What is Network Marketing Or MLM?

A Look at the Network Marketing Business Model Vs the Franchise

By M Klingler

The Network Marketing Business Model is widely known. It's a part of our lives.

This illustration shows just how far it's reached...

Most people could care less about a company's model.

In fact, if you asked a group of people what a business model is, most of them would probably scratch their head raw trying to come up with a definition.

But mention the term Network Marketing to that same group and, odds are, almost immediately they'll describe their understanding of it--regardless of whether or not their understanding is based on fact or fiction.

It is likely the most misunderstood, misrepresented and mismanaged business model around. But at its core, the Network Marketing model is an effective, legitimate and accessible form of distribution.

At its heart, it provides the ability to deliver a product to consumers. Without this ability, it's just a scam. It's that simple. The product serves as the foundation upon which all success is built. It's where the rubber meets the road. All retail business models are driven by products and services, and the Networking model is no different.

Consumers are attracted to products for a variety of reasons, need, quality, cost, availability and value to name just a few. The model stands apart from other distribution methods in its ability to bring value to the consumer. Most retail distribution centers provide their products or services by means of mass distribution. Hoards of people shop the big box outlets every day en masse with little or no regard to the lack of personal attention they are getting. The days of the corner community market are long gone in most parts of the world.

But the Networking model provides the same kinds of products or services that the big box outlets do. Often with products of higher quality that are delivered with a personal, corner community market touch of supplier consumer interaction. Personalized, quality service is typically a hallmark of a successful Network Marketing business.

Another unique characteristic of a Network Marketing business is the ability for nearly anyone to build the business. This characteristic is also the most misunderstood and historically abused concept. When people have misgivings about Network Marketing, it is rarely due to the products or services, but rather due to misconceptions about techniques, tactics and outcomes associated with the building of the business itself. This is common BECAUSE nearly anyone can be involved with it.

Common terms of the model are 'associates,' 'uplines',' crosslines', and 'downlines.'

Without exception, each new associate is introduced and sponsored into the business through what will become their 'upline.'

'Uplines' have responsibilities to their new 'downlines' regarding training and advice. They act as mentors, advisors and leaders to their 'downlines'. In return, uplines receive compensation in some proportion to the volume of product that their 'downlines' sell, and it is in this structure that legitimate Network Marketing business opportunities differ from scams and 'come-ons' called 'pyramid' schemes.

Legitimate Network Marketing businesses allow 'uplines' to make revenue from their 'downlines' volume of sales, not by the mere fact of recruiting new 'downlines.'

In fact, if the income cornerstone of any Network Marketing business is recruiting rather than product sales, then it's not legitimate and could be a 'pyramid' scheme.

Network Marketing is a business where distributors participate in the direct selling of a product to consumers. The model also includes methods to increase a participant's income by building their business. Building includes recruiting downlines who also sell the Network Marketing product.

The Network Marketing business model is known throughout the world and employs millions of people with each of them having different and varying degrees of financial success.

(I acknowledge the effort of the original author of this article, unknown to me).