Network Marketing (also known as MLM) is sweeping across the internet. Each month tens of thousands of people worldwide begin their first attempts at earning money online through network marketing programs. But is network marketing for real? Is the internet the key to network marketing success? In this article we will ‘pull back the curtain’ on network marketing online so you can see how it began, how it works now and whether or not true success is actually possible.

First, lets consider the network marketing method itself. Some people think MLM is a scam because you usually have to pay a little something to get started whether it be buying the product yourself or buying a kit or website fee. Some people call it a scam because it emphasizes recruiting others to sell/consume the products in addition to selling them yourself. Most of the people I know who call MLM a scam do so because at some time someone tried to convince them them they would get rich by joining their company. They were led to believe they would make easy money by simply “sharing the plan” with others, who would share it with others, etc. and then money would just flow in. However, once they joined they found out MLM is really just another form of sales that requires a lot of work and patience they felt betrayed the business wasn’t more honestly explained to them. Rightfully so, because honesty should be at the foundation of any recruiting efforts but often is not. However it is erroneous to consider a business opportunity dishonest simply because it requires selling and work or because the person presenting it was dishonest to you.

It always amazes me how quick people are to call something a ‘scam’ because they don’t make money at it. Sure there is plenty of dishonest junk out there but if a marketer does his/her research properly up front they will be better prepared to recognize a scam. The ugly fact is that ANY business will COST you money to start. Ugly fact number two is that ANY business will cost you money to maintain. Most MLMs will have an initial cost to get started, whether it be buying their introductory ‘business kit’ and/or monthly product or service purchase. Often with MLMs there is a monthly fee for your personalized company website or web store. Even free opportunities, like affiliate marketing will cost you something to market. Be prepared to spend some money before you will see earnings.

Too many people online are looking for a quick score. The truth is many people are so desperate for money they fail to see (or ignore) the flaws with something. They need money, they want it fast so they take stupid risks. Just look at how many people are still falling for the latest incarnations of the Nigerian e-mail scam even today. Then when these people do finally join a legitimate program they get all upset when they don’t see instant cash flow or heaven forbid, it actually costs them money! They don’t seem to understand there is no free ride. You have to do the work and you have to spend some money before you will see results, plain and simple. The important thing is to keep your spending managed and learn to maximize the results for the dollars you spend.

Now let’s take a closer look at internet based approach to network marketing.

The advent of the internet certainly did open up a whole new marketing channel for the network marketing industry. At first MLM distributors started building their own websites to recruit or market products. Eventually all the major companies began to provide their members with replicated websites so every distributor could have an internet presence. Usually the intention of these companies was to provide a convenient way of providing information or allowing online ordering to support the distributor’s offline efforts. No longer would a member have to physically pass out brochures or audio recordings to offer more detailed information to their prospects. Now they could just send them to the company website to learn more, order product as a customer, or even sign up as a distributor themselves. In time what began as a support tool for offline effort became for many a total online business marketing system.

While many of the grand old companies of MLM still primarily cater to the offline marketing face-to-face approach others have embraced online marketing and have moved their internet approach beyond just being a support tool. Some companies remain locked into the old-school methods and are highly restrictive of the online marketing efforts of their members. Such companies continue to insist that network marketing is inherently a face-to-face social marketing method that should not utilize the internet as the first line of approach to prospects. Perhaps that is the primary reason why MLM companies began referring to Multilevel marketing as ‘network’ marketing (referring to selling to ones social network) a few years ago. Factor into that a lot of people hate direct selling and the negative perception some people have of ‘multilevel marketing’ and you can see why the big change in terminology. However even if these companies hold that MLM must involve marketing to ones social network can’t a person’s social networks be built or cultivated online? Isn’t that the whole concept behind all the major online social networking sites so popular today? I believe any company not taking full advantage of web marketing by providing their members with internet marketing training and resources is doing a serious disservice to their business and their members.

