Written by Out Sourcer in Education
Here we discuss the truth about network marketing.
What is network marketing?
Networking marketing is a type of business model which uses person-to-person selling by affiliates. An affiliate is someone who works for a company promoting and selling their goods and services.
However, when people think about network marketing, they often think about the dreaded pyramid scheme. Nevertheless, there is a clear difference between both.
Firstly, networking marketing is a legitimate business model and can often provide great results for both marketers in the project and also the customers purchasing the products. Its aim is to provide value and on the flip side businessman and woman can make a lot of money.
On the other side, pyramid schemes are designed to take advantage of people. The model works by making the people at the top richer.
This type of network marketing pays out a commission to an affiliate when a good or service has been purchased. It does not offer any commission from recruiting more affiliates.
In a two-tier network marketing structure an affiliate can also make a commission on the goods and services sold by other affiliates they recruited to the program.
Multilevel marketing also known as a MLM is a structure very similar to two-tier marketing however it pays out on a multi level basis. Therefore, the affiliate receives an income more than two tiers deep. As a result, affiliates can make an income from the commission on the goods and services sold by the affiliates recruited by the affiliates that the affiliate recruited. (Now that is a mouthful – but the only real way of explaining it)
The results can be impressive depending on the amount of energy, time and dedication the affiliate commits to the project.
There is quite a lot of stigma surrounding certain types of Multi Level marketing for example Pyramid schemes.
Overall, network marketing can be very effective if done correctly. However, we recommend staying well away from any multi level marketing scheme.
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