Network Marketing in an Internet World

In a fast changing world and difficult economic scenarios, it is but normal that individuals will turn towards innovation, fortitude and creativity in order to ramp up or bolster their earnings. The time for that though, as we all know, is past. No longer can individuals supplement earnings by taking on extra work. With the labor markets, worldwide, in depression, millions of people have to find themselves a primary source of income in order to meet the most basic expenses. And data coming out of nations around the world (at one time heralded as economic juggernauts that would help drive the world past the banking crisis) shows that even India and China are beginning to reel under the impacts of European and USA economic issues.

So the outlook isn’t rosy, but that doesn’t mean the end of the world or a shutdown of economic activity. It does however; necessitate a need to look at avenues of income generation from a fresh perspective. And this article intends to discuss a specific route of employment and income creation, its associated pitfalls, the overwhelming misinformation about the work genre, the competitive advantages the industry enjoys and how the Internet is helping push revenues up higher than ever before. Welcome to the world of Network Marketing in the Internet Era.

Network Marketing – An intro

Network Marketing, also called Referral Marketing or MLM (Multilevel Marketing) is a business model where employees are hired as marketers for a business or product, and are rewarded on both, the sales they generate, as well as the sales invoiced by the staff they subsequently hire. Essentially each member has to sell products as well as recruit new sales people in order to reach the highest earning potential. (For this article, MLM and Network Marketing will be used interchangeably)

So for example you sell home insurance for AIG (just an example), and you process 3 policies successfully, you get a share/commission of the sale value.

Now, you can hire more staff to help you sell these policies, and when they do, you get a percentage of the total policy value sold by the people You hire as a reward for increasing the sales force and generating revenues for the firm. In marketing speak, your recruits will be referred to as Your down line, that is to say this stream of income was started by you, making you eligible for higher benefits.

Some people confuse MLM and direct selling. While it is true that MLM or network marketing is heavily reliant on customer referrals, word of mouth promotions and direct selling techniques, MLM is just one form of direct selling.

Network Marketing Criticism

MLM or network marketing has come under the scanner for practices that opponents say are unethical, designed to serve a handful of people, and can rupture personal relationships, but they continue to thrive. In fact some of the world’s most successful firms including Avon and Amway are examples of how well MLM can work for representatives and the parent entity. The issue though, is that many critics vehemently argue that Amway is the best example of Pyramid Marketing schemes that serve the interest of the parent firm and not its representatives.

And here’s the issue. People tend to conflate Pyramid Schemes with Network Marketing which, widespread as it is, is also misleading. Pyramid Schemes stand out from MLM or Network Marketing in that they tend to require entry fees and promise exaggerated returns without any grounding in fact or performance records.

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