What is network marketing? Is it a pyramid scheme? And does it work? Network marketing is a multi-level marketing strategy for the sale of goods or services in which the revenue of the MLM business is derived primarily from the sales of recruits. However, recruits can also come from other sources such as those who join the business because of advertisements or the friends of friends.
The concept that what is network marketing is a pyramid scheme was first mentioned by Steve Nison, in his book, Be Your Own Boss: A Proven System For Building Multi-Level Marketing empires. The IRS has determined that pyramid schemes are illegal. In network marketing, however, this is not necessarily true. A pyramid only has recruits; however, it can also have levels or tiers, but the core of the business will always be made up of just the recruits. Thus, what is network marketing, is not a pyramid scheme.
The reason behind this is that network marketing companies offer their recruits a variety of options and routes to progress through. First, there is the direct method in which the salespeople make sales to potential clients by personally contacting them and asking for the business. This is often considered a cold call. Second, there is the indirect method wherein the salespeople recruit others who will help them build their database and eventually become potential clients themselves. Each tier of salespeople has different responsibilities and a sense of urgency develops among each tier as they try to accomplish the ultimate objective – more clients. Want to get more clients? Go to www.scamrisk.com.
One way in which it sets itself apart from other network marketing companies is by allowing its salespeople to develop their own home offices. In addition to allowing the salespeople to separate their personal lives from work, this is also a great help when it comes to recruiting new members. Because the company only pays for individuals who actively make calls and sign new contracts, there is no need for a huge building with a lobby. Each of the salespeople will have their own dedicated office space, just like any regular office. They will also have access to the company’s resources and tools.
Another trait unique to businesses is the involvement of each of their salespeople in their own personal development. In a multilevel marketing or network marketing company, each person is taught how to promote and sell the business. This is usually done by involving the individual in decision-making about what products should be sold, how they should be presented, and what methods are best for each specific client. In a network marketing company, each salesperson will also have the opportunity to attend seminars and conferences on their niche to hone their skills and gain more knowledge on the subject matter.
One other trait unique to businesses is the inclusion of a charity known as the Friends. Through the Friends, recruits are trained in direct marketing business techniques and taught the art of networking. The community is so involved in this charity that nearly one hundred thousand people have been called to serve as mentors. These mentors bring their own network of business contacts and customers to the program, which helps ensure that recruits receive the highest quality training available.
When learning what is network marketing, it is important to make sure that you find a good solid business model. There are literally thousands of direct marketing companies to choose from today. Make sure you choose a company that has a proven track record and strong customer service. Choosing the wrong company could mean wasting your time and money while failing to learn what is network marketing.
Another key component to what is network marketing is that each person is taught how to create their own downline. In a multilevel network marketing business or MLM, the sponsor earns a commission based on the sales of his or her downlines. If you join an MLM company and the downline members do not earn a commission, they will simply quit. Therefore, it is crucial to create your own downline to help promote your product. You will earn a commission when the new tier is sold.