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Oh No - Not Another Network Marketing Scam
It's like the words network marketing and scam automatically go together.
They can't seem to say one without saying the other.
If you have that problem too, then let me give you a little ammunition.
According to "Entrepreneur.
com" the well respected online magazine, network marketing isn't a scam or a pyramid scheme.
They explain that pyramids are programs "similar to chain letters where people just invest money based on the promise that other people will put in money that will filtrate back to them and somehow, they'll get rich.
" Any type of income plan that's based on an exchange of money without a valid and legitimate product or service is illegal.
" It's just a money game and has no real basis of commerce.
Network marketing, also known as MLM or multi-level marketing is a legitimate business model.
It's not a get-rich-quick scheme and it's not based on luck, divination, tarot or the phases of the moon.
Some people do make large amount of money in a small amount of time.
But this comes from following some very basic and dynamic marketing principles.
So what is network marketing.
It is a business model where goods and services are distributed through a line or network of individuals who are distributors for the company who has the rights to distribute that product.
Each time a product is sold, every qualified distributor along the line from the customer to the manufacturer receives a small commission for the sale.
Notice that I said qualified distributor.
Every company has regulations that a distributor must meet in order to qualify for commissions.
Also I said small commission.
Because there could be a number of qualified distributors each one only receives a portion of the total commission paid out.
Most companies pay no more than 50% in total commissions.
Notice that the line between the manufacturer and the customer could contain qualified distributors that don't even know the customer, yet they still get a commission.
This is the real key to network marketing.
It's called leverage.
Every distributor in the line received benefit from the person who sold the product.
A person in network marketing leverages their time and increases the number of hours of total work effort through which they can be paid by sponsoring other people and earning a small commission each time that person either buys or sells product.
Paul Getty, creator of one of the world's greatest fortunes, said "I would rather make 1 percent on the efforts of 100 people than 100 percent on my own efforts.
" This key principle is the basis of network marketing.
All great fortunes are made by leveraging time and money.