Direct selling method in which independent-agents serve as distributors
of goods and services, and are encouraged to build and manage their own
sales force by recruiting and training other independent agents.
In this method, commission is earned on the agent’s own sales revenue, as well as on the sales revenue of the sales-force recruited by the agent and his or her recruits (called down line). Also called multilevel marketing (MLM), cellular marketing, or by other such names, it is a multi-billion dollar worldwide industry that distributes practically any portable item, although restricted or banned in several countries due to its history as a vehicle for consumer fraud.
Network marketing is a type of business opportunity that is very popular with people looking for part-time, flexible businesses. Some of the best-known companies in America, including Avon, Mary Kay Cosmetics and Tupperware, fall under the network marketing umbrella.
Network marketing programs feature a low upfront investment–usually only a few hundred dollars for the purchase of a product sample kit–and the opportunity to sell a product line directly to friend, family and other personal contacts. Most network marketing programs also ask participants to recruit other sales representatives. The recruits constitute a rep’s “downline,” and their sales generate income for those above them in the program.
Things can get sticky when a network marketing network compensates participants primarily for recruiting others rather than for selling the company’s products or services. A network marketing system in which most of the revenue comes from recruitment may be considered an illegal pyramid scheme.
Since network marketing programs are usually exempt from business opportunity regulation and aren’t defined as franchises under state and federal franchise laws, you’ll need to do your own investigation before investing any money.
In this method, commission is earned on the agent’s own sales revenue, as well as on the sales revenue of the sales-force recruited by the agent and his or her recruits (called down line). Also called multilevel marketing (MLM), cellular marketing, or by other such names, it is a multi-billion dollar worldwide industry that distributes practically any portable item, although restricted or banned in several countries due to its history as a vehicle for consumer fraud.
Network marketing is a type of business opportunity that is very popular with people looking for part-time, flexible businesses. Some of the best-known companies in America, including Avon, Mary Kay Cosmetics and Tupperware, fall under the network marketing umbrella.
Network marketing programs feature a low upfront investment–usually only a few hundred dollars for the purchase of a product sample kit–and the opportunity to sell a product line directly to friend, family and other personal contacts. Most network marketing programs also ask participants to recruit other sales representatives. The recruits constitute a rep’s “downline,” and their sales generate income for those above them in the program.
Things can get sticky when a network marketing network compensates participants primarily for recruiting others rather than for selling the company’s products or services. A network marketing system in which most of the revenue comes from recruitment may be considered an illegal pyramid scheme.
Since network marketing programs are usually exempt from business opportunity regulation and aren’t defined as franchises under state and federal franchise laws, you’ll need to do your own investigation before investing any money.
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