Network Marketing or MLM in combination with the Internet, creates a unstoppable powerful formula for growing a successful home business and achieving financial freedom.
There are literally hundreds of companies which employ 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!
You can only make an informed educated decision as to whether or not this business concept if right for you if you have the required information upon which to make your decision. I hope to provide some of that information in this article.
Multi Level Marketing is simply a business model for moving products and services from production to the consumer using independent distributors with a multi level commission payout plan. Since distributors can recruit other distributors and establish teams that work together, this business model is often also called Network Marketing.
Some people believe that MLM companies are nothing more than scams or illegal pyramid schemes. However, for true MLM companies, nothing could be further from the truth. These people simply do not understand how Multi Level Marketing companies work.
First, understand that MLM is not an illegal pyramid scheme. It is 100% legal and many multi-million dollar companies market their product strictly through MLM promotion.
Some of the best known MLM companies include Amway, Shaklee, Tupperware, Princess House, a subsidiary of Colgate Palmolive, A.L. Williams, Mary Kay Cosmetics, U.S. Sprint, MCI, Melaleuca, and NSA. These companies 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!
No matter what some MLM recruiters would like you to believe, Multi Level Marketing is not a get rich quick scheme and work is certainly involved if you want to build a long-term stable business. So, why are MLM companies and programs so popular? It is because the Multi Level Marketing business model presents an excellent opportunity for the “little guy” to start, on a part-time basis, a business that has a large residual income potential.
The magic of MLM is that independent distributors earn commissions not only for their own efforts, but also on the efforts of other distributors that they recruit into the business. Earning 1% of a hundred peoples efforts is always better than earning 100% on your own efforts, as John Paul Getty noted.
The term “multi level” comes from the process where by one distributor recruits other people to become distributors and the new distributors are placed under them in what is known as a downline. Each distributor is paid a retail commission on the products they sell themselves, and a wholesale commission on the products their downline sells (down to some designated level).
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 if a distributor can teach his or her downline members to be successful, then then they will be rewarded by increased earnings themselves. To paraphrase what Zig Zigler once said, you can get anything you want if you help enough others get what they want. By helping others succeed, a distributor helps themselves.
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.
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