Network Marketing (or NM) is a business model that combines direct marketing with
franchising.
In a typical network marketing arrangement, individuals associate with a parent company as
an independent contractor or franchisee and are compensated based on their sales of
products or service, as well as the sales achieved by those they bring into the business.
In a legitimate network marketing company commissions are earned only on sales of the
company's products or services. No money may be earned from recruiting alone ("sign-up
fees"). Analyze the compensation plan to determine whether participants are paid from actual
sales to customers and not from money received from new recruits. If participants are paid
primarily from money received from new recruits, then the company is an illegal pyramid or
Ponzi scheme.
Some less legitimate companies produce revenues primarily by attracting new participants
with the hope of a reward, selling them products or services of dubious value at inflated
prices, as opposed to selling products or services consumers would purchase at the given
price without regard to the opportunity attached. Evaluate the products or services and
determine if a significant percentage of consumers would continue to purchase them if the
participants do not make money from the underlying opportunity. If the products or services
have dubious value or if the participants must purchase excessive quantities without
reasonable intent to use or resell said items, then the company is likely a thinly veiled illegal
pyramid scheme.
Network marketing is also known as multi-level marketing (MLM). MLM businesses operate
legitimately in the United States in all 50 states and in more than 100 other countries. Some
businesses may use terms like "affiliate marketing" or "home-based business franchising"
because of the
image problem associated with the term MLM. This is due to the fact that it is often difficult to
distinguish legitimate MLMs from illegal scams such as pyramid or Ponzi schemes. because
many pyramid schemes try to present themselves as legitimate MLM businesses.
There are many different opportunities that in reality are a network marketing company or
MLM company, but they refuse to call themselves that because of the associated "bad
publicity" Each of these companies are best described as a non-traditional form of business.
Non-traditional businesses are generally worked from a home office. This eliminates the high
overhead of the traditional business. In today's high fuel prices one can save up to several
hundred dollars a month in just fuel costs by not having to commute to a JOB.
Network marketing companies usually offer reasonably priced products and services that
people consume in a short time. They have a benefit that most direct sales companies do not
have and that is residual income. It costs less to get involved with this form of business,
usually a few hundred dollars.
Network Marketing is about building a customer base of people with whom you have a
relationship, creating a multi-level network of others and teaching them to do the same.
Direct Sales Companies are neither MLM nor NM sompanies. They are seller-based and
market higher priced items, usually one time sales items. The benefits of these programs are
you make higher commissions but they have very little if any residual income. Essentially if
you stop working so does your income.
For more information from the US. Securities Commission Click Here
franchising.
In a typical network marketing arrangement, individuals associate with a parent company as
an independent contractor or franchisee and are compensated based on their sales of
products or service, as well as the sales achieved by those they bring into the business.
In a legitimate network marketing company commissions are earned only on sales of the
company's products or services. No money may be earned from recruiting alone ("sign-up
fees"). Analyze the compensation plan to determine whether participants are paid from actual
sales to customers and not from money received from new recruits. If participants are paid
primarily from money received from new recruits, then the company is an illegal pyramid or
Ponzi scheme.
Some less legitimate companies produce revenues primarily by attracting new participants
with the hope of a reward, selling them products or services of dubious value at inflated
prices, as opposed to selling products or services consumers would purchase at the given
price without regard to the opportunity attached. Evaluate the products or services and
determine if a significant percentage of consumers would continue to purchase them if the
participants do not make money from the underlying opportunity. If the products or services
have dubious value or if the participants must purchase excessive quantities without
reasonable intent to use or resell said items, then the company is likely a thinly veiled illegal
pyramid scheme.
Network marketing is also known as multi-level marketing (MLM). MLM businesses operate
legitimately in the United States in all 50 states and in more than 100 other countries. Some
businesses may use terms like "affiliate marketing" or "home-based business franchising"
because of the
image problem associated with the term MLM. This is due to the fact that it is often difficult to
distinguish legitimate MLMs from illegal scams such as pyramid or Ponzi schemes. because
many pyramid schemes try to present themselves as legitimate MLM businesses.
There are many different opportunities that in reality are a network marketing company or
MLM company, but they refuse to call themselves that because of the associated "bad
publicity" Each of these companies are best described as a non-traditional form of business.
Non-traditional businesses are generally worked from a home office. This eliminates the high
overhead of the traditional business. In today's high fuel prices one can save up to several
hundred dollars a month in just fuel costs by not having to commute to a JOB.
Network marketing companies usually offer reasonably priced products and services that
people consume in a short time. They have a benefit that most direct sales companies do not
have and that is residual income. It costs less to get involved with this form of business,
usually a few hundred dollars.
Network Marketing is about building a customer base of people with whom you have a
relationship, creating a multi-level network of others and teaching them to do the same.
Direct Sales Companies are neither MLM nor NM sompanies. They are seller-based and
market higher priced items, usually one time sales items. The benefits of these programs are
you make higher commissions but they have very little if any residual income. Essentially if
you stop working so does your income.
For more information from the US. Securities Commission Click Here
"I believe network marketing gives people the opportunity to build up the passive income they need for support while
they learn to become professional investors. Even if they have little money, they can still invest 'sweat equity' for five
years and begin to generate more than enough passive income to begin investing...Many famous franchises cost a million
dollars or more to buy. Network marketing is like buying a personal franchise, often for less than $300."
~ Robert Kiyosaki - Rich Dad Poor Dad~
they learn to become professional investors. Even if they have little money, they can still invest 'sweat equity' for five
years and begin to generate more than enough passive income to begin investing...Many famous franchises cost a million
dollars or more to buy. Network marketing is like buying a personal franchise, often for less than $300."
~ Robert Kiyosaki - Rich Dad Poor Dad~
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15 Reasons to Become
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How to Create a
Successful Affiliate
Marketing Program
How to be Successful in
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