What is Network Marketing?
While most people have heard the term Network Marketing, the truth is that many of those people don’t really know how to answer the question “what is network marketing?” They know it involves selling stuff and a pyramid of some kind, but that is about it.
The short answer is that network marketing is a way to change your future by helping other people find success. The long answer is a little more complicated than that.
Unfortunately, a lot of people think they know what network marketing is, but they are wrong. In some circles, network marketing businesses have a bad reputation because people tend to equate them with illegal pyramid scams.
Nothing could be further from the truth.
An illegal pyramid scheme is about people giving other people money. They aren’t buying anything and they don’t get anything in return. They are basically just hoping to convince people to give them money, and then hoping those people can convince other people to give them money. That is illegal.
An MLM business is about buying and selling products or services and earning commissions on those sales.
What Is Network Marketing?
When you get involved with a network marketing company, that company has products or services that they want you to sell. In most cases, you can simply sell the products and earn a commission. However, the more popular option is to try to get people to join your business so they can sell their own products.
The structure of a network marketing business looks like a pyramid. (like the picture on the left!)
Each specific network marketing company has different rules and requirements, however the structures of the organizations are very similar.
You are at the top of the organization. You will be allowed to sign up a certain number of people directly underneath yourself in the organizational chart. For this example, let’s assume you can have 5 people under you.
Each person you signed up can have up to 5 people underneath them. That means if all the spots are full, you will have 1 person at the first level (you), 5 people at the second level and 25 people at the third level. Once you get down to the 5th and 6th levels, you can easily have thousands of people in your downline.
This growth continues until you reach the maximum number of people and the maximum number of levels as determined by the company.
The beauty of the network marketing business is that you will earn a commission on anyone in your organization, even if someone else signs them up. Of course, you make more if you sign them up.
Clearly, it will be very difficult for you to get thousands of people to sign up for your business on your own. People who have organizations of that size know the real secret of network marketing success.
It isn’t about how many people you can sign up, it’s about helping all the people you do sign up learn how to generate their own leads. The more time and effort you spend helping other people, the better your overall results will be.
What is Network Marketing – Summary
Now you know the true answer to the question “what is network marketing?” It’s a way to change your future by helping other people build a business.
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