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Network marketing is a distributor-network business model that is popular with people looking for part-time, flexible business opportunities that require little financial investment up front ranging from a few hundred to thousands of dollars and often calls upon the individual to recruit additional sales reps.
How it works: The income model is based on the principle of an individual becoming a sales rep for a network company and purchasing sample products for a cost ranging from a few hundred to thousands of dollars. In turn, the sales rep uses these samples to sell within his or her network of contacts as well as recruit additional sales reps who will, in turn, recruit more sales reps within their networks. These recruits become part of someone’s “downline” and generate sales income for the sales rep. Consequently, network marketing is sometimes referred to as multi-level marketing (MLM), because payouts are given at more than one level.
Network companies: Some well-known companies that use the network marketing model include Avon, Mary Kay Cosmetics and Tupperware.