So What Is Network Marketing?

It might be that if you are new to network marketing (also called MLM or multi-level marketing) you are not too sure just exactly what it is or how it works. Hopefully I can quickly explain!  The first and most important thing that you must know is that network marketing is NOT the same as pyramid selling. Network marketing is firmly established in many countries around the world as a tried and respected means of earning a living and indeed many countries have regulatory bodies to ensure high levels of business ethics and customer service.  Any product can be sold via network marketing and many companies choose to use it to reach their customer base and to sell their products or services. As with any business, success is not guaranteed.  Before start-up much research is put into consumer demand and profitability for the parent company and the distributors etc. It is essential to do this research if you are going to go down that road with your business.  If you are contemplating becoming a distributor for a network marketing company the same basic research is essential i.e. customer demand for the product which you will be selling, pricing level and of course the level of commission you will be receiving. 

Network marketing is based, of course, on the concept of ‘networking’. Everybody has a circle of people we know through our daily lives and each of these people have their own circle and so it goes on. Network marketing involves tapping into these circles not only to sell products but also to offer people the business opportunity to become a distributor in their own right, and to start the process of developing their own network for selling and recruiting.  As your network increases so do your benefits as the leader of the network, not only from your own sales but also from a percentage of the sales from the network, and of course, as the network grows so does this percentage or “residual” income. Remember that it is always better to have a small percentage of your income from each of a large number of people rather than a large percentage from each of a smaller number of people. Why? Because, if you lose one person, the difference to your income will be very small, whereas to lose one person from a small number could have a significant impact on your income.

So what is Network Marketing, also known as MLM (multi-level marketing)? It is a business that allows distributors not only to network to sell their product, but also to benefit from their downline’s downline, either to a limited depth or ad infinitum. Although different both terms tend to be used to describe the same thing.  As with any business, home based or otherwise, distributors need to work hard and to have the courage of their convictions and determination to succeed. You might think that a good product and compensation plan are the most important things but a good sponsor (leader) who can give advice and support is just as, if not more, important. Also, contrary to what you might think, a newcomer has as much chance of success as a long-term distributor provided that the research has been done and depending on the ‘network’ available to the newcomer.

Network marketing gives anyone the opportunity to start a business on a part-time basis with very little capital although there are more and more people who look on it as a full-time occupation and who are prepared to put the time and effort in to reap a good reward.  Unfortunately network marketing is no different from any other kind of business and some close down every year. These closures can affect thousands of people literally on a global scale but thankfully there are plenty other companies out there who use network marketing to sell their products and if the company you are involved in goes under you should have a ready-made network of contacts and distributors who might be interested in a new company! 

My Best Always,

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