What is Network Marketing? – Definition

So you probably know by now, that the key to creating wealth is by owning your own business.

Maybe you got as far and completed a business plan. When you got to the part about how much it was going to cost to start your business you are wondering where you were going to come up with all that money!

Well there is another alternative.

The alternative cost relatively low, next to nothing to get started, plus has a proven track record to make more people independently wealthy.

The business model is called multilevel marketing, MLM, or network marketing.

So what is Network Marketing or MLM?

Network Marketing is a structured business model. The way it works is that the company pays you a percentage of the amount of work (sales) that you bring into the company, and also it pays you a percentage of the amount of work that the people that you introduced into the business does also! So no matter what, the company will pay you a percentage of the amount of sales that you first initially brought into the company. And this will happen as long as the people that you brought into the business and the people that they brought in to the business, so on and so on purchase the product or service each month building their own business while paying you a percentage on every individual effort on your team (downline).

This is called residual income.

When you start making $5,000 a month no matter if you actually work the business or not, and get paid for it for that month, this is like having $1 million in the bank and getting paid between five and 6% on the interest, this is call passive residual income.

Have you ever heard the saying, I would rather get paid 1% of 100 individuals rather than doing 100% of the work myself. This is called leverage. And this is a quick summary of the business model of any network marketing company, or MLM.

Now of course there are better compensation plans out there. They have different structures that you will come to see called a matrix, binary, stair stepper, unilevel, and so on.

Every compensation plan that is partnered with its company is different. Most companies require a requirement for you to get paid called a auto-shipment, or a volume requirement or how many people you bring into your business to receive commissions each month.

Every legitimate network marketing company or MLM must have a product or service. Now if that company does not offer a product or service then nine times out of 10 that company is a scam and usually illegal.

In a nutshell that is what network marketing is all about. It is my recommendation, especially how the economy is right now, to get involved and start your own Network Marketing business – (home based business, mlm, multilevel marketing) as soon as possible.