Confused About What Network Marketing Is?

Network marketing his also called MLM or Multi-Level Marketing which has mostly to do with the way it pays you.

In regular affiliate marketing you are selling a product and get a commission from the sale. Pretty straight forward. One sale, one commission. There are programs called "continuity programs" where you get a commission from each sale as long as they continue to pay for the product. This is mostly for coaching, mentoring, and membership type programs. These are actually what you want to promote as an affiliate product since it builds up a residual income.

In any marketing, residual income is the ultimate goal right? Money coming in from work you did maybe months or years ago. It will also build as you get more sales. Unfortunately, there is a problem with most continuity programs in the fact the people who join usually only stay, on average, around 6 months.

Even with this fact, these type of programs are what affiliates should be selling to build an income. Of course there are going to be other products you will get one-time commissions from too as an affiliate.

The real difference from this affiliate model and network marketing is you get a commission from not only your initial sale, but from the sales of other people you bring in. This is usually a decreasing amount for the level of the sale.

For example, you bring in Joe and get a commission, Joe brings in Sally and not only does Joe get a commission, but so do you. Sally bring in Mary and Sally, Joe, and you get a commission. It is like having a huge sales force where you get a small bit from each sale of the people you have as customers. Each person who comes in will pay monthly to be in the program and be able to sell the product.

Network marketing is like a continuity program on steroids. As long as the people you bring in make money, they will continue to pay each month to be in the program. This is why both Donald trump and Robert Kiyosaki have promoted network marketing companies. They have historically produced many millionaires.

The product is the most important factor in a network marketing company. Even if the pay plan is phenomenal, if the product is crap you won't make money or keep people. There are a lot of people who join network marketing companies with the lure of becoming millionaires. If the product is not one you would use and at a fair price, it could cost you a lot more money to be part of the company than you can make.

Most products are ones you could get elsewhere for less money. The higher price is positioned to pay for the network marketing part of it. You can't get stars in your eyes when researching a company and not take this into account. In all of them is a "break even point" where your monthly payment is covered by your commissions. If this number is high, you may not make it to that point.

One big mistake most people make is to stop doing anything when they reach this point. They think things will get better from there and try to live off of the residuals their team produce. The truth is the people under you will follow your example and do the same thing and your network will die.

the other thing to take into consideration is how big is the market for the product. If it is a product with limited use and a small market you will be in competition with your own team for people to make it work.

The truth is it is no different from any other business and requires a lot of hard work and the ability to get customers. Becoming a millionaire is not an easy process or everyone would be a millionaire.

The best time to get involved in a network marketing company is when they are new. This seems counter intuitive for most people. If a company is touted as producing X amount of millionaires, if you wait too long you may be left out. If the product is in a volatile market, things may change beyond your control.

I once got invoked with a cell phone network marketing company. It was ahead of the curve and was a newer company. I thought it would be "the one". Unfortunately, the service was marginal in my area and they have since had to change everything when the major cell carriers changed their model to match.

Hopefully I have answered a few question about network marketing and have given you a few pointers you can use when making a decision about whether they are a viable option for you.