What Is Network Marketing?

Key takeaways

Network marketing, also known as multi-level marketing, is a system in which participants sell products on behalf of a company, in exchange for a commission. Participants also earn a commission on sales from the sellers who they recruit. 

• An estimated 7.3 million Americans are involved in network marketing, mostly treating it as a side hustle. [1].

• People often become involved in network marketing because it offers the ability to work from home, independence with a flexible schedule, and the possibility to earn quick income. 

• You can learn about being self-employed by reading Coursera’s 2026 guide.

Keep reading to understand the risks and rewards of this industry before making a financial commitment, and learn about marketing and how to deepen your skills by enrolling in the Meta Social Media Marketing Professional Certificate.

What is network marketing?

Network marketing, or multilevel marketing (MLM), is a business model that requires distributors to sign up and sell a company's products. As a distributor, you're paid a commission for your products and a percentage of the sales of other distributors you've recruited to join your team. 

The network marketing industry is vast, with many companies to join, selling anything from candles to makeup to CBD oil.

Is network marketing a pyramid scheme?

Network marketing is not a pyramid scheme. While multiple levels exist, you make commissions through sales, not through the fees of new members. Members receive bonuses for enrolling new team members, but participants earn the majority of money through personal sales. You make a commission percentage from your ‘downline’ sales, but the sellers are also paid. Pyramid schemes are illegal in many countries, including the US.

Is it possible to make a career out of network marketing?

With thousands of network marketing companies to choose from, making billions in profits and enrolling hundreds of thousands of members, it’s possible to make a career from it. 

However, it’s worth noting that, for many, network marketing is a side hustle that compliments their income and tends not to be a long-term career choice. Of the 7.3 million people in the US in network marketing, only 500,000 of them work in the business full-time [1]. In a study by Jon M. Taylor, Founder of the Consumer Awareness Institute, of 400 multilevel marketing companies, half of the distributors left within a year, and 90 percent left after five years [2]. This is supported by reports that most distributors do not earn enough. 

How much can you earn through network marketing?

According to a 2024 report from the Federal Trade Commission (FTC), multi-level marketers earn an average of less than $84 per month, or less than $1,000 per year [3]. The report found that at least 75 percent of MLM income disclosure statements did not include all participants who had earned limited income or had failed to collect any income at all [3]. Numerous studies show that the majority of people in network marketing lose money after expenses. However, success stories are possible; some people enjoy living salaries and bonuses. 

Which network marketing companies are most reputable?

If you want to try network marketing, research companies, their reputation, commission structures, and how much distributors earn. You may have more success if you can also find a product you align with. 

There are some network marketing companies that have been in business for at least two decades and are accredited by the Better Business Bureau (BBB). These companies generally have a BBB rating of A- or higher: The Avon Company, Amway, and Herbalife. You can do further research to find a company that fits your needs by consulting the BBB’s directory.

Pros and cons of network marketing

We’ve looked at the salary implications of joining a network marketing company, but other factors may be considered. Here are more pros and cons of working in the MLM industry:

Pros

• Flexibility: Working in network marketing lets you choose the hours you work.

• Choice: There are many different network marketing companies to choose from, and you may be able to sell a product you enjoy, believe in, and feel comfortable promoting. 

• Training: Many MLM companies offer training on everything from sales pitches to social media marketing. You may receive tips or training from your upline, too. This can be  beneficial in helping you build your team and increase your earnings.

Cons

• Time to establish your business: It takes time to establish your business, gain a customer base, and find recruits. Because you’ll likely only be earning commissions, wages could vary from month to month and may be minimal while you establish yourself.

• Upfront costs: Network marketing usually involves buying products upfront to be eligible for a commission, including ordering a set number of products each month. You may have to cover the entire order cost even if your customers don't buy it all. 

• Company regulations: You’re responsible for your own earnings and marketing, but you’re restricted to the confines of what the company offers and how it promotes itself.

Keep learning with free resources

If you’re interested in learning more about marketing and sales, explore more resources:

• Read About Marketing Strategies: Marketing: What Is It and Why Do Companies Need It?

• Watch a How-To Video: How to Pivot Your Digital Marketing Skills to ANY Industry (4-Step Framework)

• Subscribe to Our Newsletter: Career Chat

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