Network marketing is probably the easiest way to create extra income from nothing. The startup costs are extremely low, the system is already in place, and anyone can do it.

Robert Kiyosaki calls it The Perfect Business.

Donald Trump has stated that if he ever had to start over from nothing, he would find a good network marketing company and run with it.

In Multiple Streams of Income, Robert Allen calls it “The Ultimate Money Making Machine.”

If you know anything about wealth gurus, when these guys speak, you listen.

Network marketing as a business model has been around for a long time, but only recently has it started to gain traction as the marketing model of the future with powerful endorsements from Kiyosaki, Trump, and Allen, not to mention the thousands of major corporations that are using network marketing principles in their affiliate programs.

You may associate it with companies like Avon, Mary Kay, and HerbaLife; but what you probably don’t know is that the business has evolved dramatically to eliminate the pitfalls of those businesses.

The days of carrying inventory, selling products, taking advantage of your friends, and going into debt are over. Now, even mainstream companies like Amazon.com, XM Radio, AT&T, and thousands more have adopted the strategies of network marketing.

What is It?

In a network marketing business, there’s no advertising budget. Instead, the company pays its customers to market its products. What a great idea, right? Why not give everyone a chance to make a buck instead of hoarding it all for the shareholders and executives?

While this concept has always been noble, it hasn’t been until recently that some companies have perfected the system to go along with the goal.

Are you Tough Enough?

Although it’s a very simple business, only the tough need apply. Successful people in network marketing tend to be successful people in life overall.

When I say “tough,” I mean mentally tough. Network marketing challenges you to face what is probably your biggest fear: rejection. The people who are making the big bucks had to face a lot of rejection along the way to get to where they are. If you aren’t willing to face your fears and grow as an individual, you might as well stop reading.

On the other hand, if you are an over-achiever, self-motivator, and natural leader; you could have what it takes to make a lot of money in this business.

One of the things that makes it difficult is that most people associate network marketing with companies like Amway, Goji Juice, or some pyramid scheme because they have been or know someone ho has been hurt by one of these companies in the past.

Unfortunately, since the business is based on trust, a few bad apples have bruised the reputation of the industry as a whole. That’s why it’s so important to choose your company wisely.

I’ve looked around quite a bit and discovered a few things that differentiate an honest network marketing company from a bad apple.

1. Value at Every Level

This is the most important factor that separates the good companies from the bad. Have you ever been asked to join a pyramid scheme? That’s where a group of people recruit a few more people, who recruit a few more people, who recruit a few more, and on and on… The idea is that everyone is supposed to send money to the people above them and find other people from which to receive money below.

A good salesperson can make it sound attractive, but the problem is it doesn’t take long until the pyramid runs out of people and everyone except the people on top are left empty handed.

You see, you don’t receive any value for joining a pyramid. You just receive a promise of future value. That’s why it’s a scam.

Multi-Level Marketing

Many multi-level marketing companies operate under the same principle, but they disguise it behind expensive products and training. They tell you to buy a bunch of overpriced merchandise with the promise that you will make your money back when you sell it to someone else. Once again, it’s passing the buck.

If you are paying more than you normally would for a product on the promise of making money in the future, you’re in a bad-apple company.

Levels

Now, just because a company has levels doesn’t make it a bad apple. That’s a mistake a lot of people make. It’s whether or not there’s value at every level that counts.

Think of Wal-Mart for example. The shareholders sit at the top level above the executives, who are above the regional managers, who are above the store managers, who are above the department managers, who are above the ground-level employees, who are above the customers.

Think what you may about Wal-Mart, but you can’t accuse them of overcharging customers.

Good Apples

A good apple company has products that are priced at or below market levels. This means that there is value at every level. If someone just wants to purchase products, but doesn’t want to recruit others, they are free to do so because they are getting value out of the products.

A good company actually provides more value than Wal-Mart because they share the profits with any consumer who wishes to refer their products to others. I’ll take profit sharing over minimum wage any day.

2. Reasonable Startup Costs

Very Important: Network marketing businesses don’t cost thousands of dollars to start, and don’t let anyone tell you otherwise. The business should be very inexpensive to start, and you should be getting something of value for every dollar you spend.

3. Free or Inexpensive Training

One tactic that some bad apples have taken in the past when they haven’t been able to sell enough of their expensive products is to sell expensive training to associates.

Training should be free or inexpensive because everyone in the organization benefits from increased production.

4. Honest Feel

You know how some used car dealerships feel? Kind of slimy, right? There’s sort of this feeling that you know they’re pulling one over on you, but there’s nothing you can do about it.

Some network marketing companies feel the same way. If the people in the organization seem dishonest, they probably are. If the company is so great, they shouldn’t have to over-sell it.

I was skeptical at first when someone introduced me to my company, but I was quickly amazed at how normal and honest everyone was. They had confidence in their company and didn’t have anything to hide. That’s a good sign.

Extra Income

If you can find the right company, and you are willing to learn, it really can be the perfect business. I recently heard a statistic that over 20,000 people in the U.S. are making over a million dollars a year in network marketing. The profit possibilities are really that big.

The residual component of network marketing is in the power of leveraging. As your business grows, the efforts of your work will be multiplied as more and more people help you to make money.

Starting out can be slow, but if you are persistent, your business will grow and grow like a snowball down a mountain. I have seen people achieve six figure incomes on only a few years.

It’s a Business

Even though the possibilities are endless, it’s still a business and you have to treat it that way to make money. Successful network marketers keep strict business hours dedicated to building their business.

Just like in any business, social skills are a must. If you are in a good apple company, you won’t have to sell anything, but you will have to sell yourself. People who are self-starters and natural leaders tend to excel in this business.

Fortunately, if you don’t have these skills already, the support system in network marketing companies is usually excellent. Since everyone benefits from your success, most people are more than willing to help you develop essential skills.

How to Find a Company

You may not realize it, but advertisements for network marketing companies are everywhere. Anywhere you see and ad with the keywords “work from home”, “home-based business”, and “financial independence,” you can bet it’s a network marketing company. Just check out the google ads on this page. I see them all the time.

If you’re interested in learning more about the company that I think is the best, read this article on my network marketing company: