What Is Network Marketing/MLM?

It is a direct selling method in which independent-agents serve as distributors of goods and services, and are encouraged to build and manage their own sales force by recruiting and training other independent agents. In this method, a commission is earned on the agent’s own sales revenue, as well as on the sales revenue of the sales-force recruited by the agent and his or her recruits (called downline). Also called multilevel marketing (MLM), cellular marketing, or by other such names, it is a multi-billion dollar worldwide industry that distributes practically any portable item, although restricted or banned in several countries due to its history as a vehicle for consumer fraud.

Read more: http://www.businessdictionary.com/definition/network-marketing.html

direct sales

Network marketing, also known as multi-level marketing, is a business model that involves a pyramid structured network of people who sell a company’s products. The participants in this network are usually remunerated on a commission basis. That is, people in this network get commission every time they perform the specified task, like –

  • Make the sale of a product.
  • Their recruits make a sale of the product.

In simple words, this model involves a pyramid structure of non-salaried participants who get paid whenever they or a person below them in the pyramid makes a sale.

Whereas network marketing involves multiplying efforts by selling products and where the participants can earn the sale of the product, not the recruiting. This is a win-win situation where the users get what they want and participants earn a commission.

Pyramide vs MLM

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