Mlm Networks

What is MLM? MLM is an acronym for Multi-Level Marketing, sometimes called Network Marketing

What is MLM?

MLM is an acronym for Multi-Level Marketing, sometimes called Network Marketing.

As the name suggests, multiple levels of people are marketing a product to consumers. A sales representative (also referred to as a distributor, member, affiliate, partner or associate) gets customers and recruits and trains another sales rep to get customers.

MLM (Multi level marketing) diagram

Sales rep gets customers and trains another sales rep to get customers

Multiple levels of marketing are actually what all companies desire (both MLM and non MLM companies). If you've ever heard a traditional company announce, "Refer a friend and you'll receive a discount on your next purchase, " this is multi-level marketing. Health clubs, real estate, telecommunications, and countless other industries use this technique. Professionals (doctors, dentists, accountants) live or die based on their customers telling others about them. All these businesses are simply trying to get current customers to advertise and market their product or service to potential customers.

The Traditional Company

In a non-MLM company, a sales manager and sales reps are hired by the company. The company is limited to the number of sales reps they can hire based on the financial resources the company has to pay salaries and on the traffic the sales manager can handle. Once a sales manager is overwhelmed, the company can hire another manager or convert a sales rep into a manager. This could be called "Multi-Width" marketing because it expands the organization horizontally as compared to "Multi-Level" marketing, which expands its organization vertically.

Mulit Width Marketing

Traditional companies (non-MLM) use "Multi-Width" Marketing

The MLM (Multi Level Marketing) Company

An MLM (Multi Level Marketing) company "starts" by recruiting one person who gets customers and recruits sales reps (just as above in the traditional company). But each sales rep is also given the option to become a manager, who can also recruit sales reps. The MLM company only pays commissions, not salaries; therefore, there are no limitations on the number of sales reps or managers an MLM company can recruit. This is beneficial to the company because of rapid expansion by the number of trained sales reps. This is also beneficial to the sales reps because their income isn't limited to only what they can sell - they can also earn commissions for having trained other sales reps.

MLM uses "Multi-Level" Marketing, which is similar to traditional marketing (see above illustration "Multi-Width-Marketing, ") except there is no limit to growth.

Very simply and factually, MLM (Multi Level Marketing) is one of the five main methods used by a company to sell and distribute a product or a service to a consumer.

All companies (MLM or traditional companies) have one main characteristic in common: they provide a product or a service that hopefully makes a consumer's life better. Once a company has such a product or service they need to make it widely known. They do this by distributing it. Distributing a product involves finding customers and getting the product in their hands. There are five primary ways to distribute a product or service:

The Five Primary Ways to Distribute a Product or Service

STORE FRONT

Company rents or buys a store in busy area to get walk-in traffic. Hires sales person to communicate with customers who walk in.

DIRECT
MAIL

Company buys
addresses. Hires marketing person to write and send written communication about products and or services through the mail.

TELE
MARKETING

Company buys
telephone numbers of prospects. Hires and trains sales people to call and sell products/services via the phone.

INTERNET

Company puts up a web site and advertises to get traffic. Similar to direct mail, the marketing occurs through written communication.

MLM

Company recruits a distributor (sales representative) to sell products. Grants sales person right to recruit other sales reps to sell products.

Each of the five methods above can use techniques from one or more of the other methods to get customers. Meaning, a Store Front isn't limited to only walk-in traffic. The Store Front can also advertise on radio, television and in newspapers, magazines, and mailers (post cards, flyers, etc.) directing prospects to the store location. This can increase the number of people walking into their store.

Similarly, a distributor in an MLM company can use some or all of the 4 other methods as well as getting customers through friends and family. And of course an owner of a store front (such as a restaurant) can also tell his friends and family about his store!

So what is MLM (Multi Level Marketing)? The main point to understand is that distributing any product means to make it known. MLM and the other four primary ways to distribute a product are simply methods used to make a product known.

MLM is Organic

Organically, the MLM industry is a fantastic model. By "organic, " I mean that if you strip away all the hype and noise and just look at it conceptually, it is the purest way to move a product to a consumer and the purest way to be compensated. Here's why

In its organic state one person shares a valuable product or service with another (not because they will profit, but because the product is valuable). "I like it, maybe you will too." That is clean and pure.
A person shares a business idea with another - this is the foundation of all businesses throughout history. "I found a business I like and maybe you'd like to work on it with me." That too is clean and pure.
The person who shares the business with another ONLY profits IF the person they shared the business with succeeds - that is ultra-responsible, which is also clean and pure.

