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The following article was published in our article directory on June 11, 2018.
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Article Category: Business
Author Name: Michael Coe
Network marketing has a mixed and diverse reputation. On one hand, people feel that any form of network marketing is just an easy way for malicious people to get easy money from you. On the other hand, people, especially ones already in the industry, feel that network marketing is God-sent industry that's helping them profit.
And both perceptions of people about network marketing are true and grounded. This industry is profitable for hardworking, sociable, and dedicated people. This network building industry is also susceptible to abuse and malicious activities.
One of the biggest abuses in network marketing is pyramiding or pyramid schemes. And people are vulnerable to this abuse because they lack knowledge on how the industry works for recruits and customers. For you not to be one of the victims of such abuse, here are some simple explanations of the differences between network marketing and pyramid schemes.
Network Marketing
Network marketing primarily relies on distribution networks in order to operate and gain profit. This basically means that the movement of products dictates its business model and profitability. The products move from the manufacturer, to storehouses, to offices, to distributors, to recruits, and then to the customer.
Two terms that you should know in network marketing are one-on-one and person-to-person marketing. This is how a product is marketed and sold. The distributor often visits customers' homes one by one to sell and market products. Think Herbalife, Amway, Mary Kay, and Avon.
If you're at the top of the network marketing chain, you will profit a lot and experience less expenses. Most network marketers are not paid by the hour and they only earn through commissions. This means that if your people are not performing, you will not pay them anything. If they are performing, you only need to provide them their earned commission.
The greatest advantage in network marketing is that you can start or stop working anytime. You work at your own pace. And for you to enter the network marketing business, you only need to pay a small amount. That small amount can easily lead to bigger returns if you focus on selling.
Another way to profit is to recruit people under you. When you recruit them, they will become your downline. You get a commission for every sale that they make.
Pyramid Schemes
First and foremost, network marketing and multilevel marketing are not synonymous with pyramid schemes. Mark Kay and Avon are perfect examples of network marketing businesses.
The biggest differences between network marketing and pyramid scheming is how the company rewards its recruits when they recruit. If the company rewards its people more when they are able to get more recruits instead of selling products, then the business becomes more of a pyramid scheme.
In a nutshell: Network marketing focuses on increasing your network of contacts so you can sell more, while pyramid schemes are more focused on extending your network of contacts, period. Usually, the products are just a "front" for the latter.
Keywords: Network Marketing, Network Marketing Strategies, Network Marketing Business, Network Building
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