Multilevel Marketing

Definition and Meaning

• Multi-level marketing(MLM), also called network marketing , referral marketing, and pyramid selling is a marketing strategyfor the sale of products or services where the revenue of the MLM company is derived from a non-salaried workforce selling the company’s products/services, while the earnings of the participants are derived from a pyramid-shaped or binary compensation commission

• Explanation:
• Although each MLM company dictates its own specific financial compensationplan for the pay-out of any earnings to their respective participants, the common feature that is found across all MLMs is that the compensation plans theoretically pay out to participants only from two potential revenue streams. The first is paid out from commissions of sales made by the participants directly to their own retail customers. The second is paid out from commissions based upon the wholesale purchases made by other distributors below the participant who have recruited those other participants into the MLM; in the organizational hierarchy of MLMs, these participants are referred to as one’s down line^[5
• MLM companies are required to make the majority of their income from sale of products. Income from recruiting is viewed as a pyramid or ponzischeme, where the fees to join fund the profits of earlier investors. The top earners in a legitimate MLM receive commissions from personal sales and/or a percentage of the sales of those they recruit, or the ones their recruits recruit.
• The MLM business model is one of a company (the MLM company) selling its products and services through a non-salaried workforce of independent “partners” or “associates” on a commission-only basis. (Most are also consumers of the MLM company’s products and services.) The MLM business model depends on the cooperative activity of all company participants, through the sales of many people throughout the various levels. Multi-level marketers sell products through a network of distributors, many of whom work at home and get paid by selling products, as well as recruiting other distributors. Those with higher sales volumes, from themselves and their team, are showcased by the MLM companies as evidence of the potential for high income
• Unfortunately, some MLM companies generate income from fees more than selling products, to the detriment to the majority of the company’s constituent workforce (the MLM participants). These companies, are only MLM in name only, creating an illusion of how one can potentially become financially successful if they become a participant in that company. This is not typical and is actively monitored by government trade agencies.
• Direct selling versus network marketing
• “Network marketing” and “multi-level marketing” (MLM) have been described by author Dominique Xardelas being synonymous, with it being a type of direct selling.^[6]Some sources emphasize that multi-level marketing is merely one form of direct selling, rather than being direct selling.^[26][27] Other terms that are sometimes used to describe multi-level marketing include “word-of-mouth marketing”, “interactive distribution”, and “relationship marketing“. Critics have argued that the use of these and other different terms and “buzzwords” is an effort to distinguish multi-level marketing from illegal Ponzi schemes, chain letters, and consumer fraud scams
• “Network marketing” and “multi-level marketing” (MLM) have been described by author Dominique Xardelas being synonymous, with it being a type of direct selling.^[6]Some sources emphasize that multi-level marketing is merely one form of direct selling, rather than being direct selling.^[26][27] Other terms that are sometimes used to describe multi-level marketing include “word-of-mouth marketing”, “interactive distribution”, and “relationship marketing“. Critics have argued that the use of these and other different terms and “buzzwords” is an effort to distinguish multi-level marketing from illegal Ponzi schemes, chain letters, and consumer fraud scams

Advantages of Network Marketing:

• With network marketing you can work according to your comfort level and convenience. Accordingly the other members of this networking chain will be their own boss and will work according to their convenience.
• If you are smart at your work and possess some great online marketing techniques, you can see an exponential business growth rapidly. Different strategies and techniques of marketers are the most important tools to reach the milestone.
• Through network marketing you can reach innumerable peoples irrespective of the region, nationality and geography. There are no constraints for people with different localities and languages when this form of marketing is concerned.
• It can provide you a passive salary which is of a great importance. Nowadays people opt for some business simultaneously with their jobs, so here network marketing can provide you a passive income.
• Once you attain a good number of down links and members in your network and you are on a much higher position of the hierarchy you can even earn good remuneration by doing some efficient work.
• Capital for any business is a an important consideration and respectively the budget for marketing is decided, while here in network marketing it has a very low start-up cost which is comparatively nothing compared to budgets carried out for offline marketing strategies.

Disadvantages of Network Marketing:

• The biggest problem with network marketing is negativity once a member is negative about his job ultimately he could never jump beyond the first level and get tucked there left with no option than to wind up all things. This mainly occurs during the probation period that is during the first three months.
• The most important thing in network marketing is interact with new people and communicate with them which require some good communication and interpersonal skills and not everyone is blessed with these skills.
• “Sky is the Limit”, some believes some don’t but this actually happens in network marketing. There comes a saturation point beyond which your business growth gets steady.
• As network marketing requires interaction with people, social networking is the best way to communicate with the masses and build up good networks. So you need a good social network to build your down chain where most people start with a high positive energy and soon gets vanished.
• There are several products which are promoted through network marketing, some attracts the customers and some fail to do so.

 

• Top MLM Companies:

1.Amway.
2.Avon. Revenue
3.Herbalife. Revenue
4.Vorwerk. Revenue
5.Infinitus. Revenue
6.Mary Kay. Mary Kay makeup
7.Natura. Revenue
8.Perfect. Revenue
9.Modicare.
10.RCM