What is network marketing? This business strategy has been around for so many years and is considered one of the most effective and quickest ways to move your products, yet many misconceptions surround the idea that is why many people not familiar with it also misunderstand it.

Here is a simple rundown to understand what is network marketing, how to go about it and the common pitfalls attached to it every entrepreneur must avoid.

Break it Down

When you say network marketing, you can literally refer to it as the market within your network, as in your own social network or social circle. Be it your own family, friends, colleagues, business partners, etc. The point is, you start with your own group in order to move your service or product from the supplier to your target customers. In short, when you say network marketing you are using your individual social circle so you can move your product or service from supplier to customer.

Build a Solid Business Network

The companies behind your products or services will pay you in order to build your network of entrepreneurs within your social circle. Without you realizing it, you are actually doing this on a daily basis even without getting paid. How often have you recommended a great film, a new restaurant serving amazing Italian food, even a cheaper and more efficient car wash?.

Red Flags - It Might Look Like Network Marketing, But Is It?

Do the terms “Friend to Friend Marketing” or “Independent Distribution Marketing” sound familiar to you? That’s because schemes like these are so popular many people are not aware how dangerous this can be. Why is that? Because for a newbie it’s quite difficult to recognize a scam even if it’s already staring you in the face. Thousands of individuals have lost hundreds of thousands of dollars to these illegal pyramids or chain distribution tactics. When someone tells you to stuff an envelope with ten bucks and pass it up-don’t buy it. This is a hoax anyone must avoid at all cost.

Network Marketing - The Real Thing

There are only three truly genuine and effective ways to move your product and these are direct sales, retailing, and network marketing. The most common among these is retailing where you go to the mall, get what you want and pay for them over the counter. The Avon lady doing business on the other hand is your most popular example of direct selling. It also reminds you of that guy with a tie going door to door selling encyclopedia the old fashioned way. Finally, there’s network marketing.

So how do you differentiate network marketing from illegal pyramiding? First, the latter is illegal and the product or service does not really exist. How can there be any marketing if the product or service is not moving? Nevertheless, some are simply too excited about making money that they barely stop to really think and ponder about what is going on.

Doing Network Marketing Right!

Many people resist network marketing because they automatically associate this or confuse it with direct sales that they do not want to do. Perhaps the misconception comes from some distributor going door to door trying to woo the customer into buying the herbal meds they have at hand. However, this is merely one aspect of that, there are other more fun, creative and more interesting ways to do this right. The important thing to bear in mind though, is that you must build, sustain and nurture your selling team within your social circle first, preferably your own family and close friends before getting other people to join your group. Trainings and team buildings are also essential to keep yourselves focused and motivated on your goals, be it short or long term.

When you sponsor a distributor, you acquire a lifelong loyal customer plus distributors and customers under them that they will be able to recruit and sponsor. What is network marketing? It is a collaborative effort, not sole ownership, or proprietorship. It is a solid chain that cannot afford any missing links.