What are the main concepts of multilevel marketing or multilevel crowdinvesting?

Business News | 1 Jun |

Multilevel Marketing (another mostly similar term is Network Marketing) is a type of commercial model for the distribution of goods or services in the local or global marketplace, which has its unique advantages over traditional marketing strategies.

The main and well-known feature of Multilevel Marketing is the existence of a network of entrepreneurial participants who are involved in the sales/supplying of goods or services to the final consumer. Thanks to such a network, it is possible to achieve the fastest dissemination of information about a product or service in a market niche.

For almost any company, the Network Marketing concept provides an opportunity to quickly increase sales, gain access to a wide audience of potential customers and increase the level of demand.

In addition, the so-called multi-layered business concept model enables ordinary people to get involved in entrepreneurial activities as well. People who do not have a lot of start-up capital can take part in business projects based on the principles of Multilevel Marketing. In theory, even with minimum investment, entrepreneurial clients can make a profit and climb the corporate ladder by distributing the company’s goods or services.

Introduction Of Modern Technologies

Modern online technologies help with this even more. The largest Multilevel Marketing networks include hundreds, thousands, tens of thousands of active clients. At the same time, top entrepreneurs manage to attract this many clients to the network within a relatively short period – in 2-5 years.

In theory, modern social networks and computer technologies make it possible to create networks with even more active participants. Considering the audience of such services like Facebook, Twitter, Instagram, and an experienced and proactive entrepreneur can build a network of potential customers/consumers which could include millions of people.

Of course, it is impossible to succeed in business without proper training and knowledge. Multilevel Marketing is no exception. Therefore, entrepreneurs, especially beginners, who want to try their hand at this business model, should take training courses, investing primarily in their education.

Investment In Network Expansion

Another distinguishing feature of Multilevel or Network Marketing is investing part of the profits received from the sale of goods or services in expanding the network of entrepreneurs-clients. Depending on the market niche and turnover, investments in network expansion can amount to 15 to 50% of the profit received.

By the way, Affiliate Marketing also uses a similar concept. Some companies are willing to share a small part of their profits with their customers in exchange for attracting a new audience.

Spread Of Information

As stated above, Multilevel or Network Marketing is not only distinguished by the concept of profit-sharing with those who attract new customers.

Thanks to Multilevel or Network Marketing, a company or manufacturer manages to quickly spread information about their products, services, and promotions. This turns out to be much more profitable than disseminating information in the market using traditional methods, including online or offline advertising campaigns.

Therefore, in times of crisis or market difficulties, many companies that previously used the traditional marketing model are switching to Multilevel Marketing.

This is especially interesting for those companies that do not work in a specific country, but in several countries at once or around the world. Networked technologies enable them to quickly and efficiently disseminate information about goods and services to every corner of the globe. And the use of the Internet makes this spread even more effective.

What Sectors Use Network Marketing?

We should mention not only the advantages of the network concept but also its prospects for many market segments. For example, investment companies are interested in similar methods of attracting an audience. 

It is fair to say that many “traditional” financial companies have not been able to practically integrate new network techniques into their business.

But in the Cryptocurrency sector and Blockchain sector, Multilevel or Network Marketing has attracted the attention of new and well-known companies. In these innovative segments of the financial market, special attention was paid to Crowdfunding and Crowdinvesting. Crowdfunding and Crowdinvesting can also be attributed to Network Marketing.

Additionally, due to the introduction of Multilevel Marketing concepts to attract customers and entrepreneurs, the cryptocurrency segment has experienced quite explosive growth over the last decade, which resulted in the growing turnover of the cryptocurrency market that today amounts to billions of dollars.

Perspectives On Network Concepts

It is possible that in the next 10 years, Multilevel Crowd Investing will be in even greater demand among entrepreneurs and business professionals than before.

Moreover, the concept of attracting an audience, disseminating information, attracting investment is likely to be used not only by new projects but also by companies that are experiencing financial difficulties due to the crisis. The financial and investment sector is no exception. Many companies in this area are already actively using Multilevel Crowd Investing techniques to occupy a competitive niche in their market.

At the same time, Multilevel Crowd Investing may be interesting to consumers who are looking for a source of additional income and want to try their hand at entrepreneurship. In Multilevel Crowd Investing, they are attracted not only by the opportunity to create their network of clients, distribute promising products, make investments in something that will generate income, but also by the theoretical opportunity to become co-owners of projects.

In the future, the active development of Multilevel Crowd Investing will more likely attract millions of people to entrepreneurship. They will receive income to their family budgets, as well as pay taxes on profits to state budgets, stimulating the economy not only of their country but of the whole world.

In theory, Crowd Investing, which will be available to a wide audience of consumer entrepreneurs, could partially solve global economic problems in many countries.

A Negative Experience In Network Marketing

It should be noted that Multilevel or Network Marketing does not have a very clean reputation. The reason is the work of unscrupulous companies that use similar technologies to distribute low-quality products or low-quality services. Such companies are interested in quick income, they do not think about their network of partners and the future of the long-term business.

Over the past 10 years, millions of people, entrepreneurs, investors around the world who have been involved in Multilevel or Network Marketing have been deceived, have lost their savings, time, and energy. The result is massive disappointment in the concept.

The reason for this situation lies both in unscrupulous companies and in the lack of financial education among the audience of entrepreneurs. Many people believed in all the promises, invested their money in the network business without any knowledge and training.

At the same time, companies that used Multilevel or Network Marketing were interested in making large profits, which accumulated only by the CEO management and a few top managers. They often deceived their partners and used them only for their benefit.

Problems Of Introducing Innovations

Many companies and intermediary firms that work in innovative directions are not regulated by law and are located in offshore zones. Many of them, especially in the field of crypto-currencies and crypto-investments, simply took their clients’ money, and clients could not get legal protection.

The presence of such unscrupulous companies and intermediaries in the market is a blow to those companies that would like to innovate and operate with integrity.

Another pressing problem of innovations, especially in the field of finance and investment, is a large number of companies that are not interested in new technologies. They do not want or cannot implement them in their business processes, but at the same time, they prevent the legalization of new business concepts.

Requirements for companies in the field of the crowd investment industry and crowd investing

1. Companies must operate within the legal framework of their country, and their activities must be regulated and controlled by laws.

2. Companies, including those in the field of intermediary services, must offer completely transparent and fair terms of cooperation, especially in the field of investments.

3. Multilevel Crowdinvesting and Financial Mediation companies must obtain appropriate licenses from accredited regulatory organizations in both fiat and cryptocurrency markets.

4. Special associations should be created that will control the Multilevel Crowdinvesting market, as well as check its participants, companies, intermediaries, and their CEO.

At the same time, all these requirements should not be very complicated so that interested and conscientious companies could freely and legally use innovative technologies and concepts. This will save the investors themselves from cooperating with scammers, and will also help honest companies attract an audience of entrepreneurs for cooperation.

Andrey Khovratov

Andrey Khovratov

• Author of the Multilevel Crowdinvesting Development Concept and New Economic Evolution of the World

• Multidisciplinary professional investor

• Master in Network Business Management

• President with the affiliate network of 1,650,000+ people from 176 countries.

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