MANAGEMENT AND NETWORK MARKETING

Abstract

Network marketing and its management is a form of business that has existed for seventy years and is
spread in more than a hundred countries. This way of doing business is based on direct sales, but with numerous
benefits. Unlike the pyramid scheme with which network marketing is often associated, the emphasis is on selling
products rather than paying membership fees. Network marketing is based on building a network. The goal of the
business is to create a stable and successful team that will continuously find new customers and partners who will
expand the network with them. To create a successful network, it is necessary to choose a quality company with
quality mentors who will always be useful to the distributor. One of the most important things in this business is to
create and maintain a successful image. There are many Network companies in the world, but in our society there is
still a lot of prejudice and ignorance related to this form of business.
Network marketing and its management is a form of business activity in which the representative of a certain
company (distributor) receives a commission for each product sold, but also for each sale made by the distributor
whom he registered in the “network”. In other words, the distributor earns money by recommending it to the other
product(s) it uses.
Although it is a completely legal and normal job (more than 70 years), despite the fact that over 50 million people
are involved in network marketing and it is also fastest growing form of business, especially now that the global
pandemic with Covid 19 people are forced to cut back on contacts and the famous “shopping” initially there is an
impression that network marketing is a “scam”, “Pyramids” etc. Internet forums are full of negative comments about
network marketing and there are even some blogs and articles that aim to “save” people from scams called network
marketing or multi-level marketing (MLM). The question is why is that so?
The reason for this is the fact that most people do not know exactly what network marketing is, and many who enter
this business do not know how to do business. The purpose of this paper is to define network marketing to
distinguish it from the pyramid systems whit which it is so often compared, and to point out its value as a business
model. In addition, the aim of the paper is to show what is needed to build a successful and stable network.