NETWORK MARKETING
🌐 What is Network Marketing?
Network Marketing (also called Multi-Level Marketing – MLM) is a business model where a company sells its products or services directly to customers through independent distributors, instead of using traditional retail stores.
In this system:
1. A person (distributor/associate/agent) joins the company.
2. They sell products directly to people.
3. They also recruit new distributors into the company.
4. They earn commission from:
Their own product sales.
The sales made by the distributors they recruited (called their “downline”).
It is called "multi-level" because income can come from many levels of recruits below you.
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🔑 Key Features of Network Marketing
Direct Selling: Products are sold face-to-face or online, not through shops.
Recruitment: Distributors expand the network by bringing in others.
Commission-based Earnings: No fixed salary—earnings depend on sales and team performance.
Product Focus: Usually involves health, wellness, cosmetics, household, or lifestyle products.
Levels of Income: The bigger your team and their sales, the higher your potential earnings.
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⚙️ How It Works (Step-by-Step)
1. Join the Company
Pay a small joining fee or buy a starter kit of products.
2. Use & Sell Products
You use the company’s products and sell them to others.
Example: Cosmetics, health supplements, home products, etc.
3. Recruit Others
You introduce friends, family, or others to join as distributors.
4. Build a Network (Downline)
Each new distributor also sells and recruits.
Their sales add to your earnings.
5. Earn Commission
Direct commission = Your own sales.
Indirect commission = Percentage of sales from your downline.
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📌 Example
Suppose you join a network marketing company selling herbal products.
You sell ₹10,000 worth of products → you earn 20% = ₹2,000.
You recruit 5 people, each selling ₹10,000.
You get 5–10% commission from each person’s sales (say ₹500 each).
So, you earn your ₹2,000 + ₹2,500 = ₹4,500 total.
If those 5 recruit more, your earnings increase as the network grows.
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✅ Advantages
1. Low Investment – Usually small joining cost compared to starting a shop.
2. Work Flexibility – Can work part-time or full-time, from home.
3. Unlimited Income Potential – The bigger the network, the higher the earnings.
4. Skill Development – Improves communication, sales, and leadership skills.
5. Product Discounts – Distributors often get products cheaper.
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❌ Disadvantages
1. No Guaranteed Income – Success depends on sales and recruitment.
2. Requires Strong Network – Hard for people with small social circles.
3. Time-Consuming – Building a big team takes years.
4. Negative Reputation – Many people confuse MLM with scams or pyramid schemes.
5. Risk of Loss – If you can’t sell, products may remain unsold.
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⚖️ Network Marketing vs Pyramid Scheme
Network Marketing (Legal): Focuses on selling real products/services.
Pyramid Scheme (Illegal): Focuses only on recruiting people without actual product sales.
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📚 Examples of Popular Network Marketing Companies
Amway
Herbalife
Oriflame
Avon
Tupperware
Vestige