A Good Network Marketing Business model must have the following distinctive characteristics
The entry based is the initial legitimate work the distributor must do, that is the number of end-users he must convince to close a deal. Imagine you are an individual say A and you sponsor (that is you close a deal) with two individuals say B and C, you get a commission (reward) for such efforts. When the individual B follows the same marketing goals and do the same thing, closing deals with two new clients, the network of product users and product distributors increase. This is a 2 based Hierarchal structure, it could be 3 based or four based structured. See the figure below.
There is no amount that would be spent on paid advertisement, since distributors are compensated for doing their moneyless kind of advertisement called Network Marketing.
For those that involve direct sales, there is little or no need for a well-structured distribution channel. Only end-users or distributors who are always rewarded for closing a deal.
Apart from direct sales, the option of selling the product appeal to some distributors who seek to recruit and sell as much as possible to get more compensation.
As the Distributor build his network, it is his responsibility to form a family of distributors who work as a team to earn more money. Any member that refuse to do the legitimate work of bringing in new distributor cannot earn more, hence the need to work as a team is unique for overall performance of the network.