Everything You Need to Know About Multi-Level Marketing

If you want to be an entrepreneur but lack sufficient capital to start your own company you should take a look at multi-level marketing, also know as MLM or network marketing. It requires very little money to start your own business and the rewards can be very lucrative. There are many other advantages as well. You can begin just working part time so you can keep your current job. You can run your business from your home. You can be your own boss, setting your own hours, working as much or as little as you like.Network marketing is a model that differs from traditional retail or direct sales. There are all sort of products and services sold by many companies that use a networked sales organization model. In networked sales the customer consuming the goods can become a sales person who also sells the goods. In direct sales, a sales person earns a commission for the sales they make to customers. The sales person does not share their commissions with anyone else. The customer is never recruited to become a sales person. The role of sales person and customer is very defined. Usually the sales person has a sales territory designated by their company. The sales person is restricted from selling outside their territory.The people who are involved in a networked business are often called associates. To get started you have to be sponsored by an existing associate. Once you join you may sell the products and you may sponsor associates under your you. The associate that sponsored you is your "up line". The associates you sponsor will sponsor associates. Your associates and the associates they sponsor are your "down line". Multiple levels are formed as associates sponsor new associates. As you can see, a networked sales organization creates a pyramid shaped hierarchical structure consisting of many levels. Thus, the term multi-level marketing.When you are in a networked business you receive commissions from your down line sales. Likewise, your up line makes commissions from the total sales production of your organization. This type of revenue sharing encourages associates to recruit new associates. There are many different variations of this revenue sharing system.The traditional advertising mediums of newspapers, magazines, TV and radio are not used to promote sales. Products are promoted and sold within a network of family, friends, acquaintances, co-workers and other associates. Consumer products naturally do better in a networked environment than high ticket luxury goods. Things like personal care and home cleaning products, vitamins and food supplements are things people use everyday and have to buy frequently. These types of products are generally the most successful in the network sales environment.Some people avoid starting their own company because of the huge amount of work and administrative responsibility of running a company. One of the best things about network marketing is that most of the boring and physically intensive chores are taken care of for you. The products you sell are dropped shipped by the company to the customers. So you do not need any product inventory and you are spared the labor of having to pack and ship goods. Customers order their products from the company web page so you do not have to call on customers to get their re-orders. You will receive regular reports and tax documents. This makes bookkeeping a lot easier. You should invest in a good CPA and attorney though. It is a good investment. You want to avoid tax or legal problems.There are definite tax advantages with running your business. Set aside a room in your house for your office and you can deduct it on your taxes. Deduct the use of your car for your business. Recruit new associates when you are on a trip and deduct the trip as a business expense. Check with your attorney and CPA though to make sure you are in compliance with tax laws and to also use to full advantage all the legal breaks.For anyone wanting to start their own business MLM or network marketing would be worth taking a look at. There are no other business opportunities that one could start with such a small investment that offers such potential. If you want more information about network marketing there is plenty of information of the internet.