Pros & Cons of Social Commerce + Network Marketing
- jkfitday
- Oct 2, 2024
- 7 min read
Let’s break down social commerce and network marketing together step by step.
Here are what people tell and don't tell you:
Social Commerce -- The Process
1. Pick Products to Sell: In social commerce, you start by deciding what products you want to sell through your social media. It could be things like fashion, beauty products, gadgets—whatever you think your followers would like. You might find products from suppliers, brands, or even make your own stuff.
2. Set Up Your Social Media Shop: Instead of a traditional website, your store is directly on social media platforms like Instagram, Facebook, or TikTok. These platforms allow you to create a shop where people can browse, click, and buy products right from your posts or stories. It’s like having a mini store on your profile.
3. Post Content to Promote Your Products: You don’t just have a shop; you need to show off your products. You create fun posts, videos, and stories about the products. For example, if you're selling sneakers, you might post cool pics or videos showing how they look, how comfortable they are, or how to style them.
4. Followers Buy Directly from Your Social Media: Your followers see your posts, and when they like a product, they can buy it right there without even leaving the app! The social media platform handles most of the payment stuff, making it super easy for your followers to buy.
5. Earn Money from Sales: When someone buys from your shop, you get paid. Just like with dropshipping or regular online stores, you either ship the product yourself or use a supplier who ships it for you. Social commerce makes it easy to turn your followers into customers because everything happens on social media.
Network Marketing -- The Process
1. Join a Network Marketing Company: Network marketing, also called multi-level marketing (MLM), is where you join a company to sell their products. Companies have their own compensation structure based on revenue / sales on monthly basis. You sign up as a distributor, and your job is to sell their products to people through your social networks.
2. Sell Products to People You Know: Once you’re in, you start promoting and selling the company’s products, often to friends, family, and your social media followers. You might sell things like health supplements, beauty products, or home goods. You earn a commission every time someone buys something from you.
3. Recruit Others to Join: Here’s where the "network" part comes in. In addition to selling products, you also recruit others to join the company as distributors like you. These people become part of your team. When they sell products, you earn a small cut of their sales too.
4. Build Your Team: As your recruits bring in new people and those people start selling, your team grows. This is called your downline. The bigger your downline, the more commissions you make from everyone's sales. Your goal is to help your team succeed so that you all earn more.
5. Keep Growing and Earning: The more you and your team sell, the more money you all make. Plus, as you recruit more people and help them succeed, you can move up the ranks in the company, which often comes with bigger bonuses or rewards. It’s like a snowball effect—the bigger your team, the bigger your potential earnings.
Combining Social Commerce and Network Marketing
Now, imagine combining social commerce and network marketing together:
1. Use Social Media to Sell Your Network Marketing Products: You can use social media platforms like Instagram, Facebook, or TikTok to sell the products from your network marketing company. Your shop can be right on your social profiles, and you can post content to attract buyers, making it super easy to sell.
2. Recruit Your Followers to Join the Network: Since you’re already active on social media, you can also use it to recruit your followers to join your network marketing team. Post about the business opportunity, explain how they can earn money too, and encourage them to join your team.
3. Build Your Team through Social Media: Once you recruit people, you can use social media to stay connected with your team, help them sell more products, and grow their own teams. The bigger your team, the more potential for everyone to earn.
4. Grow Your Sales and Your Network: By combining the power of social commerce (selling directly through social media) and network marketing (recruiting others), you can grow both your product sales and your downline at the same time, increasing your earnings from both.
In short, you use social media to sell products and build a team, while earning commissions from both sales and recruits. It’s like running a social media shop while also growing a team of sellers who help you earn more!
Pros & Cons
Here’s a table outlining the pros and cons of social commerce combined with network marketing, specifically focused on daily essential items:
Pros | Cons |
Access to a Large Audience: Social media platforms enable reaching a vast audience, making it easier to promote daily essential items. | Saturation of the Market: With many brands and affiliates selling similar daily essentials, standing out can be challenging. |
Community Building: Network marketing fosters a sense of community, allowing affiliates to connect with customers and build relationships. | Dependency on Recruitment: Success often depends on recruiting new members to the network, which can divert focus from selling products. |
Low Initial Investment: Starting a social commerce and network marketing venture typically requires a lower upfront investment compared to traditional retail. | Pressure to Meet Sales Quotas: Affiliates may face pressure to meet sales goals, which can be stressful and discourage new recruits. |
Flexibility: Affiliates can work from anywhere and set their own schedules, making it suitable for those looking for part-time opportunities. | Potential for Misleading Claims: Some affiliates may overstate product benefits to make sales, which can lead to customer dissatisfaction and damage the brand’s reputation. |
Recurring Income Potential: Selling daily essential items can lead to repeat customers, providing a steady income stream for affiliates. | Complicated Compensation Structures: Network marketing often has complex commission structures, making it difficult for affiliates to understand how much they can earn. |
Social Proof: Customers are more likely to trust recommendations from friends and family on social media, enhancing sales potential. | Time-Consuming: Building a network and establishing credibility on social media can take time and effort, delaying potential earnings. |
Diverse Product Range: Daily essentials can include a wide variety of products, appealing to different consumer needs and preferences. | Risk of Burnout: Constantly marketing to friends and family can lead to burnout or strained relationships if not approached thoughtfully. |
This table summarizes the main advantages and disadvantages of combining social commerce with network marketing for daily essential items. It provides opportunities for growth and income but also comes with challenges related to market saturation, recruitment, and potential misunderstandings in product claims.
