Network Marketing is something that everyone does nearly every day of the week by recommending goods or services to those we know, only most people don't get paid to do so.
Consider the principles that apply to all businesses:
Every company wants you to try their product.
They want you to become loyal by using and buying their product on a long term basis.
They want you to become an advocate for their product by promoting it to your family and friends. In other words they want you to network market their product.
All of us do this all the time. Think back to the last time you went to see a film in the cinema (or, if this doesn't help, think about the last time you ate out at a fine restaurant, listened to some music or tried the latest energy drink.) If it was a film saw that you really enjoyed, the chances are you would have recommended it to people you know. Why? Because you wanted them to be able to enjoy the same experience that you had been fortunate enough to find.
Now let's say that you told five of your friends, and all five
of them went to see the same film on your recommendation. They probably
bought some popcorn and a drink with their film, and maybe even some
chocolates. Perhaps they paid some money to park in the cinema car park.
All told, they might have spent at least 100 dollars together.
That's 100 dollars that the cinema received thanks to your efforts. But how much did you get paid for doing them such a favour? Not a penny! You Network Marketed for the movie theatre and you did it for no financial compensation! They won't send you a bonus check at the end of the month and yet you were involved in Network Marketing their product to your friends. Many people will tell you that Network Marketing will not work, yet they are involved in the process continually.
Network Marketing companies rely on 'referral marketing' to spread the word about their products, which means they rely on people to spread the word about their products and business plans for them. In thanks for doing this, they pay those people for each sale made as a result of their efforts. This is much more efficient than blanket advertising, because the company is only paying for sales made, so it saves a huge amount of money which can be passed onto their research and development teams to producing better, more effective products, as well as paying its distributors (that is, those who are doing the 'referring') very well.