Is The Product Bought Through Network Marketing Costly?

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www.taiwan-control.com.twMany people think that products sold through Network Marketing are costly because company has to pay incentive to its distributors. This is a wrong perception because even when you buy a product through traditional marketing, the cost may be much higher. The reason may be following:


Commission paid to each individual involved in establishment of distribution network (For ex: Distributors, Stockiest, Dealers, Retailer etc.)
Company has to invest a lot (around 25%) on advertisement of the product through newspapers, Television, Brochures, Promotions, & various other media.
Cost incurred due to establishment of infrastructure required for selling of the product (For Ex: Shop, Showroom etc.)
Company has to recruit various marketing professionals (For Ex: Marketing managers, Regional Managers, Sales Person Etc.)
However in case of Network Marketing, Normally Network Marketing Companies directly ties up with manufacturing companies. Then Network Marketing Company sells the product directly through its distributors. The strategy is to distribute the products through local channels thereby saving on distribution cost and at the same time providing some alternative income for those people who would like to be an independent distributor of the company. Distributors do the marketing and find prospect consumers for the network marketing companies. In return, they get incentives from network marketing companies. Network marketing companies use a shorter, more direct distribution chain and avoid expensive retail outlets. This allows direct sales and Network Marketing Companies to offer superior products at cheaper prices, while providing good incentives to its distributors.

The fact is that direct sales and Network Marketing Companies use their customer's homes as the place of business, instead of retails outlets & shops. This resulted in quality products at lower prices. However, other industries have a lot at stake to keep it secret from public. The wrong perception about the direct sales & Network Marketing industry will correct in time to come.