What Is Network Marketing?

Network marketing appeals to people with high energy and strong sales skills, who can build a profitable business with a modest investment.A network marketing business can be a single-tier program, whereby you sell the products or, multi-tier where you also recruit additional sales people Beware of network marketing companies that create many tiers of salespeople or require you to purchase expensive products or training material up-front -- and thoroughly research the company before you join.How Network Marketing WorksNetwork 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 commissionon 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.