Enter the internet based MLM companies…

As the internet grew and savvy entrepreneurs began to see the potential of online marketing, total internet based MLM companies began to spring up everywhere. Imagine being able to have all the compensation advantages that MLM offers without the rejection of face-to-face selling that destroys so many people in the industry. It seems to be a marriage made in heaven, as they say. Now nearly every business opportunity online has an MLM payout structure of some kind. Of course many of these still fail since anyone who can afford the software can start an MLM nowadays. Few operators of these grass-roots start up companies have the experience or resources to build anything of lasting substance so potential members need to be selective in what they chose to join and promote. Other operators are just plain scam artists who never intend to last beyond their fleecing of the masses as quickly as they can for as much money as they can. Of those legitimate companies that so survive attrition continues to be the bane of the industry, however.

Personally I like the whole idea of network marketing companies totally internet based. There are a lot of advantages here. Since many of these companies promote products that are digital or service oriented the overhead for the company is much lower and product management simpler. Additionally such products offer the option of international expansion for the company as the complications of shipping and monetary exchange is all but eliminated. For the member this allows for international recruiting and less reliance upon the strength of a single nations economy for sales. Also since these companies are totally internet based they tend to be better at providing more online marketing tools and resources for their members than the older traditional product based companies. The problem with such business opportunities of course is new members often drop out because their expectations for fast income aren’t met or they find they are unable to compete online with internet gurus who quickly saturate the web with the replicated web pages these companies offer.

Internet based network marketing is not easy even when you have a website or marketing system already in place for you to plug into. But then again no form of internet marketing is as easy as the ‘gurus’ would have you believe. The advantages however and the potential for an ever increasing recurring income keeps me interested and involved with online MLM. While the standard approach to internet marketing is generally reliant upon making a single sale for commission, MLM offers ongoing residuals. Typically online marketing requires you to constantly research and test new products whereas online MLMs have plug-and-play products and services already researched and packaged. Usually when marketing if you find a good product that produces a decent income for you, you need to keep it a secret or everybody will jump on it and compete with you, but MLM rewards you for telling others about your product and the best way to market it. Get the picture?

One little known secret of many of the the more famous internet marketing gurus is their associations with MLM companies. When I first became involved with internet marketing I purchased tons of guru courses and e-books. Most of them were about making big money online by being an affiliate for digital products others had created. I wondered how anyone could sustain a sizable income just making one-time sales of e-books. In my own experiences I found that often it will cost more to market such products than you earn on them. So how did these guys and gals do it? So I began to dig.

Firstly, I found that the movers and shakers in the internet marketing industry had not only self-produced multiple products of their own, they had set up affiliate programs so others would incur the expense of marketing their products for them. Do you know what the highest selling digital products are? It’s downloadable products (e-books, videos, etc.) about how to make money on the internet. Such books are produced and promoted by these same gurus, who themselves are affiliates of other guru’s ‘make money online’ products.

Secondly, I discovered nearly every one of them were major earners in network marketing programs (and often they are in several of them). This association with MLM companies provide them with a steadily growing ongoing residual income separate from their other marketing ventures. It also provided them with an ever growing list of people they could carefully cultivate for promotion of their other ventures and products.

Finally, there’s the ‘list’. Whether they advertise a new digital product or an MLM program they begin by announcing it to their list of email followers. This is BIG as it positions them to make money almost instantly by just sending a promotional email to their list subscribers. It’s fascinating to see how quickly a guru can become a top leader in a new MLM practically overnight.

So the bottom line of all this is, like it or not, network marketing online is a very real way to a long term income online. Other forms of marketing on the internet are certainly valid but few will offer the residual pay or long term potential as MLM. That is why I include MLM opportunities in my personal business portfolio and encourage others to do so as well. Of course there are some cautions and potential pitfalls to these programs so you must be selective in the companies you choose to associate yourself with but suffice it to say MLM is here to stay and should be considered as a part of any internet marketer’s business plan.