What is Network Marketing?
     Network Marketing, also known as Multi-Level Marketing (MLM), is a legitimate business model that uses direct selling and relationship referrals as a method of selling a company’s products or services. In a typical networking model, individual associates (often referred to as distributors) essentially contract or act like a franchisee to the parent company and are paid a commission based on the volume of product or services that are sold as a result of their own organisation’s efforts.
     To fully appreciate this home-based business opportunity, we encourage you to look at it from the perspective of both the company as well as that of the business operator.

Why Would Companies Choose to use the Network Marketing Distribution Model?
     Just like any other company that sells goods or services the ultimate goal of a network marketing company is to make sales and increase its customer base. In a traditional manufacturing company who sell their products to the general public there is normally a large amount of costs associated with advertising and distributing their product (ie the middleman is responsible for a lot of the cost), before it is then sold at a retail outlet who again add a profit margin.
     Instead of using the traditional method of manufacturing and delivering their products, MLM companies choose to bypass the middleman, selling direct to the customer. They use referrals and a word-of-mouth approach to develop their customer base as opposed to a large advertising budget and as such the money that would normally go to the middleman and advertising can now be used to reward business operators (distributors) a commission for helping the company to make a sale.
     There are a number of reasons why many companies are now choosing to use this increasingly popular business model. Firstly, it allows start up companies to build a customer base through referrals without having to try to outspend their competitors advertising budget. Essentially network marketing levels the playing field and allows small businesses the same opportunity as their competing international heavy weights. It also allows the manufacturing company to build a relationship direct with their customers creating better customer satisfaction and loyalty. Selling direct to the customer and bypassing the middleman also helps the customer to save money.



History of Network Marketing
     The history of network marketing originates back to the 1940’s where a company trading under the name of California Vitamins discovered they could make more sales when they had a lot of sales representatives selling a small amount of product each, compared to the traditional business model, of trying to have a few sales representatives selling a lot. California Vitamins also discovered that most of their growing customer base was made up of the friends and family of their existing sales representatives who had essentially referred them to the company as they were impressed with their product line.
     New sales representatives were then created from existing satisfied customers and a commission based system was developed. Both teams and individuals were rewarded according to their sales efforts and as a result network marketing was born. The same company later changed their trading name to Nutrilite Food Supplement Corporation.
     In 1959 Richard DeVos and Jay Van Andel founded the company Amway which was an abbreviation for the term The American Way. Amway from day one was based on the same network marketing concept. Almost 50 years later Amway is a well established network marketing company operating in more than 80 countries around the world and with more than 3 million business operators.

Currently it is estimated that there are more than 50 million people worldwide involved in network marketing with almost 100 billion in annual wholesale revenue. Given the history of network marketing and it’s rapidly growing popularity, the network marketing industry is recognised as one of the fastest growing industries in the world today and is predicted to have significant growth well into the future as more and more companies are choosing to capitalise on this networking trend and choose to sell their products direct to the consumer. This emerging trend is also being driven by a wave of entrepreneurs who continue to drive the concept of improving quality of life and working from home.
     Although the history of network marketing dates back to the 1940’s it is only now that the industry has come of age. Network marketing has now grown to the point where it is creating more millionaires today than the dot com boom industry did before the bubble burst.

The history of network marketing has stood the test of time and over the past 50 years has proven itself to be a successful distribution model and home-based business opportunity. The industry itself is now currently being endorsed by many business leaders as a proven system for anyone who wishes to achieve financial success. It is not surprising that network marketing is now one of the fastest growing industries of all time with an estimated 150 000 people just like you, joining the industry every single week.
     Given the proven history of the network marketing business model and the emerging business trends the timing could not be better to capitalise on this trend and we encourage all entrepreneurs looking for a home-based business opportunity to seriously consider a network marketing business.