how network marketing works
network marketing is known by a variety of names including multilevel marketing mlm cellular marketing affiliate marketing consumer direct marketing referral marketing or home based business franchising companies that follow the network marketing model often create tiers of salespeople that is salespeople are encouraged to recruit their own networks of salespeople the creators of a new tier or upline earn commission on their own sales and on sales made by the people in the tier they created the downline in time a new tier can sprout yet another tier which contributes more commission to the person in the top tier as well as the middle tier thus the earnings of salespeople depend on recruitment as well as product sales those who got in early and are in a top tier make the most the fcc advises that that single tier network marketing operations tend to be more reputable than multi tier schemes 1advantages and disadvantages of network marketingthere is some stigma attached to the networking marketing business especially those with multiple tiers which can be characterized as pyramid schemes that is the salespeople in the top tier can make impressive amounts of money on commissions from the tiers below them the people on the lower tiers will earn much less the company makes money by selling expensive starter kits to new recruits the appeal of network marketing is that an individual with a lot of energy and good sales skills can create a profitable business with a modest investment a good rule of thumb according to the federal trade commission ftc is that an operation that ensures compensation which is based on actual sales to real customers tends to be more reputable than multi tier schemes in which people make money based on the number of distributors they recruit 1special considerationsanyone considering joining a network marketing operation should do their research before making a decision consider these questions 