Starting a Business

The Pros and Cons of Network Marketing

Is network marketing all it's cracked up to be?
Magazine Contributor
3 min read

This story appears in the April 2002 issue of Subscribe »

Q: What do you think of network marketing, especially over the Internet?

A: Network marketing, also known as multilevel marketing, or MLM, appeals to people for the following reasons:

  1. Most people find the business opportunity an alluring way to make ends meet, particularly when earnings are cut back, they lose a job or they're trying to launch a new business.
  2. Some people are so turned on by a product (like one that enabled them to lose weight or restore their health) that they want to share it with others.
  3. Some people imagine MLM as a quick and low-cost way to get rich.

The fact is, few people get rich; some make a part-time income. Those who do best work hard, stick with it, and aren't turned off by the evangelism involved in getting others to try something or join their selling organization, which is called a downline.

The internet does play a role in network marketing, but the most recent statistics from the Direct Selling Association indicate only 5.5 percent of direct sales are made over the Internet. Almost 80 percent of sales are made face-to-face, the customary way of making direct sales and recruiting people into a downline.

The internet can be useful in that you can create a Web site where you support your downline and attract buyers looking for your products and others looking for a business opportunity. You will need to use a domain name that does not duplicate or infringe upon the name of the network marketing company.

Other network marketers use the internet to attract a downline in still another way. Your first thought might be junk e-mail, but it's not used by those who are most successful. We're talking about network marketers who actively participate in online forums or discussion groups, usually related to the product they are selling, where they answer questions and offer advice that earns people's trust and interest.

One less obvious benefit of becoming a network marketer is that you can learn the skills needed to operate a business, such as selling, managing time and keeping yourself motivated in the face of rejection. In this sense, network marketing can be a training experience with the help of your upline.

Network marketing does have its share of critics; a comprehensive site is Your safest bet, as with any opportunity, is to thoroughly research any network marketing company you're considering.

Next Step: Get help in researching and selecting a network marketing company in our Biz Opp Zone.

Learn More

Read these articles for the real deal on MLM:

  1. Benefits of the Replicating Website
  2. Building Your MLM Business
  3. Is MLM Just a Scam?
  4. Work From Home--Without Getting Scammed

Paul and Sarah Edwards' most recent book is Changing Directions Without Losing Your Way. Send them your startup questions at or through us at Entrepreneur.

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