Network Marketing Explained Network Marketing provides business opportunities to the masses. Whether or not you pay any heed to the negativity that sometimes surrounds this line of work, it remains a fact that many people achieve success beyond their wildest dreams thanks to Network Marketing.
There are some Network or Multi-level marketing companies that have more people earning over $100,000 USD a year than any other company in the world. So how do they work?
All legitimate network marketing companies have products to sell. Instead of hiring salespeople and offering up a 10% commission with a low basic salary (or similar), they instead allow people to “join” as partners. They handle all sales themselves, work for themselves, and get a much larger commission, sometimes as high as 50%.
Those people can then invite their customers, friends, or even strangers to join the business too, should they want to experience similar financial and time freedoms. The person who invited them, the “sponsor” receives a percentage, usually around 5%, of their sales as a commission from the company. They do not take a share of their “downline’s” earnings, but from the company instead.
Over time, by recruiting lots of downline wider and deeper (downline recruiting downline), and teaching them all to create sales of the product efficiently, the original partner can be receiving a large sum of money from their own sales, but more importantly from commissions, they earned from downline. Essentially, once the foundations have been laid, the earning potential is endless.
Some people perceive this business method as a pyramid scheme, but it is perfectly legitimate and ethical. The pyramid schemes that are illegal actually pretend they are Network Marketing companies to try and look legitimate, but tey has one large difference.
A real, legitimate MLM will offer products with value, that can sometimes massively improve people’s lives, and are always something that people want. No fees are receiving by actually “recruiting” somebody, just when they sell products.
A pyramid scheme on the other hand will not have a product, or it will pretend to have a product, but will really just be selling the business opportunity, and people will be recruiting people based on making money recruiting people. There are many companies like this out there, and unfortunately, they give legitimate network marketing companies a bad name.
Open Door Policy
Because recruitment and growing a downline is a numbers game, there is rarely a situation where somebody is refused entry into an MLM. As long as they have somebody to sponsor them, they are good to go. This has its good and bad sides.
The good side is that it really means absolutely anybody has the opportunity to grow a real business and achieve fortune, without needing a lot of start-up capital or experience. Good network marketing companies provide plenty of training, and successful partners are always offering insight into their downline to help everybody grow.
The bad side is that all sorts of scammers and “get rich quick” people end up joining network marketing companies, behaving unethically, and again giving those companies a bad name. Even after they are expelled, the damage stays.
In the end, network marketing is a unique opportunity for hundreds and thousands of people and has proven this time and time again over the years. Sticking with one of the major companies can change lives. The important thing is not to get mistaken and fall for one of the mimic pyramid schemes and end up getting burnt.