This is quite a popular concept that's getting used by some top brands with successful results.
The cycle continues as every agent will recruit more such agents.Agents earn commission on every sale, and a percentage of the commission is credited to those that have recruited the agents.
It helps enterprises in managing the network and therefore the users within the network alongside their compensation.
They only earn a commission for sales.The philosophy of this model is to sell the merchandise.There is one promotional strategy- word of the mouth.Active agents are eligible to urge discounts and special offers which will encourage them to get more sales.The agent is responsible just for his/ her sales.There are many sorts of networks or levels during this marketing model.
Then come the distributors and dealers who take the products into the market through wholesalers.
The chain continues until the merchandise reaches the top customer.The hierarchy can take any form, counting on various factors.