MLM, or Multi Level Marketing, when combined with the Internet, creates a powerful formula for creating a successful home business and achieving financial freedom.
There are literally hundreds of companies which use this business model to move their products from production to the end user and my goal in this article is to provide you with the simple facts on what this industry IS and what it is NOT!
I want to give you everything you need to make an informed, educated decision about whether or not this business concept is right for you.
Simply put, MLM (as we'll call it here) is simply a business system for moving products and services from the factory to the marketplace and using a multi level commission payout plan (that's where the term "Multi Level" comes in)! Another term commonly associated with MLM is Network Marketing due to the nature of the program members working together as a team.
Unfortunately, many people do not understand how multi level marketing programs work and believe that they are some sort of scam or illegal pyramid scheme. Nothing could be further from the truth for legitimate MLM companies.
The first thing that you need to know is that MLM is not illegal and it is not a pyramid scheme. While the organizational structure resembles a pyramid in shape, this is true of almost all businesses. There are far more workers in the lower ranks of any business then at the top, if not, the business would collapse. Not everyone in the company can be CEO or Vice President. If fact, Multi Level Marketing companies are one hundred percent legal and many multi-million dollar companies use this business model to market their products.
Some well known Multi Level Marketing companies include Herbalife, Mary Kay Cosmetics, Shaklee, Amway, Tupperware, Princess house (a subsidiary of Colgate Palmolive), A. L. Williams (Insurance), Melaleuca, U.S. Sprint, MCI, and NSA. Companies such as these have been around for decades.
There are hundreds more MLM companies and just like other companies, some are good and some are not so good. But MLM is certainly here to stay and it is an explosive growth field! In fact, increasingly you will find more and more Fortune 500 companies employing the Network Marketing business model for some portion of their marketing portfolio!
So why are MLM companies and programs becoming so popular? Well, the business model offers a wonderful opportunity for the "little guy" to start his own business on a part time basis with very little investment money upfront, but with a large income potential if she or he is willing to put in some work! Contrary to what some people would want you to believe, MLM is certainly not a get rich quick scheme and requires effort to grow your business.
John Paul Getty is often quoted as having said that he would always prefer earning 1% of a hundred peoples efforts than 100% of his own efforts. And that is precisely what Multi Level Marketing is all about. The Multi Level Marketing sales force members are not actually employees of the company, but instead they are independent distributors who are compensated for their efforts by commission based on the amount of product moved by not only themselves, but also by those whom they recruit as distributors.
As each distributor recruits others to become distributors, they create what is known as a downline and in addition to their own retail sales commissions, they earn a wholesale commission on the amount of products their downline distributors move to consumers. This process goes on for some designated number of levels and is where the term "multi level" originates.
The more people a distributor can recruit for his downline, the larger will be their total commissions. The number of levels that a distributor will earn override commissions on will depend upon the company's compensation plan but five to seven or more levels is not unusual. These wholesale override commissions can quickly add up for distributors with a large downline.
Thus, there is a strong incentive for a distributor to not only recruit more distributors below them, but to also train them and retain them as part of his or her downline. So a successful distributor must be able to duplicate their success in their downline members.
In addition to selling products directly, recruiting, training, and retaining others becomes the key to earning a large stable residual income with Multi Level Marketing. It is not easy, but it is very rewarding.
In fact, millions of people are earning a solid income from the comfort of their own home while being their own boss. With MLM, you don't need an expensive office anymore. A telephone, basic computer, fax machine, a HUGE ambition, and the knowledge of how to proceed to grow your business are all it really takes! To discover how to proceed to build a MLM business online and some of the popular Multi Level Marketing myths that cause people to fail in their Network Marketing businesses, click the links in the resource box below.
There are literally hundreds of companies which use this business model to move their products from production to the end user and my goal in this article is to provide you with the simple facts on what this industry IS and what it is NOT!
I want to give you everything you need to make an informed, educated decision about whether or not this business concept is right for you.
Simply put, MLM (as we'll call it here) is simply a business system for moving products and services from the factory to the marketplace and using a multi level commission payout plan (that's where the term "Multi Level" comes in)! Another term commonly associated with MLM is Network Marketing due to the nature of the program members working together as a team.
Unfortunately, many people do not understand how multi level marketing programs work and believe that they are some sort of scam or illegal pyramid scheme. Nothing could be further from the truth for legitimate MLM companies.
The first thing that you need to know is that MLM is not illegal and it is not a pyramid scheme. While the organizational structure resembles a pyramid in shape, this is true of almost all businesses. There are far more workers in the lower ranks of any business then at the top, if not, the business would collapse. Not everyone in the company can be CEO or Vice President. If fact, Multi Level Marketing companies are one hundred percent legal and many multi-million dollar companies use this business model to market their products.
Some well known Multi Level Marketing companies include Herbalife, Mary Kay Cosmetics, Shaklee, Amway, Tupperware, Princess house (a subsidiary of Colgate Palmolive), A. L. Williams (Insurance), Melaleuca, U.S. Sprint, MCI, and NSA. Companies such as these have been around for decades.
There are hundreds more MLM companies and just like other companies, some are good and some are not so good. But MLM is certainly here to stay and it is an explosive growth field! In fact, increasingly you will find more and more Fortune 500 companies employing the Network Marketing business model for some portion of their marketing portfolio!
So why are MLM companies and programs becoming so popular? Well, the business model offers a wonderful opportunity for the "little guy" to start his own business on a part time basis with very little investment money upfront, but with a large income potential if she or he is willing to put in some work! Contrary to what some people would want you to believe, MLM is certainly not a get rich quick scheme and requires effort to grow your business.
John Paul Getty is often quoted as having said that he would always prefer earning 1% of a hundred peoples efforts than 100% of his own efforts. And that is precisely what Multi Level Marketing is all about. The Multi Level Marketing sales force members are not actually employees of the company, but instead they are independent distributors who are compensated for their efforts by commission based on the amount of product moved by not only themselves, but also by those whom they recruit as distributors.
As each distributor recruits others to become distributors, they create what is known as a downline and in addition to their own retail sales commissions, they earn a wholesale commission on the amount of products their downline distributors move to consumers. This process goes on for some designated number of levels and is where the term "multi level" originates.
The more people a distributor can recruit for his downline, the larger will be their total commissions. The number of levels that a distributor will earn override commissions on will depend upon the company's compensation plan but five to seven or more levels is not unusual. These wholesale override commissions can quickly add up for distributors with a large downline.
Thus, there is a strong incentive for a distributor to not only recruit more distributors below them, but to also train them and retain them as part of his or her downline. So a successful distributor must be able to duplicate their success in their downline members.
In addition to selling products directly, recruiting, training, and retaining others becomes the key to earning a large stable residual income with Multi Level Marketing. It is not easy, but it is very rewarding.
In fact, millions of people are earning a solid income from the comfort of their own home while being their own boss. With MLM, you don't need an expensive office anymore. A telephone, basic computer, fax machine, a HUGE ambition, and the knowledge of how to proceed to grow your business are all it really takes! To discover how to proceed to build a MLM business online and some of the popular Multi Level Marketing myths that cause people to fail in their Network Marketing businesses, click the links in the resource box below.
About the Author:
George Dodge, an Internet MLM Coach and Mentor, shows Network Marketers how to create a passive residual income online using Internet Marketing Methods. Click here to download the FREE ebook, The 7 Great Lies of Network Marketing
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