A mega-trend and a business model have collided. One of the fastest growing segments of the market today is health and wellness including natural products, functional foods, and nutritional supplements. It has become a mega-trend and a visible social development across the globe.
Network marketing is the enticing business model. In network marketing the products are sold by a representative directly to consumers rather than through a retail store. In this model, the customer is more targeted and the representative is more informed about the product(s) being sold. Network marketing provides the representatives a home based supplemental income, a chance to run their own business, and improved morale. The unique compensation structure that the majority of network marketing companies have is the primary driver of this business model. Representatives, or associates as they are sometimes called, are also compensated based on the revenues generated by the representatives whom they recruit into the business. These recruits are referred to as a downline; and as the downline expands, so do commissions. Representatives can earn income not only by selling products retail at a markup but also on the group volume generated by their downlines. Commissions can run as low as 35% and as high as 44%.
The health and wellness industry and the network marketing model are both strong standing alone but are even more powerful when the two are combined. There is a lack of information about nutritional supplements as one can see in retail settings with shelves crowded with multiple varieties and brands of similar products. Poorly trained and therefore unknowledgeable salespeople cannot facilitate the shopping experience. In network marketing, the representatives or associates are consumers themselves and know the products well. The best advocate for any nutritional product is the user him/herself. When a person’s life is changed as a result of product use, a strong loyalty is created to the product and to the business opportunity.