Comparison With Drop-shipping
Here’s a comparative table analyzing the long-term growth potential of dropshipping, affiliate marketing, and social commerce combined with network marketing:
Method | Long-Term Growth Potential |
Dropshipping | - Scalability: Dropshipping allows for easy scaling since you don’t have to manage inventory. Growth can come from adding new products and markets. - Evolving Market: As e-commerce continues to grow, dropshipping can tap into various niches. However, competition is high, requiring unique offerings or marketing strategies for sustained growth. - Supplier Relationships: Building strong relationships with reliable suppliers can lead to better pricing and product offerings, supporting long-term success. |
Affiliate Marketing | - Passive Income: With a well-established platform, affiliate marketing can provide a continuous stream of income through evergreen content and recurring commissions. - Brand Partnerships: Successful affiliates can cultivate long-term partnerships with reputable brands, increasing income stability. - Niche Focus: By targeting specific niches, affiliates can build loyal audiences, contributing to sustained growth. However, market trends can impact long-term viability. |
Social Commerce + Network Marketing | - Community Loyalty: This approach fosters community, which can lead to loyal customers and sustained engagement over time. - Diversification: As more daily essential items and brands enter the market, there’s potential for expanding product offerings and reaching broader audiences. - Recruitment Opportunities: Successful network marketers can continually grow their teams, enhancing income potential. However, reliance on recruitment can also limit growth if saturation occurs. |
Summary:
Drop-shipping offers scalability and flexibility but faces high competition.
Affiliate marketing has potential for passive income and stable growth but requires a niche focus and market adaptation.
Social commerce combined with network marketing builds community and loyalty but depends on effective recruitment and market differentiation.
Overall, each method has unique strengths and challenges for long-term growth, and success often depends on effective strategies, adaptability, and market trends.
Must Do Research Before Start-Doing it
Before diving into social commerce and network marketing, it's crucial to conduct thorough research to ensure that you're making informed decisions. Here's a breakdown of each point you mentioned, along with some additional considerations:
1. Check Company History and Recession Proof
Company Background: Research the company’s founding, mission, and values. Look into its reputation, stability, and any past controversies.
Recession-Proof: Assess whether the company’s products or services are essential or provide value during economic downturns. Industries like health and wellness, personal care, and household essentials often perform better in recessions.
2. Check Lines of Products That Really Benefit Customers
Product Efficacy: Investigate the effectiveness and demand for the products offered. Look for reviews, testimonials, and scientific backing if applicable.
Target Market: Understand the target demographic and whether the products genuinely meet their needs. Consider conducting surveys or focus groups to gather opinions.
3. Check Compensation Plan
Sales-Driven Earnings: Ensure that the compensation plan focuses on sales of products rather than recruitment. Look for clear structures that reward selling and customer retention.
Transparency: Review the compensation plan thoroughly. Check for any hidden fees or conditions that might affect your earnings. Consider speaking to current members about their experiences.
4. Check Person Credibility Who Invites You
Background Check: Research the person inviting you to join. Look into their track record, experience in the industry, and their standing within the company.
References: Ask for references or testimonials from others they’ve worked with. This can give insight into their credibility and supportiveness as a mentor.
Additional Considerations
Training and Support: Evaluate the training programs offered by the company. Good training can significantly impact your success in network marketing.
Market Saturation: Investigate how saturated the market is with similar products. A crowded market can make it difficult to stand out.
Legal Compliance: Ensure the company complies with relevant regulations to avoid legal issues down the line.
Personal Alignment: Reflect on whether the company's values and products align with your personal beliefs and goals.
Taking the time to conduct this research can help you make informed decisions about your participation in social commerce and network marketing.
