Welcome to my world!
As a business person, it is important to objectively explore and research options that will help your business portfolio. For those in the home-based business industry, there is a large segment engaged in network marketing, otherwise known as MLM. This is clearly separate from pyramid schemes. which depended on inflow of money from the recent recruits to pay out to the earlier entrants, in other words, a Ponzi scheme.
In my opinion, the main reason to join a network marketing company is because the business opportunity is sound. Some people join because they love the product. Underlying all this is the relationships within the network. The opportunity will usually be introduced to to you by someone you know, like and trust, hence the name network marketing. There are over 60 million network marketers worldwide, of which there were 15.6 million in the US in 2011. Worldwide sales are over $100 billion in this rapidly expanding industry, estimated to involve 50% of US households by 2015. Almost 25% of the companies are in the wellness niche.
In network marketing, you market the product directly to your network, instead of the item being sold from store shelves. The person who sponsored you is called your up line and the people you sponsor are in your downline.
Your income (compensation) comes in varying proportions from your direct sales of the product, including autoships, as well as from the sales and autoships from your downline and a portion of their initial buy-in. The autoship is a monthly automatic shipment of selected products from your company. There is usually a minimum amount to remain an active distributor. You will also be assembling your own team of distributors – critical mass is considered to be around 1000, after which, sponsoring becomes almost effortless.
It is important to note that network marketing has become extremely popular due to the relatively low buy-in compared to investing on other businesses or franchises. The initial buy-in usually comprises of a starter package, including marketing materials and often your own website with a back office, to track the essentials of your business including your team. You also get a selection of of your companies products for yourself, as samples, and to start off your sales. Because of the relatively low buy-in, a significant number do not treat it as a business and tend not to work as hard as is required to make it work, resulting in a relatively high attrition rate. You will find people jumping from one company to the other, instead of focusing on one or two well selected companies and doing the necessary work.
Do your research first – and make a BUSINESS decision!