If you have ever given serious thought to working from home or making money online then you have probably come across the concept of network marketing. You may have even sat through a business opportunity meeting for a network marketing/MLM company and walked out just as confused as when you went in. Maybe even moreso. Hopefully by the time you finish reading this post you will have the answer to that oft-asked question: “What is network marketing?”
Ok, so you may have noticed above that I used network marketing and MLM synonymously. That is because network marketing is pretty much just the current phrase for MLM (multi-level marketing). Okay, so let’s break that down into bits.
Multi means more than one. Obviously.
Level (for this purpose) is likened more to generations. For example, in a family you have the parent, the child, the grandchild, the great grandchild. And so on.
Marketing is defined as “the process of communicating the value of a product or service to customers, for the purpose of selling the product or service”.
So now we can put it all together. Multi-level marketing refers to a business model in which a company’s sales force (also known as independent contractors, distributors, consultants, representatives, etc.) are compensated for promoting and selling the company’s products and services. These individuals are compensated on multiple levels. This means that they are compensated not just for their personal sales, but for the sales of the people that they recruited, the people that THOSE people recruited, and so on.
All companies need a way to promote their products and services. Some companies hire sales reps to sit in offices and do it for them (like Pam, Jim, Dwight and the rest did for Dunder Mifflin/Sabre on “The Office”,lol). Some hire web designers, graphic designers, and marketing specialists to promote their products online. Some pay for radios, television, and prints ads. Network marketing companies do it a little differently. They allow regular people (like you and I) who enjoy their products and services to promote their products for them through mostly word-of-mouth advertising. Since they save so much money on advertising (which can easily run into the hundreds of thousands and up depending on the sizeof the company and their marketing goals), they are then able to pass that money down to us in the form of compensation. They get word of mouth advertising (the best kind of advertising). We get paid for helping them to grow their business. It’s a win-win situation.
That is network marketing in a nutshell.