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What Is Network Marketing?

For motivated individuals with strong social skills, network marketing is a way to earn extra money and potentially build a thriving business. Also called multi-level marketing, a business meets the federal definition of network marketing if it meets both of the following conditions:

  1. Its salespeople earn money by selling products directly to consumers.
  2. Its salespeople earn additional money by recruiting new salespeople who go on to make sales themselves.

With network marketing, there is no limit to the amount of money that you can earn — job flexibility is one of network marketing’s most attractive features. You can make network marketing a part-time venture that supplements your primary income source, or you can concentrate on recruiting and developing a sales force that earns consistent passive income for you every month. As a network marketer, you’ll earn a portion of the revenue that your referrals generate. If your referrals refer new salespeople, you’ll earn a portion of the revenue they generate as well.

To provide a deeper understanding of how network marketing works, we’ll continue by profiling five of the best known network marketing companies currently in existence.

Usana

Usana markets nutritional supplements, diet aids and personal care products via independent sales associates around the world. Usana allows its representatives to set the prices of the products they sell. The flexibility in pricing makes it theoretically possible for a representative to sacrifice profit and make up the difference in sales volume. Usana recommends setting a retail price 10 percent higher than the wholesale price that you pay. You’ll also receive a commission rate of 20 percent on the sales that your referrals make.

Visit Usana’s Facebook Page

Kyäni

Kyäni is a nutritional supplement seller with an extensive compensation plan that allows its sales force to earn commissions from referrals up to 12 levels deep. Many of Kyani’s distributors have reached the coveted “Purple Diamond”, a level reserved for those who earn an average of more than $58,000 per month. Kyäni, an Idaho Falls, Idaho based company, is one of the fastest growing network marketing opportunities in the industry.

Visit Kyäni’s Facebook Page

NuSkin

NuSkin specializes in selling beauty and anti-aging products. As a NuSkin salesperson, you can sell products directly to consumers or refer your customers to the NuSkin website. If you sell products directly, you can set the retail price. Your maximum profit per sale is 25 percent. You’ll also receive five percent of the profits that your direct referrals generate. People who reach the “Executive” level with NuSkin can qualify for substantial bonuses.

Visit NuSkin’s Facebook Page

Mary Kay

One of America’s best known companies, Mary Kay is the cosmetics company that famously leases pink Cadillac automobiles to its top salespeople. As a Mary Kay salesperson, you’ll buy wholesale cosmetics from Mary Kay and sell them directly to consumers at prices that you set. Since you set the prices, your potential profits are nearly limitless — but you will incur some startup expenses while building your inventory. If you decide to end your contract with Mary Kay, though, you can return unsold cosmetics that are less than 12 months old. The return policy reduces the risk of your investment. If you recruit new sales associates, you’ll receive a commission of 4 percent on each wholesale product an associate purchases. With enough sales, you can eventually increase your commission rate and add another referral tier.

Avon

Founded in 1886, Avon is among the oldest direct marketing companies still in operation. Avon differs from Mary Kay in that salespeople do not need to carry inventory or sell products directly to customers — although having demonstration products available may help. Avon also doesn’t allow its representatives to set prices. You can sell through a catalog or refer customers to the Avon website. If you sell through the catalog, you’ll receive commissions based on your sales volume during each two-week period. The maximum commission that you can earn is 50 percent. To earn that amount, you’ll need to sell at least $1,575 in products during a two-week period.

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