Network, matrix, or multilevel marketing (MLM), are terms used to describe an arrangement in which individuals, acting as independent contractors for a company, are compensated based on their sales of products or services, AS WELL AS for the sales made by those they refer to the company. Simply put, you also earn a commission on the sales of the people you’ve referred to the program, and possibly the sales of the people they’ve referred for several “levels” down. Hence the term “multi-level”.

MLM programs are very similar to the affiliate programs run by major companies like Amazon.com and eBay, except they give you added incentive of a commission on the sales of those you refer into the program. This means you can increase your own income by helping the people you’ve referred.

Network Marketing should not be confused with pyramid schemes, which are illegal. Click here for more on the difference betwen MLM and a pyramid scheme.

J. Paul Getty, American industrialist and founder of the Getty Oil Company, once said “I would rather make 1 percent on the efforts of 100 people than 100 percent on my own efforts.” This very basic concept is the cornerstone of network marketing.