MLM Business

MLM (Multi-Level Marketing) is a platform designed to allow ordinary people with little or no resources to start their own businesses. It has a low cost entry and it can be done on a part time basis for as long as you wish to do so.

MLM is mostly associated with physical products. It has a startup kit that needs to be purchased, in some cases there is a monthly minimum purchase as well. The requirement of having to purchase the startup kit, however, is not just about making money for the company or your sponsor, it is also to prove your commitment to the business.

Once you have committed yourself financially – even with low amount of money, chances are that you will be committed to making it work so as you don’t waste the money you paid. However, it pay out a good startup commission of effort and time into getting you committing yourself to the programme.

With MLM (Multi-Level Marketing) you will be able to buy your way into higher levels and make more commission per sale. In MLM your commission levels are often determined more by the level you are operating on than your actual sales figures. In MLM, it is possible to buy yourself into a better position than your sponsor.

MLM is one type of direct selling. Most commonly, the salespeople are expected to sell products directly to consumers by means of relationship referrals and word of mouth marketing. MLM salespeople not only sell the company's products but also encourage others to join the company as a distributor.

Companies that use MLM models for compensation have been a frequent subject of criticism and lawsuits. Criticism has focused on their similarity to illegal pyramid schemes, price fixing of products, high initial entry costs (for marketing kit and first products), emphasis on recruitment of others over actual sales, encouraging if not requiring members to purchase and use the company's products, exploitation of personal relationships as both sales and recruiting targets, complex and exaggerated compensation schemes, the company and/or leading distributors making major money off training events and materials, and cult-like techniques which some groups use to enhance their members' enthusiasm and devotion.

The Direct Selling Association (DSA), a lobbying group for the multi-level marketing industry, reported that in 1990 twenty-five percent of members used MLM, growing to 77.3 percent in 1999. By 2009, 94.2% of DSA members were using MLM, accounting for 99.6% of sellers, and 97.1% of sales. Companies such as Global Wealth Trade, Avon, Electrolux, Tupperware, and Kirby all originally used single level marketing to sell their goods and later introduced multi-level compensation plans. 

Setup

MLM binary tree structure

 The blue individual will receive compensation from the sales of the downline red members.

Independent non-salaried participants, referred to as distributors (or associates, independent business owners, independent agents, etc.), are authorized to distribute the company's products or services. They are awarded their own immediate retail profit from customers plus commission from the company, not downlines, through a multi-level marketing compensation plan, which is based upon the volume of products sold through their own sales efforts as well as that of their downline organization.

Independent distributors develop their organizations by either building an active consumer network, who buy direct from the company, or by recruiting a downline of independent distributors who also build a consumer network base, thereby expanding the overall organization. Additionally, distributors can also earn a profit by retailing products they purchased from the company at wholesale price.

Importance of Attending MLM Events

Network marketing is an industry designed for people who want to change their lives – fortune and fame – because most network marketing companies offer comprehensive personal development training as well as the nuts-n-bolts of what it really takes to build a business.

The nuts-n-bolts are often taught at MLM events from the leaders who are making things happen. So if you want to know how to produce a result, you’ll often hear the answer at a company event.

But I think the most powerful reason to attend events is not found within the event itself, but rather found before and after the daily schedule and in the breaks.

Because this is when you have the chance to hang out and socialize with other people in the same business who are excited and who are serious about making incredible things happen.

This is the time when you can actually discover the “leaders” and top income earners are just ordinary people – just like me and you – warts and all. Nothing special. With the exception they did make a decision to build and they just got busy.