Network marketing can be lucrative, but only a small percentage of people make serious money. Often referred to as multilevel marketing (MLM) or direct marketing, the idea of making money without any special skills or major investment with immediacy is appealing. And the promise of residual income fuels the desire to never wind up in your current financial position again if you've found yourself in a somewhat tough spot.

De term 'upline' wordt gebruikt voor iedereen die boven in de verkooppiramide staat (de sponsors). De term 'downline' staat voor alle verkopers die onder een sponsor vallen en waar men eventueel bonus of commissie voor kan krijgen. Commissieregelingen kunnen gecompliceerd zijn. Ze kunnen bonussen geven voor zowel werving van verkopers als de verkopen van deze verkopers. Het MLM-moederbedrijf heeft geen eigen verkopers in dienst maar verzorgt vaak wel cursussen en opleidingen tegen geen of een beperkte bijdrage. Hier leert men hoe de producten het beste kunnen worden verkocht. Bijeenkomsten hebben als belangrijkste functie of doel de verkopers scherp gemotiveerd te houden door onder andere succesverhalen en het uitreiken van prijzen en bonussen op basis van de gegenereerde inkomsten. Vaak wordt bij het behalen van bepaalde verkoopniveaus een status aan de verkoper toegekend zoals 'senior consultant', 'supervisor' of 'millionair team'.
Of these second-wave MLMs masquerading as women’s empowerment, LuLaRoe is queen. More than 80,000 women have paid around $5,000 for several boxes of low-cost clothing and worked as much as 80-hour weeks to outfit hundreds of thousands of suburban women in multicolored polyester. But according to a report that studied the business models of 350 MLMs, published on the Federal Trade Commission’s website, 99% of people who join multilevel-marketing companies lose money. Depending on how you look at it, it’s either a brilliant business model or a predatory practice—or a little bit of both.
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