Why network marketing? How MLM works!

How network marketing works!

So what is network marketing? what is home based business? Why MLM and what is an affiliate? Imagine you want to sell a product for a network marketing company. You’re convinced that product will sell so you join up, pay a membership fee and receive some training, marketing materials and a product, you are now a distributer of that product or product range. You then work on a self employed basis as an affiliate.

When you sell a product to a customer you get paid a commission by the company, so if you sell to ten customers for example, you get commissions on each sale, however if you recruit another distributor to sell that product (for which they receive training the product and the rights to sell the product) and they then sell to ten customers, you then get a commission on all the sales they make.

This commission will be less as a percentage than the commission on your normal customer sales but as the new distributor makes more and more customer sales and recruits more distributors and they in turn sell and recruit, then gradually your smaller percentage commissions from your original recruit becomes a substantial amount of money.

As the levels in the network underneath you increases, your commission payments as a percentage will decrease, if it did not the company would end up paying out all its profits in commissions. The price of the product stays the same for the customer but the sales increase exponentially making it possible for the company to pay commissions all the way down the chain.

This is not a new idea but none the less a brilliant one as it reduces advertising costs for the company and gives individuals the chance to develop their own home business!

Before the days of the internet, some of the problems of this system were that people were limited by the network of acquaintances they had, also people tend to hang out in the same circle making it difficult to have two distributors in the same group.

What is social media?

With the arrival of the internet and social  media it is now possible to reach out to people way beyond your normal social group, broadening your networking potential bringing high web traffic and greater lead generation possibilities.

Of course anyone can set themselves up as the “company” all you need is a product to market and a system to market with

So the bottom line is, if you have a product or a service already, why not offer it as a multi-level or even a sigle level business importunity? Websites and blogs are not so difficult to build these days and thousands of people are looking for business opportunities in the work from home environment. Everyone is using Facebook which is a perfect place to build a network, imagine if you had ten people using their networks to market your product?

I hope you enjoyed my post and feel free to comment or bookmark me.


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Thesis Mechanic & Site Construction Engineer. Tom Is an enthusiastic Wordpress Thesis designer and web developer. loves coding and playing Gypsy Jazz Guitar!

  • Jaime Muzacz May 11, 2012, 8:46 am

    Hello. impressive job. I did not expect this. This is a impressive story. Thanks!

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