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.

Guest Writer
min read
Opinions expressed by Entrepreneur contributors are their own.
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

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