Commonly referred to as multi-level marketing, network marketing is a concept where individuals come together with a parent company and act as independent contractors in the sales of a product or service. In return for helping to promote and sell the parent company’s product or service, individuals are financially compensated in an amount that has already been determined. The actual amount of compensation will vary from one network marketing opportunity to another and will be strictly dependant upon the company’s policy.
A legitimate network marketing opportunity will not grant money for recruiting new members, which are required to pay sign-up fees. Instead, they should be paid based on the commissions that they earn from the sale of a product or service. One of the main problems that many network marketing companies face is their comparison to illegal pyramid scams. However, there are a large number of legitimate network marketing companies that operate regularly in every state and in dozens of countries. Today, they are commonly referred to as affiliate marketing or programs.