Network marketing, also known as multi-level marketing (MLM), is a direct selling method or services that uses a network of people to sell a product or provide a service. According to the IRS, network marketers earn money either by directly selling products themselves or by recruiting others to sell products for them or provide a particular service. Those persons in turn recruit others and so on and so forth, until there is a hierarchy of distributors selling and promoting the product, hence the term multi-level marketing.
Each distributor or partner is essentially an independent business owner, or more accurately put, an independent sales representative. Each representative gets paid for sales he or she makes, as well as sales made by each person he or she has recruited. Network marketers often earn bonuses for acquiring new distributors, partners, customers and residual income on repeat business.
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