Multilevel Marketing is one of the fastest growing yet most misunderstood methods of moving products in use today. It has been termed by many as the Wave-of-the Eighties.
By the 90's more than 100 billion dollars worth of products and services has been moved through Multilevel Marketing companies.
What is MLM?
1. Marketing simply means moving a product or service from the manufacturer or provider to the consumer.
2. Multilevel refers to the system of compensation provided to the persons who are causing the product to move or the service to be provided. "Multi" means more than one. "Level" means generation.
There are five basic methods of moving products:
1. Retailing. Example. The grocery store, the hardware store, You go into a store and purchase something.
2. Direct Sales. Example. Tupperware,
3. Network Marketing or Multi level Marketing(MLM). This should not be confused with retailing which commonly is. Example. Herbalife
4. Mail Order. This can be an MLM but mostly is included in the Direct Sales category.
5. Pyramid Sales. This type of Sales is to often confuse with MLM. The fact is, Pyramids are illegal. The main reason they may be illegal is their failure to move a product or to provide a valid service. If a product doesn't move, how can you even call it "marketing", let alone "Multi level Marketing". Multi level it may be, but Marketing they are not!
Most objections that people have about getting into Multi level Marketing are due to not realizing the difference between MLM, Pyramid Sales and the Direct Sales methods of marketing.
Reputable MLM companies belong to the Direct Selling Association (DSA).
We have been conditioned to think of MLM as door to door direct sales programs because our first encounter with them was when a distributor knocked on our door to sell us something.
There are some features that differentiate MLM from Retail companies and one very significant difference are that in MLM you are in business for YOURSELF but NOT BY YOURSELF.
Being in business for yourself means you are buying the products WHOLESALE from the company you are representing.
Since we are buying products WHOLESALE we can, if we wish, sell these products at RETAIL and make a PROFIT.
The most common misunderstanding about MLM is the notion that you HAVE TO sell retail to be successful.
Let your sales come as the natural result of building the organization. The real success is in building the organization.
The word "selling" triggers negative thoughts in the minds of about 95 % of the people. In MLM you don't need to "sell" the products in the traditional sense of the word.
However, the PRODUCTS MUST MOVE or NOBODY GETS PAID.
When you build an organization, you are actually building a network through which to channel your products or services.
Retailing is the foundation of Network Marketing. Network Marketing or MLM is building an organization in which a lot of distributors all retail the products.
Another point that differentiates MLM, is the SPONSORING of other distributors. This is called RECRUITING.
When you SPONSOR someone, you are making a COMMITMENT to TEACH them how to do what you are doing, building a BUSINESS OF THEIR OWN. Sponsoring is what makes a Multi level Marketing business so different and makes it grow.
As your organization grows, you are building toward becoming an INDEPENDENT SUCCESSFUL BUSINESS PERSON. You are your OWN BOSS.
In almost all of the MLM Programs you can move to another area of the country and sponsor people without losing the volume generated by the group you left behind.
In MLM Programs you can make a lot of money by building an organization as one of the functions.
A Multi level Marketing Organization or Network Marketing is not a pyramid scheme.
In the MLM Marketing everybody starts at the bottom and has the opportunity to build a large organization, even larger than his sponsor's organization if desired.
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