What is Network Marketing

The New York Times bestselling author of "Rich Dad Poor Dad" Robert Kiyosaki has stated that network marketing is the business of the twenty first century. 

Network marketing is a method of direct selling that is basically made up of two parts: selling the product or service and recruiting .  Network marketing has been formally defined as "a direct selling method in which independent-agents serve as distributors and are encouraged to build and manage their own sales force by recruiting and training other independent agents.  Commission revenue is earned on the agent's own sales as well as on the sales revenue of that agent's recruits." 
businessdirectory.com/definition/network-marketing/html  


An agent's recruits are referred to as their "downline".  Network marketing is also known as "multi-level marketing (MLM)".  Network marketing is extensively used by numerous organizations including communication services, internet access and hosting services, financial programs, electrical power, solar power, insurance agents and more specifically tupperware, Amway, Mary Kay etc.

When a network marketing system is mainly acquiring its revenue from recruitment, it is dangerously treading on a pyramid scheme which is considered illegal.  By definition, network marketing is NOT a pyramid.  Normally there is no product involved in pyramids as its only concern is collecting money from new recruits.  A pyramid is just a money game and has no basis in real commerce.

Network marketing is a legitimate business.  It's based on providing real people with real legitimate products or services that they want and need.  Very little upfront capital investment is is required in any network marketing organization and there are no geographical boundaries.  Its proven system is based on basic dynamic principles that have been designed, created and paid for my the corporate team that has successfully gone through it before and now supplying it as the framework for new agents.  The real key behind network marketing is leverage.  

The advantages of network marketing are plentiful and include flexible hours, a perfect home based business and more.  This will be reviewed and continued in my next blog.