How Multi Level Marketing Works ?

Multi Level Marketing

Multi Level marketing is appealing to many. It offers the opportunity to work part time with potential to make full time wages. Multi level marketing is NOT a scam, the Federal Trade Commission only considers a company to be scandalous if they promote a “pyramid scheme” designed with the sole purpose of promoting a pyramid and nothing else. Within a pyramid scam, you cannot make more money than the people above you.

MLMs employ 13 million people as independent sales people. Unlike traditional companies that sell to the public, MLMs work on the principal of relationship marketing. Each distributor sells to his friends, family and co-workers. MLM marketing is being practiced all over the United States and in hundreds of other countries. MLM is here to stay, and it is an explosive growth field!

MLM’s do work, but it is up to you to make sure you research an opportunity before you jump aboard. When you strip all the glamour and catchy headlines from an MLM opportunity, really what you are left with is a “Commission Only Sales Job!”. Many people have become wealthy in these types of positions. MLM marketing is being practiced all over the United States and in hundreds of other countries. MLM plans are so enticing and so idealistic.

Multi-level marketing systems combine a chain of distribution of products and services through either distributors, or representatives, who receive compensation through sales by distributors at other levels. Through this process, participants in a multi-level marketing program create a “downline,” consisting of individuals or entities selling products and services who were recruited either by the original participant, or, others whom the participant recruited. Multi-level marketing (MLM) differs from a pyramid in many ways. In truth, multi-level marketing requres that a profit be made on the sale of a product . It is system of marketing which puts more emphasis upon the recruiting of distributors than on the selling of products. As such, it is intrinsically flawed.

Multi-level marketing is a system where people make money by getting other people to become “distributors” for a product. While some money may be made by actually selling the product, most money is made by creating layers and layers of people who are distributors working under your distributorship. It is a lawful and legitimate business method that uses a network of independent distributors to sell consumer products. Pyramid schemes take on a line of products and claim to be in the business of selling them to consumers in order to look like a multi-level marketing company. Multi-level marketing itself, in pairing with network marketing, is often looked upon as a giant pyramid scheme, or scam. For those unfamiliar with the term, pyramid scheme, Wikipedia does a great job of explaining the concept here .

MLM schemes require that you recruit people not only to buy and sell your product, but who will also recruit people who will not only buy and sell your product but also recruit people ad infinitum. Only there never is an infinitum to move towards. MLM program success requires that you build a large “downline” of highly motivated, excited representatives willing to work on a steady and consistent basis to build the team even further. You also need to keep the momentum running through continuous and speedy expansion. MLMs have a bad rap. I know it and guard against it.

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