Click to Print

I'm just getting into network marketing with a truly incredible product. I would like a definition of what network marketing is and how it works.

I need to understand what network marketing is before launching so that I can fit the concept to my marketing.
Brad Sugars answered July 16, 2008
URL: http://www.entrepreneur.com/answer/221520
Network marketing is simply a distribution system for products or services, where you are paid to both sell the product/service and to recruit more direct sellers.

Short-term income is made from the sale of the product/service. Long-term income is made from recruitment.

In retail, some companies have a great product and they can afford to make it, package it, house it, advertise it and sell it at the point of purchase.

Other times, companies have a great product--without a distribution system in place. In that case, the retailer will use network marketing as the distribution system.

Know that network marketing is like any other type of business--profits depend on number of leads, conversion rates and profit margins. The only difference is that you are also looking to recruit others into the organization. Your long-term income will also depend on leads, how many of those prospects you convert to distributors and the percentage payout for your "downline."

All the best.
Brad Sugars

Brad Sugars is the founder and chairman of ActionCOACH. As an entrepreneur, author and business coach, he has owned and operated more than two dozen companies including his main company, ActionCOACH, which has more than 1,000 offices in 34 countries.