So What Exactly Is Network Marketing?

It might be that if you are new to network marketing

, also known as MLM or multi-level marketing, you are not to 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 very 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. Network marketing started in the USA and some of the longest-standing companies using this method include Amway, Kleeneze and Ann Summers. As with any business success is not guaranteed and research into consumer demand, profitability for the parent company and the distributors etc. is essential if you are going to go down that road with your business. Likewise if you are contemplating becoming a distributor for a network marketing company the same basic research is essential ie customer demand for the product which you will be selling, pricing level and of course the level of commission which you will be receiving.

Network marketing is based, funnily enough, 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 the network, or downline, increases so the leader of the network benefits not only from their own sales but also a percentage of the sales from the network. As the network grows this percentage, or residual income, increases. 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 from many 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 MLM (multi-level marketing)? This allows distributors not only to network outwards to sell their product but also to benefit from their downlines 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 determinattion to succeed. You might think that a good product and compensation plan are the most important things but a good sponsor who can give advice and support is just as, if not more, important. It is not necessary to be in at the beginning of something and sometimes it makes more sense to the first time network marketer to eleminate the risk of a new product and to go with a tried and tested product. 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 product! And even if your parent company doesnt go down there is absolutely nothing to stop you from using your contacts and distributors to try and sell another totally different product, thereby increasing your income.

Network marketing can be a high risk business but the rewards can be substantial. A lot will depend on you and your abilities and personality but a lot could also depend on the people you sign to your downline, on their business acumen, their contacts, their personality and quite often on their sheer good luck!

by: C. Brodie

POST COMMENT

My Personal Top 4 Network Marketing Tips Funded Proposal Marketing - What Is It? How To Succeed At Network Marketing Facebook Fan Page - How To Use It For Book Marketing Article Marketing Is Hard Work Unless You Outsource It A Beginner's Guide To Successful Email Marketing Successful Telemarketing Lies With Good Call Skills Affiliate Marketing With Clickbank Marketing Department Or Technical: Where Does Seo Fits Better? A Way To Present What Exactly Your Prospects Want Once Online Marketing Landing Your Dream Job: Marketing Yourself Doing Marketing Strategies Well To Make Profits How Marketing Through Email Helps?