What is Network Marketing?

Network marketing is a business model in which individuals (often called distributors, consultants, or independent representatives) sell products or services directly to consumers, often through word-of-mouth or personal connections. It typically involves a multi-level structure where participants can earn commissions not only from their own sales but also from the sales made by individuals they recruit into the business, forming a "network" or "downline."

Key aspects of network marketing include:

1. Direct Sales: Distributors sell products directly to customers, often outside of traditional retail settings. This can happen through personal connections, online, or at events like parties or presentations.

2. Recruitment: In addition to selling products, distributors can recruit others to join the business. When their recruits make sales, the original distributor may earn a commission on those sales.

3. Multi-Level Structure: Earnings are typically generated on multiple levels—both from personal sales and from the sales made by recruited team members (downline). The larger the network, the greater the potential for earnings.

4. Low Start-Up Costs: Joining a network marketing company usually involves a low initial investment, often for a starter kit of products, marketing materials, or training.

5. Products or Services: The companies involved usually sell consumable products like health and wellness supplements, beauty products, or services that customers need regularly, which can lead to repeat business.

While network marketing can offer opportunities for financial growth, it is often criticized for its structure, which can resemble pyramid schemes if the focus is primarily on recruitment rather than product sales.