Network marketing, also known as multi-level marketing (MLM), is a business model that relies on independent representatives to sell products or services directly to consumers, often from their homes. The participants in this network are encouraged to recruit others to join the network and sell products, creating a pyramid-like structure. The key characteristics of network marketing include:
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Direct Sales: Network marketing organizations market and sell their products directly and dont make use of any well-defined channel of distribution. The responsibility to sell the products is transferred to the non-employed individuals (the participants) who get the commission every time they make a sale.
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Commission-based: This is a commission-based network where participants (not employees) are paid commissions to perform a specific task.
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Accountability: Everyone is accountable only to themselves. The more they sell, the more they earn.
Examples of network marketing companies include Amway, Tupperware, and Avon Products. However, it is important to note that while some network marketing companies are legitimate, others may be pyramid schemes that try to make money by selling expensive training materials to new hires rather than getting them to sell a product. Therefore, people interested in this type of marketing should be aware of network marketing scams and research them before enrolling.
