What is Multi-Level Marketing?

Do you want easy money? Some say they will be able to generate more money when they will be engaged in MLM. But, somehow others have their doubts on this matter. If you are trying to invest and be in this type of business, you may want to know the truth behind people’s positive remarks and negative comments about it.

What is MLM?

Multi-level marketing is popularly known as referral marketing, pyramid selling, and the most famous, network marketing. There are also other names that are used to describe the term multi-level marketing. This includes interactive distribution, relationship market and word-of-mouth marketing.

This is one of the marketing strategies wherein the force of sales is rewarded or compensated not only for the sales they produce personally but also the sales of the persons they have recruited. The recruited force of sale is known as the “Downline” of participants who can offer varied compensation levels.

You usually hear about this type of marketing strategy via email campaigns or online programs that include "make money from home" offers. You might even attempt to attend some seminars regarding pyramid selling. This is a kind of strategy of the companies engaging in direct selling. The pyramiding term that you usually encounter refers to or describes to market’s structure or system. The direct selling companies have their present existing distributors. Next, that company will now persuade or encourage those distributors to recruit new distributors. The existing distributors will be receiving a portion of the sales of their recruited person. They earn money through the selling the product directly to the buyers. Those recruits now become the downline of the distributors.

Direct selling is one of the commonly given synonyms for MLM of most people. People who are engaged in sales are expected to directly sell the product to the customers. This is through the relationship referrals and by word of the mouth marketing.

Why Do Companies Need People in this Market?

In the traditional method, several companies will spend their millions to market or promote their goods, products and even services. That’s why some prefer to engage in MLM. The multi-level market creates a more powerful and efficient method of marketing, word-of-mouth marketing. The message will be passed through those people whom you know and trust.

Companies are more willing to pay individuals like you, to communicate or pass their message (product promotion) to your friends, families, and other people you may know. Still, Bear in mind that MLM is not a marketing method wherein you are bugging your families or friends for you to persuade them. Your skill and ability to distinguish the interested individuals in your influential circles from those who are not is the MLM’s main concern are crucial for success.

Pyramiding companies or the scheme itself arises people's doubt every time it appears in the picture. This is why some of the distributors often encounter difficulty in persuading their prospected individuals subjected for recruitment. The uses of the Multi-level marketing models of various companies have always been subjected to lawsuits and criticism. The complaints or its negative appeal to people are focused on their similarity the following illegal schemes:

  • Pyramiding scams
  • The price fixing in some products
  • The cult-like behavior
  • The high costs of initial entry
  • The stress on other’s recruitment over their actual sales
  • Exaggeration and complexity of compensation schemes
  • The companies’ leading distributors which makes the major money off the training materials
  • The exploitation of individual’s personal relationships (on both the recruitment and sales target)

The Beginning of Multi-Level Marketing (MLM)

In the 1920’s, and 1930’s the multi-level marketing as a style of business existed. These are through the aid several companies that engaged in the system. You can imagine a binary tree set up or structure in the said marketing strategy. The top person will like the present structure will be receiving a compensation coming from the sales of the distributors downline members. The distributor will always be the authorized person to distribute the product of the company or its services. They will be having a retail profit from the customers and other earnings in forms of commission from your company. The downline of the recruits will not be having such. This happens through the compensation plan of the multi-level marketing which is constructed upon the product’s volume sold by their own efforts in selling including the downline organization they are engaged in. The distributors which are independent create organization by either of the following ways:

  • Building an active network for consumers who bought directly from a certain company
  • Recruitment of the independent distributor’s downline who will also build a network base for consumer. Thus, the process will lead into expanding the whole organization. The distributors can also earn additional profit through retailing the products that they purchased from that particular company.

How to Be Successful in This Industry?

The multi-level marketing industry provides you an opportunity to run your own part time or full time business and earn more money. How are you going to succeed in the multi-level marketing?

In this marketing strategy, you must have the ability to choose wisely. Several elements must be taken into consideration in selecting the right one. The most important is the company’s stability. Another element is the Excellency of the company’s product, the integrity and the management capability of the company, the pay plan, timing and momentum and the training and system of business.

You must also practice what others teach. Learning from mentors creates authentic experience. Be knowledgeable in the person’s above you or the “upline”. You must take the lead with the use of your recruits or the down line. Then make use of the net. Online activities can help greatly in product promotion. And the last thing will be to take care of your business carefully.

Knowing what is MLN is crucial. The process or system offers by this authentic marketing strategy creates vast benefits. The network marketing or the multi-level marketing belongs to those authentic business strategies though this becomes controversial. In business dealings, gains will always be present. In this pyramid scheme persons involve will be getting an immense benefit. The only risk is when a pretender approaches you to join in their constructed scam. Multilevel marketing provides you a lot of opportunity. Engaging in this business is not really a risk. Your decision or wise choice will determine the danger. You must handle things with intense care.


Laura said...

It's nice that someone describes it

michael33a said...

Awesome piece of work.