Recently from various mass media it is possible to hear about such concept as "network marketing". Someone offers it as a type of earnings, someone tells about unique properties extended by means of its products.
Network marketing – one of widespread options of the retail trade which is carried out by method of direct sales. Also it is called still multilevel marketing. In the conditions of network marketing there are no wholesale trading companies standing between the producer of goods and the seller – all movement of products happens in network of distributors, new margins are not created. On the system of sales of a such type advertizing campaigns in media usually are not carried out – sellers present goods to the buyer, report about his features, demonstrate his advantages.
Each of participants of network marketing has to include in business of new participants. The extensive network of distributors is so formed. The manufacturer of goods encourages growth of network, provides additional discounts and bonuses for increase in sales volume.
The main difference of network marketing from different monetary "pyramids" is that it is method of sale of consumer goods. Organizers of pyramids earn at the expense of monetary contributions of new participants that is not present in network marketing. In network marketing the network is built for the purpose of sale of goods. The manufacturing company has income only from sales of the products. Participants of network also gain income from sale of goods by means of people who studied this type of business thanks to them. Network marketing as a type of business, in the USA in 1945 arose. Two American entrepreneurs became distributors (resellers) of the Nutrilite Products company, having underlain the principles of network marketing in a basis of the business. Blossoming of this industry fell on the 80-90th years of last century. To the middle of the 90th years the similar companies offered buyers various goods and services — from linen, cosmetics and objects of art to household devices, car tires and services of long distance telephone communication. Now in the system of network marketing some corporations which are engaged in cosmetics distribution actively work: AVON, Oriflame, Faberlic; dietary supplements to food: Tyansha, "Siberian health", etc.