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Network marketing: Popular business model for women

Everyone is experiencing one problem or another in the business world. However, obstacles for women are more pronounced. Women entrepreneurs in particular have more business woes as compared to men, yet various researches have led to the conclusion that gender inequality is costly for economic growth. Women still have barriers to access key resources such as land, education and capital. There is a need to ensure the increased participation of women in business and network marketing has proven to be one of the most currently recognised answers.

marketing insights with KAREN WHITNEY MATURURE

Why is the discussion on women participating in business important? Well, strong and enduring women entrepreneurs; including network marketers; are increasingly being recognised across the world for the success of their businesses and for their important contributions to their countries’ economic well-being. At the same time women’s economic empowerment is positively correlated with improved family welfare and nutrition, higher education levels for girls, and consequently improved economic growth.

What is network marketing?

Network marketing also known as multi-level marketing (MLM) is a system for selling goods or services through a network of distributors. However, some practitioners prefer the use of the more generic term — “direct selling” though network marketing is only one form of direct selling. It is especially popular in the context of an information society in which creating products and services, as well as adding value, are done through social networks globally, hence the evident role of technology and information systems. So people do not physically sell or market products but utilise the internet and social media for this.

Network marketing companies such as Tupperware, Avon and Green World are producers that market branded goods or services through networks of independent, member-owned distributorships, which are usually operated from members’ homes. To become a distributor or a representative of a network marketing company, the individual usually needs to purchase from the corporate-level producer one or a combination of the following: training, promotional materials, and a certain amount of inventory during a specific time period. Representatives then resell their inventories primarily to residential customers, often beginning with family and friends.

A distributor in a multi-level marketing company earns money both through the sales of the multi-level marketing products and through other distributors, by receiving a portion of the income these distributors generate. The distributors that you sign up with your multi-level marketing plan are called your downline. The distributor that originally recruited you is called your up line. Every member in the network has his own role and equitable recognition. A distributors picks up products worth a certain sum, say R1 000 at a time and sells them directly to the consumers. After they have sold their first consignment they are allowed to pick up their next lot and no distributor is expected to make all sales on their own.

One of the better known methods of direct sales is that of the home party. A home party involves the hostess inviting people from her personal network of friends, co-workers, and family members to come to her home for a special “spa treatment,” “fashion show,” or “make over” and so on (depending on the company). At the party the consultant will show the guests how to use their products in some form of hands-on demonstration with the idea that, after a simple demonstration, the guests will be compelled to purchase their goods.

Opportunities for women that come with network marketing
Many people have been brainwashed by the system to believe that “work” or a tangible career means waking up to go to an office yet network marketing has proved this to be a fallacy. Network marketing businesses such as Tupperware has meant that women can work from home and escape from domesticity while offering flexible employment. The modern woman can thus easily be a businesswoman and then morph into a mother or wife in the same space.

MLM also aids in redefining the woman and ridding society of negative stereotypes. Home party sales are an empowering outlet for women because they challenged prevalent gendered ideas of women’s abilities as discerning consumers and as sales people. Women could also use their consumer knowledge to save money for their families through purchasing domestic necessities offered by Tupperware for example.

The industry evidently has strong gender dynamics. According to WFDSA globally 75% of its representatives are women and 25% — men. And this is hardly by chance — network marketing is called “the Pink economy”. Not by accident, a big part of the representatives of the industry are mothers with children. The very nature of network marketing — striving for co-operation instead of competition, good relations through more communication with other people, sense of justice — is an inherent characteristic advantage of women.

MLM also comes with a wide range of products and consequently wider markets. From traditionally offering cosmetics, household cleaning products and kitchen utensils, at the present time network marketing representatives can be found selling a wide range of products and services, such as nutritional supplements, life insurance, and telephone services.

Women in this blooming industry can also empower other women. Without a doubt, numerous up line supervisors, are ready to “share their business” with the next woman who crosses their path. Women entrepreneurs are powerful role models, too, demonstrating that despite still being at a disadvantage compared to their male counterparts, business success is possible.

One does not need a degree or diploma to join the MLM business or a lot of capital. This low cost of entry coupled with high level of residual income, financial freedom, quality time with family and working from home are some of the attractive rewards that successful multi-level marketers are enjoying today.

The challenges

The use of network marketing representatives’ personal relationships to sell products and recruit new people in the network is a huge challenge. As network marketing companies encourage distributors to recruit family and friends as distributors and consumers. This part of the business can be offensive to most people as once they are approached to join a network marketing company by their relative or friend they feel that advantage is being taken of their relationship.

A the end of the day the end game in partaking a business venture is getting financial rewards yet while some women may be inclined to view direct sales as an attractive employment alternative it is not a realistic means of supporting families during difficult economic times. Thus more information might help some women make more informed decisions about joining or not joining a direct selling organisation.


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