Those three steps are the organic concepts of MLM and are absolutely brilliant.

If you strip traditional marketing down to its core, it would be a person writing an advertisement and 98% of the people who review the advertisement not responding (a top marketer gets a 10% response; the average is 2%).

Look around and see what all it takes to move a product to the consumer in the "traditional" sense, and you'll see a lot of wasted actions and resources. Can you imagine how pure a city would look if there were no advertisements? Think of the number of trees that get consumed in the name of advertising, and the materials that then end up in land fills.

Perhaps a good way to describe MLM is to demonstrate how MLM is the same as a traditional company, and also how MLM is different. Look at this diagram for a visual.

Please understand that I am not criticizing the use of trees, the cluttered environment, or advertising - I'm simply asking you to look at the amount of unnecessary actions that go into moving a product to a consumer, as compared to the simplicity of one person communicating with another.

Since 2007, Philippines-born entrepreneur Denmark Francisco went from being a tax accountant at PricewaterhouseCoopers and Deloitte & Touche to being a real example of what is possible in having a home based business with the 2007 launch of Denmark Francisco Marketing Group, a home based business marketing and education group for new, upcoming entrepreneurs.

do all mlm/network marketing companies work under the same model...the model that looks like a pyramid?

Get the answers...

Is MLM / Network Marketing the least entrepreneurial of all businesses?
Considering that... ...you don't need any business savvy, knowledge, experience, or education to join. ...you are never asked to examine your market other than to accept one liners about the global market demand ...your primary sales are to yourself and your close family and friends ...your whole network buys more product than they sell ...the whole basis is set up so that no individual should ever have to do enough sales to support themselves ...you need to be enticed emotionally to do the business by being shown all the things you can buy like cars, vacations, homes, etc. (aka, people enter on hype, not on financial assessments). bravo Raynlim ? you have at least tried to address some of the question which is much more than one usually gets from the average MLMer. You have added some percentages that are not fact. There is a higher number of people considered rich in the US than there are considered successful in MLM. One only need look at the details of any of the public MLM companies where not a SINGLE one has an average annual sales/rep over $1000. Those are facts and can easily be found assessing public records?so it you chose to throw out statistics, at least be honest about it. I am sure they are saying numbers like this at all MLM get togethers which the na�ve eat up. You seem to be suggesting that MLM and MWM differ because some involve direct sales. I would venture to say if a company is set up primarily doing direct sales than it is a sales position you are buying into. I have the utmost respect for anyone making a living in sales. Let?s not kid ourselves though, the definition of MLM and NWM involve having down lines also involved in sales?and THAT is where the issue arises. You cannot hide from the fact that no matter what label you would like to use, the basis of the problem is the emphasis on recruiting over personal sales. While I am certain there are many weak minded people who blame their failure on many things, this still does not negate the fact that an exponentially driven model of recruiting is impossible. There is not a single MLM or NWM plan that is not based on rewarding for recruiting (else it would not be MLM/NWM). Thus, what people use to blame their failure on is irrelevant because the system is flawed. ?If you think you can or you can?t wither way your right.? Try using that logic to run through a brick wall. This is merely a ploy by the intelligent folks profiting from the masses joining MLM used to keep MLMers going when they are up against difficult times. While I do not expect everyone entertaining a business opp to require a psychology degree, it IS important that the masses understand some of the dangerous tactics being used by the leaders who put out quotes like this.

Get the answers...

If MLM / Network Marketing companies did not allow recruiting for 2 years...would anyone do it?
If one had to sell the product or service for 2 years and sell enough to earn a respectable amount of personal commissions before one could recruit, do you think anyone would stick around in these companies?

Get the answers...

[[ct]]: Mlm Networks

(Free Home Business Advertising) & Mlm Network

26 Nov 2008 at 4:09pm

Next page: Home Based Sales Companies

Recommended Products

Mlm Networks News

The bumper gamblers - KanglaOnline

The bumper gamblers
KanglaOnline
Look at the number of persons duped in the name of Multi Level Marketing (MLM) networks and the persons in the top bracket of the networks disappearing with fortunes worth crores of rupees. So is the case of private banks of unknown origin like Satna ...

and more »