Overtime I've observed and noticed with a keen sense of intrigue and amusement, the reaction of people when the word Network Marketing is mentioned. Some cringe at the very thought of it. Some think it is immoral. Some think it is not to be done by someone who has a sense of purpose. Others are indifferent. Some have ventured into it and have bitter tales to tale whether by omission or commission. A good number however, have tested the waters and have never looked back. Its been clear sailing for these ones.

The question is, what exactly is network marketing? What are the real facts behind network marketing? Should it be something we should consider? If yes, why are so many apprehensive about it?

Over the next few weeks, assuming the bots don't freeze my posts, I'm going to be dissecting the business of Network Marketing. I'm going to be exposing the secrets behind it and why does who fail, fail.

Of-course I would be expecting questions, criticisms, objections and contributions from everyone. I would however implore that we try not to derail the post.

First off! Lets start with defining Network Marketing. What is Network marketing? Network Marketing (I'll use NM from this point forward) is a marketing strategy in which the sales force is compensated not only for sales they personally generate, but also for the sales of the other salespeople that they recruit. This recruited sales force is referred to as the participant's "down-line", and can provide multiple levels of compensation. That came from Wikipedia.

Having defined that, the next obvious question is "Is it Legal?" Well, the answer to that question depends on a number of things. First of all and most importantly, does the Company in question pay commissions just for recruiting new distributors? If the answer to that question is Yes, then what you probably have on your hands is a Pyramid Scheme. Steer clear of this type of Companies.

Now this brings us to very first Myth of Network Marketing:

MYTH: Network Marketing is a Pyramid Scheme!
This happens to be the most common of all Myths. It also happens to be the myth that is most easily broke. What is a Pyramid Scheme? It is a non-sustainable business model that involves promising participants payment or services, primarily for enrolling other people into the scheme, rather than supplying any real investment or sale of products or services to the public. A typical pyramid scheme combines a fake yet seemingly credible business with a simple-to-understand yet sophisticated-sounding money-making formula which is used for profit. The essential idea is that a "con artist" Mr. X, makes only one payment. To start earning, Mr. X has to recruit others like him who will also make one payment each. Mr. X gets paid out of receipts from those new recruits. They then go on to recruit others. As each new recruit makes a payment, Mr. X gets a cut. He is thus promised exponential benefits as the "business" expands.(Source Wikipedia)

TRUE FACT
Network Marketing as I have mentioned earlier is “driven by sales.” Network marketing companies have been responsible for the sale of billions worth of goods and services. In-fact some of you or most of you have at one time on the other used products from Network Marketing Companies. Whatever bonus or commissions are paid to distributors are based purely on the volume his network is able to push not just simple the number of distributors. In-fact the more distributors he has the more volume he is able to push.

So for the sake of emphasis here True Network Marketing is NOT a Pyramid Scheme.

Another very common aspect about network marketing is that they tell you that you can make an unlimited amount of money. Well, while that in itself is not wrong - in fact it is very correct, there are things you should know.

The one thing that anyone who knows much about network marketing will tell you is that there truly is unlimited earning potential. Some people make a little extra money, and others make a lot. Just like anything worth doing, it all depends on what you put in.

Another thing that people in the know will tell you is that you can start to earn money in network marketing from the very beginning, and that as you learn more and more, you’ll earn more and more. You don’t need to start out with “an education”. You get that as you go.

This concept is in contrast to the idea of going off to college, sometimes for several years and to the tune of thousands upon thousands of dollars. I’m not saying you shouldn’t go to college or that a college education isn’t good. What I’m saying is that with network marketing, you’re learning the business at the same time that you’re earning from the business. With college, you learn your field, and then try to break into it with your diploma in hand.

Author and Speaker Jim Rohn said something very wise: “Formal education will earn you a living. Self education will earn you a fortune”. Jim Rohn, as usual, is making complete sense.