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SpinDistribute.com Article Directory

The following article was published in our article directory on March 6, 2013.
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How Network Marketing Works

Article Category: Finances

Author Name: Rob Farrell

Network marketing has been a long-standing marketing tactic where the people selling the product or service is compensated for the sale that they generate and also for the sale that their recruits make.

There are two main objectives in network marketing. The first is to recruit as many people as one can, and the second it to sell and encourage the recruits to sell as much as they can.

The great thing about this marketing system is that the income does not just accumulate. It exponentially multiplied. This is possible because whatever one's recruits earn, and whatever the latter's recruits earn is also an additional earning for the recruiter.

People who are engages in network marketing have a Continuous source of passive income. To understand this better, here is an actual illustration on how businesses of this nature operate .

In this kind of business, there is always a set of products that is being sold. One of the most common in this industry is health products. There are a few people who will start this line of business by selling the health products and recruiting people to do the same.

Every person who is part of the starting members is required to recruit two people. This is just an example. In some businesses, the mandatory recruitment is for three or more.

Every time a person is recruited, he should pay a certain sum of money for which he is given a welcome packet of the company's products that he is supposed to sell. In the money that such person paid, a small portion is given to the recruiter. This is considered as a recruitment bonus. A small percentage of what the recruit sells goes to the recruiter.

The recruit, just like his recruiter, is also required to find people that will be his down line. These new recruits also have to give money as payment for the packet that is initially given to them. Again, a portion of that money will be given to the person that recruited them, and also to the original recruiter that signed the former up with the company.

At this point, one would probably have an idea what happens in network marketing. Although this is not always successful for every kind of business, those that make it work, triumph and make big in the industry.

People got rich doing this is a secondary source of income. The moment a person successfully recruits his immediately down line, he can already rest and consider all the checks that come in as passive income.

Network marketing is even bigger now because of the aid of the social networking sites online. Because of these, it is easier to advertise the products of these companies, and it is easier to recruit people to join in. But of course, caution must be employed before signing up in these kinds of businesses, especially because there is money involved upon joining.

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