Target audience and competition

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This factor is the main difference in business model strategies. In traditional business, sales are made to end consumers, so the main priority is the product that is offered to them. Competition here occurs between identical or very similar products. Thus, companies compete by offering a better price, higher quality and additional product benefits.

In network marketing, your end product is earning opportunities, and instagram data your target audience is people who are interested in additional income. Competition comes down to the fight for the most attractive offer for earning. Therefore, in the MLM market, you will have to compete with companies that sell completely different products.

2. Initial investment

To launch a classic online store, you need to have start-up capital for website development, product purchase, warehouse rental, employee hiring, as well as marketing and promotion. All these aspects entail considerable financial costs not only at the initial stages, but also throughout the entire period of the business's existence.

To create an MLM company, larger initial investments are required. In addition to the costs of purchasing products, renting warehouse space and promotion, launching a network business requires significant investments in developing a high-quality compensation plan and specialized software. However, despite the higher initial investments, the results and profits that MLM companies receive are several times higher than those of a classic business.