Network marketing is a business model that relies on the sale of goods or services from person to person. It involves building a team of individuals that collaborate to spread the product's message to a variety of potential clients. The products that the distributors sell generate commissions for them. They frequently work for the company as independent contractors rather than as employees.
Individuals are required to sign up for a company’s affiliate program to sell their product or services in order to entitle the single-tier marketing system. Individuals for these programs are not required to recruit other distributors in which they will only be paid direct sales they make. There are a few top companies involved in this type of network marketing system which are Mary Kay cosmetics and Avon cosmetics. Some of the internet affiliate schemes even will pay you for driving traffic to the affiliate’s website as a bonus.
Two-tier network marketing, different from single tier network marketing, which requires some recruitment for distributors but the compensation does not entirely depend on that. You will be entitled for a bonus same as single- tier network marketing by yours’ direct sales or traffic driven to a website also by your affiliates or distributor that you choose to work together with.
The network marketing with several levels of distributor or affiliates is a form of multi-level marketing. This strategy will include direct selling and downline of distributors. This business concept tends to get a bad impression as they are similar to pyramid schemes. But, it is easy to differentiate both of them which pyramid scheme will always require to purchase an expensive start up package and encourage members to recruit more downline while MLM organizations sell real products.
Generally, a network marketing company will construct a tier for salespeople and encourage them to recruit for downline. Upline, the creator of the new tier will earn bonus on their own sales and the sales from downline itself. Normally for people who join the network marketing team they are required to attend training before making sales. Over time, a new tier may give rise to yet another tier, increasing both the middle tiers and the top tier's commission. Therefore, the earnings of salespeople mainly depend on recruitment rather than product sales which means the people who join the earliest will be in the top tier and make the most.
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