Wikipedia definition: network marketing is a way of doing business in which a sales force earns a commission not only for sales of products and services they personally generate, but also for the sales of others they recruit and bring into the business, which creates a downline of distributors and a hierarchy of multiple leveraged levels of compensation.

This definition is pretty straight forward. Individual sales of goods and/or services generate revenue. Recruiting others into your group to sell goods and/or services also generates revenue. Revenue flows to you from what you sell as well as from the sales made by recruits. Therefore, you have a network of 2 or more people selling the same goods and/or services creating revenue.

Most compensation plans in the network marketing business are based on the hierarchy of their system. Many are so complex that its nearly impossible to understand how you get paid. Other plans are pretty simple and straightforward so any ordinary person can comprehend how they will be paid.

If you are contemplating joining such a company, be sure to do your due diligence in exploring the compensation plan. Many of these companies require that you sign up for a monthly shipment of goods or services to maintain your affiliation status. You should be able to understand how much money you will have to invest before you begin to receive compensation to offset your expenses. Otherwise you may find yourself in a situation where you can't afford to continue to operate and are at a loss. A large number of people fall prey to this every year so a word to the wise should be sufficient.

Skills in sales and marketing are required to succeed in a network marketing environment. Most newbies have no experience in these areas and are dependent on their new company to provide the training they need to succeed. Unfortunately, most companies don't provode training geared to teaching sales and marketing skills. Therefore the new member becomes frustrated and disgruntled and usually just drops out.

Again, you must do your due diligence before joining an opportunity. That includes knowing what you will need to bring to the table in the way of skills as well as the financial responsibilities. Failure to bring the skills needed can be just as devastating as financial failure.

Network marketing is a successful business model and has created more wealth than any other single industry. It provides lots of flexibility, creates teamwork, increases self esteem and is highly profitable. Great psychological income comes from helping others achieve success.

Network marketing requires dedication and perseverance in abundance to succeed. There are no "get rich quick" schemes that succeed for very long. Building a network marketing business is achievable and the rewards of success are tremendous.

Should you decide to get involved with network marketing, I wish you the best.

Best regards,

Doug