Network marketing, also known as multi-level marketing, is a business model which involves a pyramid structured network of people who sell a company’s products. The participants in this network are usually remunerated on a commission basis. That is, people in this network get commission every time they perform the specified task.
You probably have an image firmly planted in your mind of what network marketing (also known as direct sales or multilevel marketing) is all about--housewives buying and selling Tupperware while gossiping and eating finger sandwiches, or a high-pressure salesperson trying to convince you how easily you can become a millionaire if only you and your friends and their friends and so on would buy and sell vitamins with him.
Both of these images couldn't be further from the reality of network marketing. It's neither a hobby nor a get-rich-scheme but an opportunity for you to earn money running your own part- or full-time business..
If you would like to know what exactly network marketing is and if it is right for you or not then this post is for you.
Too many people try to explain network marketing and end up making it really complicated when actually it is very simple.
In one sentence, network marketing is one of the best ways for people who have haven’t had any previous business experience to be able to start and build their own successful business. Thats it..
1. The Traditional Business
Traditional business is the most difficult. This is because you have to do everything yourself. This includes creating the brand, the logo, ,the design, the product or service, the distribution, the stock, hiring and training staff, customer services, finances and the sales and marketing just to name a few. An example of these type of businesses include Virgin and Apple..
2. The Franchise Business
The franchise business is probably the easiest type of business out of the three. This is because all of the work has been done for you. All you have to do is set up shop and begin running the system that is already in place. The problem with this type of business, which is why it doesn’t suit a lot of people is because it requires a large investment..
3. The Network Marketing Business
The network marketing business is very similar to the franchise business where 80% of the business has already been done for you. All you have to do is to market and sell the products. It requires a much lower investment however in general it can take time to build up and get going..
MLM or multilevel marketing is exactly the same as network marketing. The reason they call it MLM is because with this type of business you don’t only get paid from customers you bring into your business but you also get paid from your customers customers and your customers customers customers. You actually get paid on seven levels of customers which is why they call it multi level marketing..
The industry as a whole started out as “direct selling” otherwise known as direct sales. This is when people would go knocking on doors and selling products directly to customers. In direct selling you only get paid for the customers you get and you don’t get paid from the sales of customers referrals. Multilevel marketing takes this to the next level and is a more advanced and more beneficial way to own and run a business.
Some of the main reasons why people go into business is because it leads to true financial independence. This means every year you are working to make yourself and your family rich and not somebody .