Network Marketing

What Is Network Marketing?

Network marketing is a business model that depends on person-to-person sales by independent representatives, often working from home. A network marketing business may require you to build a network of business partners or salespeople to assist with lead generation and closing sales.

Network marketing is a type of business opportunity that is very popular with people looking for part-time, flexible businesses. Some of the best-known companies in America, including Avon, Mary Kay Cosmetics, and Tupperware, fall under the network marketing umbrella.

Network marketing programs feature a low upfront investment–usually only a few hundred dollars for the purchase of a product sample kit–and the opportunity to sell a product line directly to a friend, family, and other personal contacts. Most network marketing programs also ask participants to recruit other sales representatives. The recruits constitute a rep’s “downline,” and their sales generate income for those above them in the program.

Things can get sticky when a network marketing network compensates participants primarily for recruiting others rather than for selling the company’s products or services. A network marketing system in which most of the revenue comes from recruitment may be considered an illegal pyramid scheme.

Since network marketing programs are usually exempt from business opportunity regulation and aren’t defined as franchises under state and federal franchise laws, you’ll need to do your investigation before investing any money.


  • Network marketing appeals to people with high energy and strong sales skills, who can build a profitable business with a modest investment.
  • A network marketing business can be a single-tier program, whereby you sell the products, or, multi-tier where you also recruit additional salespeople.
  • Beware of network marketing companies that create many tiers of salespeople or require you to purchase expensive products or training material up-front — and thoroughly research the company before you

How does Network Marketing Works?

You’ll start your network marketing business by signing up with a reputable company – some of today’s most popular are Scentsy, Younique Cosmetics, and Young Living Essential Oils. You’ll typically receive a “starter kit” with promotional materials, supplies, and other items you’ll need to get started. At first, you’ll work underneath a sponsor who can show you the ropes, provide education and give you tips about the industry. Once you know everything there is to know about your product, you’re ready to start selling.

Most network marketing in business takes place face-to-face. All you need to do is talk to people! Let your passion shine through and use your communication skills to build rapport and get people interested in your product. Here’s where the “network” part comes in: When you sign someone up, they become part of your team. You earn commission on their sales and on sales of any people that they sign up with – and so on. The more passionate people you can find, the better.

Types of network marketing

Network marketing can be broken down into three essential categories. These categories are similar in that they call upon individuals to use their networks to run their businesses. Through these networks, individuals make sales or recruit others to sell products.

Network marketing, although similar, is not to be confused with influencer marketing.

1. Direct marketing

This single-tier marketing system requires an individual to sign up for a program to sell a product or service. Individuals who sign up for these programs do not need to recruit other distributors and are paid only for the direct sales they make.

Direct marketing is the most immediate form of sales. Find a product you like and get your friends and family to buy it. A few top companies involved in this type of network marketing are Mary Kay cosmetics, Avon cosmetics, and Pampered Chef kitchen supplies.

2. Affiliate marketing

A newer aspect of network marketing is using online affiliate marketing programs. Website owners and bloggers integrate links to specific products on their platforms. When people click on those links and purchase products, the website owner has rewarded a referral fee. This provides customers with access to a trusted site where they can immediately purchase the products being advertised.

It’s important for those using affiliate links to be transparent about that. A simple disclaimer at the bottom of a blog post fits this purpose and lets your audience know that you’re making money from these links. Amazon’s affiliate program is one of the most well-known, but Partnerize and Google’s Affiliate Network are also options.

Those are thousands of affiliate programs out there for both brands and individual individuals can leverage. Be sure to research the most high-paying affiliate programs out there before you join a program.

3. Multi-level marketing

Multi-level marketing (MLM) is a distribution-based marketing network that includes direct sales and a downline of distributors. These home businesses tend to get a lot of bad press for their similarity to pyramid schemes. In reality, they have one key difference. Where pyramid schemes require people to invest in a false promise of wealth, MLM organizations sell real products or services that distributors believe in.

Many MLM companies provide a healthy infrastructure and great training, plus extra rewards for high performers. Scentsy, Herbalife, and Advocare are some well-known players in the MLM field.

There are also many MLM software tools to help multi-level marketing organizations run efficiently.

How to succeed in Network Marketing

Now that you know what network marketing is, it’s time to get started. Running a successful network marketing business doesn’t have to be time-consuming or complicated. You can create a breakthrough with a few simple steps – change your story, change your strategy and the rest will follow.

Step-1 Find Your Passion

According to Tony, network marketing is about “picking the right company and realizing you’re a value creator. Whatever you enjoy the most, you’ll do the most.”

Your love and passion for a product or service drive you to properly tell its story, and that’s how you create value. Consider what products have improved your life in the past and what you want to learn more about. Is it supplements? Home décor? Cosmetics? When you choose something you have a deep interest in, that passion will shine through.

There’s another benefit to choosing something you love: more sales. Today’s consumer is bombarded with marketing, branding, and advertising. They’re on high alert and know when they are being “sold” to. If you’re just doing this for the money, they will sense it right away – and react accordingly. The best network marketing entrepreneurs figure out how to combine their true passion with their ability to make money. What is network marketing at its most successful? It’s your chance to make a difference in the world – and make money while you’re at it.

Step.2 Choose the right company

Passion is the most essential ingredient to successful network marketing – and choosing the right company that matches your passion is equally vital. You’ll need to research carefully to locate a business whose message, story, and products or services capture your image and make you want to join their ranks. The network marketing business you choose must also have the following traits:

At least five years in operation:

Fifty percent of businesses fail within the first year, and 80% fail within five years. Signing up with a business that hasn’t had its doors open for at least that long is an additional risk.

