions of dollars a year in advertising. With MLM, there is no need to market products to the extent that regular companies do. The overall effect of this leads to lower product prices and makes these products far more competitive in the economy.
There are also less costs entailed with the distribution and handling of products as opposed to having them sold from local retail stores and supermarkets. Other areas where costs are slashed is the fact that you don’t need a sales team, as many support staff and inclusion travel costs.
It has been known that at least 70% of the shelf price of a product which have gone through the traditional sales and distribution process is from the result of marketing expenses.
Think about how much you could save, as a consumer if you didn’t have to pay for this marketing! Or perhaps how much commission you could make if you were paid the funds allocated for marketing!
Now, network marketing companies instead pay commissions to their sales representatives with the money that would usually be used to fund marketing methods, whilst still providing a high quality product at a very competitive price.
The outcome of companies incorporating network marketing methods has allowed them to accelerate well ahead of their competition, which is why there has and there will continue to be a consistent, strong growth of global network marketing in our economy.
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