Since 1945, when Mytinger & Casselberry created the 1st documented MLM compensation plan for a company called Nutrilite, millions of people have joined a network marketing opportunity and many have gone on to make great fortunes.
But what is network marketing, precisely?
More important, is starting a network marketing business something that you should seriously consider as a choice to help take back control over your financial future? We’ll take a closer look to discover not only “what is network marketing” but also if it is sensible for you and your folks at this point in your life.
What is Network Marketing – Outlined
According to a Wikipedia entry, MLM marketing is a kind of marketing system that pays an independent contractor ( YOU ) a commission for product sales and also a commission for the sales of other independent contractors you hire to also promote a firms products.
The Small Enterprise Encyclopedia has a rather more challenging definition:
What is Network Marketing? It is a proven business structure which employs an independent distributor network to build the business by promoting products and services. Customarily these companies are also multilevel in nature meaning they pay out commissions earned on more than one level.
What? Are you confused yet?
Let’s break it down into language everyone can understand, shall we?
How Conventional Business Works
Every business offers a product or service for sale. The goal is to generate a large amount of sales and make a profit. To insure a nice profit, the price of getting the product to all the way into the end users hands must be less than the final selling cost. If it cost $10 to provide and promote the product and folk get it for $20, the company makes a decent profit. If cost-of-good-sold is $10 and the product sells for as little as $9.95, the company loses money and will soon find themselves out of business.
Traditionally a product is first made or produced. It is then packaged and shipped to a distributing warehouse. The distributor makes sales to a retail outlet and the retail outlet sells to the purchaser. Everyone tries to make a profit along the way.
A direct sales business frequently hires salespeople to literally sell the product or service straight to the ultimate user. For example, someone knocks on your door and offers to give you a free quote for landscaping. If you make a decision to hire this company, the direct sales person who came to your door receives a commission. So their livelihood depend wholly on how many sales they personally make.
What is Network Marketing Explained
Like each standard business, a network marketing business also offers a selection of services and goods for sale. And the goal is also to earn a profit by making sales at a price higher than it costs to get the product into the hands of the people purchasing it. But that is about the single thing a Multi Level Marketing company has in common with normal business because most multilevel marketing companies are a sort of direct sales business with a twist.
The twist is they don’t hire salespeople to bring their product to market. Instead they offer folk like you and me the chance to “sign up” as independent contractors to sell their products and services and make some cash if and when we makes sales. If you do not make sales, you are not making any money.
So far so good. It gets much better. Because you’re also allowed to refer other people to the company to “sign up” to become independent entrepreneurs as well and, when you do, you’ll also receive a commission on all of the products their new business brings to market. And since you can refer a limitless number of people to become entrepreneur, the income opportunity open to you is also unlimited.
What even more info about “What is network marketing??” Click now to see a network marketing compensation schedule explained and to discover exactly what you need to do to place yourself on the fast track to making wealth while enjoying your life.