MLM, or Multi Level Marketing, when combined with the Internet, creates a powerful formula for creating a successful home based business and achieving financial freedom.
This business model is used by hundreds of companies to move their goods and services to the end user. In this article, my objective is to provide you with information 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 model 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.
There are many myths about MLM companies, including that they are illegal pyramid schemes or scams. For true MLM companies, nothing could be further from the truth. Unfortunately, those who believe these myths, simply do not understand how MLM companies work.
First you need to know that Multi Level Marketing companies are 100% legal and many large multi-million dollar companies employ this business system to move their products from production to the end user. The pyramid shape associated with MLM companies is the same shape as almost all non MLM companies. There are always more workers in the lower ranks than there are senior managers, Vice Presidents, and CEOs. If companies were not of this shape, they would collapse.
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 recruits a distributor can get under them, the larger their downline and therefore the larger their total commissions. How many levels a distributor can earn commissions from in their depends upon the particular company’s compensation plan. Five to seven or more levels is not unusual.
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.
Want to be your own boss? Millions of people are earning a solid income using this business model working from home. 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! Are you ready to explore the opportunities that Multi Level Marketing offers?