Network marketing is a business model that depends on person-to-person sales by independent representatives, often working from home. A network marketing business may require you to build a network of business partners or salespeople to assist with lead generation and closing sales.

There are many reputable network marketing operations, but some have been denounced as pyramid schemes. The latter may focus less on sales to consumers than on recruitment of salespeople who may be required to pay upfront for expensive starter kits.

KEY TAKEAWAYS

Network marketing appeals to people with high energy and strong sales skills, who can build a profitable business with a modest investment.
A network marketing business can be a single-tier program, whereby you sell the products, or multi-tier, where you also recruit additional salespeople.
Beware of network marketing companies that create many tiers of salespeople or require you to purchase expensive products or training material up-front, Make sure to thoroughly research the company before you join.
How Network Marketing Works
Network marketing is known by a variety of names, including multilevel marketing (MLM), cellular marketing, affiliate marketing, consumer-direct marketing, referral marketing, or home-based business franchising.

1.Network marketing is a business model that relies on a network of independent distributors to sell a product.
2.Multi-level marketing is a type of network marketing where the salespeople also earn money by recruiting more salespeople.
3.To earn money with network marketing, you must commit time, money, and effort—possibly more than you'd expect.

Companies that follow the network marketing model often create tiers of salespeople—that is, salespeople are encouraged to recruit their own networks of salespeople. The creators of a new tier (or "upline") earn commission on their own sales and on sales made by the people in the tier they created (the "downline"). In time, a new tier can sprout yet another tier, which contributes more commission to the person in the top tier as well as the middle tier.

Thus, the earnings of salespeople depend on recruitment as well as product sales. Those who got in early and are in a top tier make the most.

Is Network Marketing a Pyramid Scheme?

While network and multi-level marketing programs have been accused of being pyramid schemes, there are some important differences. While those who are able to recruit more members into the program are often able to enjoy greater residual commissions, network marketing is a legitimate and legal business structure that offers real products and services sold to customers.

Will I Make Money by Joining a Network Marketing Program?
It is certainly possible, although not probable. Some people do enjoy great success at network marketing, largely due to their ability to recruit more members to the network. There are two main revenue sources: selling products, and commissions from sales made by team members downline. The more people there are downline from you, the more money you will accrue - the larger the team you can recruit, the more money you can make.

Most people who join legitimate network marketing programs make little or no money. People may actually lose money. Some may become involved in an illegal pyramid scheme and not realize that they have joined a fraudulent venture, and can lose everything they invest. Do your research and ask around before diving in.

What Is the Top-Grossing Network Marketing Program?

Amway consistently tops the list. Top-selling brands for Amway are Nutrilite vitamin, mineral and dietary supplements, Artistry skincare and color cosmetics, eSpring water treatment systems and XS energy drinks—all sold exclusively by independent Amway Business Owners. In 2021, it brought in $8.9 billion in revenue.