Network Marketing
What's It All About?

You have probably heard the terms "network marketing" or "multi-level marketing" (or mlm). What exactly is network marketing all about? (If you are already involved with a network marketing opportunity, be sure to read my MLM Tips).

Before I go any further, I need to clarify a couple of things. First, in most cases, multi-level marketing enterprises fall under the category of home-based business. So why am I separating mlm out to talk about it in its own page, rather than as part of my discussion of home-based businesses? Well, I do discuss it a bit on my home based business pages, but the topic is so big that I am choosing to devote an entire section of the site to it.

Second, please know that this is not intended to be an exhaustive discussion of network marketing. We'll explore it from several angles and I'll share some terrific resources to help you learn more.

So, what is network marketing? Network marketing and mlm describe how a product or service is distributed. There are vitamin companies, video-streaming companies, cleaning product companies, web-site development companies, cosmetic companies, and many others that choose to distribute - sell - their products through a network of distributors, each of whom operate as independent consultants for the company.

These independent business people make money in at least two ways - by selling their products or services and by bringing other independent consultants or distributors into the company. Those new consultants make money by selling the products or services and by bringing new consultants into the company themselves...and so on...and so on.

The compensation plans for these companies vary greatly, so it's difficult to explain any hard and fast rules; however, in a nutshell, independent consultants make a percentage of the product they sell and in most cases, a percentage of the product sold by the consultants they brought into the company. How deep those compensation arrangements go (i.e., how many levels of "downline" you can earn income from) varies from company to company. Most companies also offer an array of bonuses for achieving different levels of performance.

The independent business people, or consultants, who work for these companies are called by different titles, depending on the company. They can be referred to as consultants, distributors, affiliates, or a variety of other titles.

The term "upline" refers to the person who brought you into the business (and those who brought them into the business). The term "downline" refers to those you bring into the business (and the ones they bring in, and so on). When a network marketer refers to his or her "organization," he or she is typically referring to the entire group of his/her downline individuals. So, each person has their own organization (their downline) and is part of someone else's organizations (upline).

There are some definite advantages to choosing a company that distributes its products and services through network marketing. Here are just a few:

1. Low start-up costs. While there are some exceptions, most mlm companies are fairly easy to join and don't cost as much as it would to buy into an established franchise (which can cost between $10,000 and $150,000 to join). You need to be careful about companies that ask for a high buy-in, but most are not unreasonable.

2. Great for home based business. Mlm endeavors are perfect for folks who want to work from home! You don't have to have a separate location or a staff to start. Most (although not all) who succeed in network marketing do so without ever setting up an office outside their home.

3. There is incredible money to be made. It's true. There are lots of people who make a lot of money through mlm. Of course, not everyone does (for many reasons). We'll talk about the factors that lead to success or failure later.

4. Excellent training and coaching. One of the biggest advantages of multi-level marketing businesses is the built in training and coaching you get when you join. Remember, it is in your upline's interest for you to succeed since she benefits financially from your success. The result is lots of coaching and assistance, all designed to help you succeed.

5. Freedom. Because you are an independent business person, you work for yourself. You reap all of the benefits that other self-employed people do. You manage your own schedule. You enjoy certain tax benefits. You are your own boss. Your upline is not your boss - just another business associate with whom you have a mutually beneficial relationship.

6. Part-time or full-time - you choose. You can start your business part-time and then keep it that way, or build it to a full-time endeavor. It's your choice. You don't have to take the big leap to self-employment all at once (or ever). maybe you only want to earn a few hundred dollars more a month, or maybe you want to earn enough to quit your job. In mlm companies, there is room for both types of people - and many in-between.

In spite of these incredible advantages to network marketing, there are some people who shy away from mlm opportunities. In many cases, these are people who would not be successful in any entrepreneurial pursuit because they lack the entrepreneurial mindset or some of the other chacateristics of successful entrepreneurs. However, this is not always the case.

Some people are just not well suited for the typical recruiting and prospecting methods of many network marketing enterprises. I'll share more about this in future pages on this site.

However, there are some new and highly effective methods for prospecting using the internet and other technological tools. If you have been in a network marketing centure and have struggled with prospecting, this new approach may work for you. New ebook reveals how to get PAID to prospect people! Click Here!

So, just what does it take to find network marketing success? Click here to find out.

There are many network marketing opportunities to choose from. A SWOT analysis can help you choose between companies.

Read my list of ten things to consider when choosing a network marketing business opportunity.

Click here to learn about my #1 favorite network marketing choice!

Click here to learn about the best home business for women!

Would you like to learn more about network marketing, building a home based business, and how to effectively market your small business? Sign up for my free e-zine! The Motivator can be your weekly small business guide, delivered directly to your inbox!

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