Network marketing is that method of selling and promoting products or services which makes exclusive use of a network of people to achieve their goals. The products are distributed through the network. They can not be found in classic stores and in order to purchase them you have to become a member. Most members will just purchase products for their personal use only. Others, determined to make a living out of network marketing, will work hard to recruit other people and build themselves a strong down-line, which may give them a nice income level, even if they do not actively promote the business anymore.
Network marketing is also called multi-level marketing, because of the multiple levels of compensation within the sales force representatives. The more referrals a person brings into the network, the bigger their responsibilities will be. When their referrals bring other people in, the first ones will also get commissions on this new level. Compensation levels may go as deep as seven or even ten layers. This is the dream of every network marketer: to build a down-line of active and motivated people. That is where the true money is. However, in order to get to that point, one needs to work hard for many years without any compensation and under the suspicious looks of their family and friends.
This is the biggest challenge of the network marketer: to overcome objections and suspicions of their loved ones. It is easier if both husband and wife are in the same business, but it is also more risky, as they will have all of their eggs in the same basket. Not to mention, the basket will be very fragile for a long while in the beginning of their journey, so it is certainly smaller that one of them keeps a job outside the network.
Suspicions may have a real basis, though, as many pyramid schemes offered and promoted themselves as MLM businesses. When they turned out to be fraudulent schemes, people turned them against all multi-level marketing businesses, without difference.Those empty network marketing schemes collapsed one after another, leaving most members of the network empty-handed. There were a few members, most likely the top ones, who made good money, but when the chain was broken, more than 90 percent of the participants had to suffer losses and live with that.
Independent, active and persuasive people have the best chance to put network marketing to good use and record levels of success unknown to the largest majority. While, broadly contested, network marketing is still a force today, with giant companies using it as their sole promotion method. Neverheless, we can observe a shift in the way they do marketing. We now see television advertisements for network marketing businesses, we see ads in print, we see representative booths inside shopping centers and malls. Years ago, these practices were unknown to this type of business and it would have been crazy even to think that they could be employed to help distributors broaden their down-line network.