Network Marketing - The Best New Money Maker

A network marketing business is based on selling or distributing products or services through a network. The business is also known as multi-level marketing (MLM), affiliate marketing, and referral marketing. Network marketing is a relatively new, non traditional way of doing business. The traditional way of marketing products is by moving products from the manufacturer through warehousing and then to a retail establishment. By the time the product reaches the consumer, these handling, retailing and advertising expenses increase its selling price.Network marketing is considered one of the hottest retail industries today. Some well known companies like Amway Corporation, Shaklee, Mary Kay, Tupperware and Avon use network marketing. Other companies have turned to network marketing because of the advantages in both domestic and international markets. It is a multi-billion dollar industry involving millions of independent business people around the globe. Long time network marketing advocate, Donald J. Trump, just recently started in the network marketing industry as well.Network marketing is used by these companies as part of their marketing strategy. It's designed to create a marketing and sales force that sells the company's products and services. This is done by building a "network" though word of mouth marketing. This "network" will use the products and sell them to others who in turn market them to other people. As a network expands the company's market grows with it.There are advantages to this kind of business. It does not require background or experience in business. It requires minimal investment upfront which covers a product sample kit. Common products offered are health supplements and beauty aids. The business can be done full- or part-time and it's possible to work at home. However, a sense of salesmanship and enthusiasm go a long way in this business.Many start off by going directly to family and friends. A common feature of this business is the regular business opportunity & training meetings. Guests are invited to attend. Product demonstrations and marketing plan presentation are held during these meetings. The meeting could also include moving testimonials from successful members of the network. After the meeting, guests have a better understanding of the network marketing industry and may then make an informed decision to start their own business.If the guest joins with the company, this person becomes part of a 'downline'. The sponsor stands to increase his network and his potential income. The sponsor profits from personal sales but also derives income from sales generated by his downlines. Success depends on building a network of downlines. Ideally, the sponsor is responsible for helping downlines build their own networks. But this doesn't mean that the sponsor does all the work.The income in MLM comes from what is termed as 'over-ride'. These are commissions from the sales of product or service from every member of the sponsor's network. The sponsor's income potential increases as more and more people join the network. This is the core of a MLM compensation plan. Very often, there are bonuses and other ways that a sponsor is paid as well.The network marketing business raises suspicions for some people. This is unfortunately due to people not fully understanding how the industry works. The truth is legitimate network marketing companies are not illegal pyramid schemes. This notion began when the Amway Corporation was accused of being an illegal pyramid. This was in 1975. A US Federal Judge later determined that the Amway Corporation's networking marketing plan was a legitimate business model. However this doesn't mean that all companies who claim to be are legitimate businesses. Due diligence should be done before starting any kind of business, including a MLM business.