Network marketing, or MLM, is a legitimate business opportunity, provided the emphasis is placed on selling products. You can sign up with an MLM organization or start your own network marketing company. You will need a wholesale or manufacturer wholesale if you start your own network marketing company. Select a name for your business then obtain a doing business license as through your local county administration office. You will also need a vendor's license.
Select a product line for your network marketing company. Start a nutritional network marketing company, for example, which is the most popular type of network marketing business.
Search for a wholesale supplier through the National Association of Wholesaler-Distributors at Naw.org. Attend NAW meetings to become more familiar with wholesalers. Sign up for some free trade publications through Tradepub.com, according to article titled "Find Suppliers for Your Business" at Businessknowhow.com. Examine the "Thomas Register of American Manufacturers" at your local library.
Call several potential wholesale and manufacturer suppliers. Ask them if they offer drop-shipping services, which will keep your inventory levels down. Find out if the supplier offers catalogs, brochures and order forms for their products. Choose the supplier that provides you with the lowest unit cost per product.
Set the retail price of your products according to your supplier's recommendations. Establish a commission structure for your distributors on several different levels. Set commissions at 10 percent, for example, for first-level sales where distributors earn money off those people they recruit. Set commissions on levels two and three at 5 percent each, for example, allowing distributors to earn commissions off people your distributors recruit.
Install network marketing commission-payment software. Use your commission-payment software to calculate the commissions of all future distributors.
Create an instruction manual for all distributors, highlighting various ways to advertise their network marketing businesses. Create a distributor's kit for all potential dealers, which includes the instruction manual, a catalog, price list and order forms.
Advertise your network marketing company in major business opportunity magazines, including "Business Opportunities," "Home Business" and "Small Business Opportunities." Start with classified ads as they are the most cost effective of all ads.
Mail a sales letter brochure and order form out to people who respond to your classified ads. Call people back when they inquire about your network marketing opportunity. Recruit distributors into your business on an ongoing basis.