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Economic Sharing is the principle that all of the users of a network should receive a portion of the financial benefits the network generates. This is based on the idea that each user adds value to the network when they join, and interact inside the network. This principle can be applied as a marketing strategy for the sale of products or services because the revenue generated by the network is being shared with all its members. Members become advocates for the network hoping to increase the value of the network, and of course their benefit share. Robert Metcalfe a pioneer of the internet and co-inventor the Ethernet said that the value of a telecommunications network is proportional to the square of the number of connected users of the system. This idea is so widely accepted that is known as Metcalfe’s Law. When Economic Sharing is applied as a marketing strategy, the participants do not need to sell any products or services, they just need to introduce people to the network, because as they do so, they help increase the value of the network. Members that help grow the network, get rewarded by earning royalties if their referrals lead to purchases inside the network. All of the transactions occur voluntarily, just like a traditional e-commerce platform like eBay or Alibaba.

Although each company using Economic Sharing dictates its own specific financial compensation plan for the payout of any earnings to their respective participants, the method of payout is fairly simple. A portion of a sale is giving to the participants whom made the sale possible.

Some people have confused Economic Sharing, with multi-level marketing (MLM), economic sharing is different in two main ways:
 * 1) Economic Sharing does not require participants to sell or market products or services. They are asked to refer people to a network. What this means, is that is not time consuming, because it only has to be done once. In multi-level marketing (MLM) you have to continue to push sales even to people that have already purchased.
 * 2) The other mayor difference is that in Economic Sharing members can’t lose money. There is not an entry fee to become a member, there is not a monthly fee to participate, there are no purchase requirements, members aren't asked to sell anything, joining is free and voluntary, and transactions are also voluntary. Money only changes hands when is in the best interest of the both parties (buyer and seller). Statistics shows 99% of the people who join MLM lose money.  The financial compensation depends on how many referrals a member has and the amount of sales the referrals generate.  If the there is no sales, there is no financial cost to the member.

Social media plays an important role in Economic Sharing as members can use it to easily invite someone to join the network. "Social media is the key that makes Economic Sharing possible" said Allen Guo founder and CEO of ESBModel, one of the first companies to adapt the Economic Sharing principle to their e-commerce platform. Royalties or rewards can be single level or multi level, single level, only gives credit for direct referrals, and multi level gives credit to referrals of referrals. The main difference is that multi level rewards allows members with a relatively small circle of influence to have greater financial benefits.