Elizabeth sells makeup and has a team of distributors that she has recruited to sell makeup with her. She earns a percentage from all of the sales that the distributors make. What type of business opportunity is Elizabeth a part of?

Elizabeth sells makeup and has a team of distributors that she has recruited to sell makeup with her. She earns a percentage from all of the sales that the distributors make. What type of business opportunity is Elizabeth a part of?

• A. Network marketing
• B. Dealership
• C. Franchise
• D. Licensing

Answer: (A)

Network marketing is a sales model where individuals build a team of distributors and earn commissions on the sales of their entire group, not just their own. Elizabeth’s setup—recruiting distributors and earning a percentage from their sales—fits this pattern, since income comes from the performance of the people she brought in, often across multiple levels. This differs from a dealership (selling products yourself without a built-downline commission on others’ sales), a franchise (operating under a brand with fixed systems and fees), or licensing (using someone’s IP or product line without building a commission-based distribution network).

Network marketing is a sales model where individuals build a team of distributors and earn commissions on the sales of their entire group, not just their own. Elizabeth’s setup—recruiting distributors and earning a percentage from their sales—fits this pattern, since income comes from the performance of the people she brought in, often across multiple levels. This differs from a dealership (selling products yourself without a built-downline commission on others’ sales), a franchise (operating under a brand with fixed systems and fees), or licensing (using someone’s IP or product line without building a commission-based distribution network).