Due to the many illegal or questionable structure of some multi-level marketing companies, many perceive this business model as a scam. That is unfortunate because when implemented correctly, it's a good way for new business owners to gain the experience they need using products and marketing that is made available to them.

Multi-level marketing or network marketing as it is referred to now is a business model that allows anyone with a good work ethic to begin building a business using a product or group of products or services that has already been developed. It relies on a group of people to market the product or service on a commission basis. Network marketing is basically a combination of franchise and direct sales.

Although network marketing started out using its sales representatives to deliver the products through an initial purchase and resale agreement, today many of these companies have taken over the order taking process, shipping the orders and pay out revenue. This makes network marketing a much more attractive business because the sales representatives can spend more quality time on business building activities. Today, all the business building activities can be done on the Internet when you know how to utilize it to the fullest.

In today's economy and with businesses still outsourcing to foreign countries, more people are interested in building a business, but have no hands on experience. For these individuals, getting that knowledge can be a long and tough road which many times ends in failure or the loss of savings. Network marketing requires a low start-up cost compared with traditional business building. In my opinion, it's the smartest way for new business owners to get their feet wet and experience success. Adding more income streams later becomes quite easy when you now how to duplicate your success.

The Amway Corporation was accused of price fixing in 1979. They exaggerated sales claims after selling products at a minimum price. Business Opportunity Rule was introduced in 2006 by the Federal Trade Commission, to protect people from deception and invalid claims. Before that time, many motivating programs were started which hid the truth with sales based on recruiting and not sales.

Laws have been made stronger and the 70% rule states that sales representatives are prevented from buying more product until 70% of their inventory has been sold. In addition, they must pay for their own training and marketing materials the same as any other business model.

Network marketing is practiced successfully in countries all over the world. The key to your success is in understanding that you are building a business that takes a lot of work. Network Marketing itself is not the yellow brick road to instant riches.

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