Network marketing, or Multi-Level Marketing (MLM) is way of doing business such that a company distributes its products directly to consumers, through a network of regular Joes/Janes like you and me.
Network marketing (or MLM) sometimes gets a bad rap, by being compared to pyramid schemes. There's a big difference - pyramid schemes typically have no real product. They don't emphasize the sale of a real product to paying customers. Instead, its all about recruiting people into the organization, who pay fees to join... that money then rewards people higher in the pyramid structure.
But network marketing, or MLM, is a proven, viable way to do business. It doesn't work for everyone! But it may work for you.
In fact, recently, Robert Kiyosaki (of the Rich Dad, Poor Dad fame), and Donald Trump (of "The Apprentice" TV show fame) both supported network marketing.
In Robert Kiyosaki, who authored "The Business School for People Who Like Helping People" (book about Network Marketing), says that he considers Network Marketing a perfect business, because the network marketing company will help you get the business skills to get you rich. For people who want to make the shift to business owner, one of the beauties of the multi-level marketing company is that you can do that at a low cost, and have time to slowly transition your core values from the employee mindset to the business owner mindset.
He goes further to say: "The #1 asset a person can build, is to build a business. That is the smartest thing you can do."
Here's a video I found, featuring Robert Kiyosaki, on Youtube:
(Feel free to ignore the advertising at the end of the video...)
So, how do you make money?
There are three typical ways to make money:
Selling the company's products to paying customers
Recruiting new distributors into your "down line"
Having your down line sell the company's products to paying customers
The real fortunes in network marketing are developed by people who build large down lines, and also sell products to paying customers on a regular basis. Thus, they earn residual income from their direct customers, as well as the direct customers of their down line. With a robust down line, a distributor could even potentially stop selling to their down line after a point - and still make a good living.
Which company do I go with?
Companies that use network marketing, or MLM, to distribute their products, divert money that would be spent on product advertising and shelf placement in stores like Kroger, Wal-Mart, etc... to paying commissions to the individual distributors. So - it's a pretty viable system for them. You may have heard of network marketing giants like Quixtar and Mary Kay. But there are hundreds of others as well. Here are some suggestions on how to know which network marketing company to pick.
Network Marketing (MLM) provides HUGE benefits for entrepreneurially-minded people, who want to create another income stream for themselves. It takes away the entrepreneurial challenge of building an organization, a structure, a delivery mechanism, for your product. As a matter of fact, it takes away the need to create a profitable product. They do that for you!
Your job as a distributor, then, is boiled down to finding customers, and selling to them. And finding other entrepreneurs to join your down line, to become distributors as well.
With the advent of the Internet, Network Marketing (MLM) has been enhanced. The Internet allows network marketing companies to facilitate marketing and order taking a lot more effectively.
It also helps network marketing distributors reach prospective customers and down line partners.
