How To Make Money In Network Marketing

Network marketing, also known as MLM or multi level marketing, is a tried, tested and sometimes abused method of generating recurring, passive income. Don't fool yourself though - there might be people you've met or websites you've visited that say networking marketing is a scam, but the truth is most of them only feel this way because they've been a victim at one point or another.

Network marketing is a multi billion dollar industry and to help you understand exactly how to make money with this business model, you must get a grip on the core basics of how it works.

Network marketing works like this: you are given the title of independent distributor or agent and it is your job to sell goods and/or services directly to the public - face to face. Where the network aspect comes in is that you are also required to build your own network of people who will do the same as you are, and train them to sell the products and recruit more people under them as well. This creates what's known in the MLM industry as your downline - and this is where the magic really happens.

Profit model #1 - The company or individual at the top of the network will sell the goods to their independent agents at a discounted price, provide them with all the training and sales materials needed to then turn around and sell them for full price - keeping the difference as profit. Profit model #2 - For each person you can get under you doing the same, you will earn either a percentage or dollar amount off each of their sales and the sales of those underneath them in the network etc.

In some scenarios you will also get a variable commission based on the amount of people in your downline. As you can see, combining these various ways of generating income is what makes network marketing so lucrative.

Here's a good example of the way a network marketing downline generates passive income for you:

• You have 5 people in your top level which you've signed up and are selling goods

• Each of those 5 people get 5 more people to do the same = 25 people in your downline

• Each of those 25 people get 5 more people to do the same = 125 people in your downline

• Each of those 125 people get 5 more people to do the same = 625 people in your downline etc.

At this point, you are no longer training nor managing any of the people below you. They are selling and training others under them - each creating their own business and generating their own income from their own downline. The more people you have under you, the less work you have to do and the more money you will make. Sounds pretty great, right! Well it is - and this is why the network marketing model has been used by the likes of Donald Trump and Warren Buffet. It is a highly profitable business model that requires a little hard work in the beginning and a lot of reward in the long run.