Steady cash flow:

Network marketing companies with nothing to hide disclose their financial statements. Take the time to read the statements and ensure the business is well-capitalized.

Professional development:

Make sure the business provides the coaching, technology, and support you need and will send you to any conferences and meetings required to advance your training.

Established customer base:

Sign on with an established company that already has raving fan customers. An existing customer base allows a network marketing business to shift gears as necessary.

Step.3 Put your resources to work

Succeeding in network marketing is largely dependent on how many resources you can cultivate. Start by discovering how you can leverage things you already have – connections, education, and achievements – into business success. You may already have dozens of relationships that you can capitalize on to grow your network.

As you consider turning to these people, remember that you want to add value to their lives with your product or service. Don’t pitch everyone in your phone book just because you can. Remember that the secret to living is giving. Those who thrive in network marketing understand that it’s not about selling – it’s about using the opportunity to cultivate an abundance mindset and improve the lives of others.

Step.4 Manage your mindset

In network marketing, the way you think about yourself matters far more than your tactics. You might have plenty of strategies to deploy, but if you’re not in the right mindset, you won’t be able to execute them. However, even if you have no business experience, you can succeed in network marketing if you create the right mindset.

Before you even start network marketing, you need to learn how to cultivate positive emotions and control your reactions to situations. Choose how you feel rather than reacting to a situation. When you do this, life happens for you instead of to you, putting you firmly in the driver’s seat. You will face plenty of challenges as you learn about network marketing, and viewing each setback as something you can overcome and learn from will help you move on from temporary disappointments.

Tips to Achieve Success in Network Marketing

1. Be Serious

Don’t treat it like a joke. Your business is your soul and not a mere hobby. It starts with the right mindset and if you’re willing to succeed, you have to be willing to make sacrifices. That means spending more time investing in yourself, networking with your industry peers, studying up on the latest trends, and applying them. Because knowledge is useless without application.

2. Don’t Treat Your Friends Like Business Prospects

Your friends could turn out to be your most valuable inputs or customers, but that’s a natural process and not one you want to force. If your gut tells you not to sell a product to a friend or pitch it, don’t do it. It only makes things worse and they can tell. Use your judgment and don’t blindly follow what your network marketing class tells you. Learn and tweak what you learn in a way that works for you.

3. Use Social Media

Social Media is like your ultimate marketing vehicle in cyberspace and a proven kind of network marketing success formula. In real life, finding new team members to recruit can be difficult. But with social media, you could work your way towards building the dream team you want. Invest in paid advertising and actively connect with your audience so that you deliver value. Start with any two platforms and stick to mastering them – like Facebook and LinkedIn. Because you don’t want to be a jack of all trades and master of none when it comes to the digital side of your network marketing.

4. Invest in a Mentor

Investing in a mentor is a big YES. You want someone who has been there, done that, and is still growing. Why? Because when you’re first starting out, there are a lot of things you’ll have to figure out. Mentors know that and they also know what it takes to cut through the clutter and get stuff done. It’s like achieving 80% results with 20% productive and focused effort. Want that? Get a mentor.

5. Have a Growth Mindset

We’ve talked about mindset above but here’s the difference with this one – it’s not just about being serious but having a growth mentality. What do we mean? You have to be positive even if the odds are stacked against you. You have to believe in yourself, not be afraid of failing, and keep pushing until you get to the point you want. Most people fail and give up when they’re on a losing streak. Be different and you’ll achieve what you want, is what we say.

6. Be Consistent

Consistency is the key to discipline and getting the results you want. You can be successful as a network marketer if you’re successful as a human being. There are many things out there that you have to learn about. But that won’t happen if you don’t stay consistent. The more consistency, the more results, and the more results, the more doors open up for you.

7. Use Automation Tools

From scheduling posts to sending newsletters, reminders, and other MLM strategies for network marketing success, use automation tools in your network marketing efforts to free up time and get really productive. These days, things like Artificial Intelligence, chatbots, and social handle management suites make communicating with your prospects a lot easier. You’ll be saving time, making more sales, and the best part? You’ll be loving every minute of it.

8. Do Your Research

When you’re getting into network marketing, you have to make sure you sell products you are absolutely passionate about. Tie up with brands who have similar interests as you and do your research such as looking into the company’s compensation schemes.

9. Be Real

When you’re marketing your products or services, make sure you be real and stay real. Be genuine to your customers about what you’re offering and never oversell. Nothing turns away people from you when you advertise flashily or look desperate. Explain the pros and cons, show the good and the bad, and let people decide.

10. Prepare to Sponsor

While you let new recruits join in on the action, you don’t want to invite a huge crowd. Sponsor a select few who are trustworthy, mentor and train them in your products and services, and give them the environment to grow and thrive in.

The Advantages and Disadvantages of Network Marketing

There is some stigma attached to the networking marketing business, especially those with multiple tiers, which can be characterized as pyramid schemes—that is, the salespeople in the top tier can make impressive amounts of money on commissions from the tiers below them. The people on the lower tiers will earn much less. The company makes money by selling expensive starter kits to new recruits.

The appeal of network marketing is that an individual with a lot of energy and good sales skills can create a profitable business with a modest investment.

A good rule of thumb, according to the Federal Trade Commission (FCC), is that single-tier network marketing operations tend to be more reputable than multi-tier schemes, in which people make money based on the number of distributors they recruit.

Some reputable examples of single-tier network marketing operations include Avon Products, Mary Kay, and Excel Communications.