Multi-level marketing, also called network marketing is a type of direct selling used by some companies in the world. It employs a network of independent people to sell directly products to other people in their social circles or communities.
Most of the products range from dietary supplements, beauty products to kitchenware. Some of these companies include Tupperware, Mary Kay, Herbalife, The Pampered Chef, Scentsy and many others.
According to statistics, in the US alone, multi-level marketing accounts for more than $30 billion worth of sales and employs 15.6 million salespeople. While in the past the middle-aged woman was the face of multilevel marketing, more men and younger people have enlisted.
The flexible work schedules and ease of product promotion on social media have attracted more people. Also, the need for diversity sources of income has brought more people into MLM.
So how exactly does multi-level marketing work? MLM companies depend on the sales people to a wide extent. The sales people, also known as associates or independent agents market and sell the company's products.
The company's role is production and also providing support to the associates to improve their sales. MLM companies hold training and empowerment incentives and program to ensure their salespeople are motivated. Some MLM companies like Mary Kay are known to give out cars in the form of incentives.
The sole purpose of associates is to sell products on behalf of MLM firms. Most multi-level marketing associates distribute and sell products individually, although others have developed their own organizations or companies. Also, they may recruit their customers also to distribute the same products.
Consequently, at any one time, there are a chain of distributors and a hierarchy of several levels of compensation. Basically, there are three ways independent agents earn money from multi-level marketing; selling products at a profit, commissions from the company for sales made and lastly, through a multilevel compensation plan. This means that associates earn commissions from what they sell and what their recruits sell.
Be patient with yourself. It can take a very long time to build a successful multilevel marketing venture. Maybe you started multilevel marketing because you wanted to have more free time for your own pursuits. It is important to remember that it will take some time to attain a level of success that will support your freedom. Your initial experience with MLM may involve a lot of very hard work to get your venture off the ground.
An associate's recruit may enlist more people who also recruit more people. This way the income for the initial associate continues to increase and he or she moves up the income level. Every MLN company has its own income levels.
For instance, in Scentsy, a new member starts as an Essential consultant, then a Certified Consultant, to a Lead Consultant. From there, one becomes a Star Consultant then a Director, a Star Director and lastly a Super Star Director. Multilevel marketing associates are required to meet a certain number of sales volume and commissions from personal retail and associates' sales to move up the ranks.
Peer and social relationships are at the core of multi-level marketing. In most cases, friends and relatives become natural prospects. A person with average social skills and relationships is likely to have many friends to sell to and recruit people into MLM.
Millions of people join to meet people, network, learn and make a difference. This, in my opinion, explains why these companies is so successful. However, according to critics, it is wrong to capitalize on loyalties and family ties to build a business. They argue that it stresses out relationship and can destroy social foundations.
Companies that employ MLN face numerous lawsuits and criticism. They are criticized for the high initial entry costs, exploitation of peer and personal relationships and price fixing of products. Also, some multilevel marketing companies or major distributors make a lot of money holding training events or making materials which many people find odd. However, it is their resemblance to pyramid schemes that generates most criticism with many labeling them as scams.
So how different is multi-level marketing from pyramid schemes? The main difference between the two is that while MLM firms focus on selling products, pyramid schemes aim at recruiting more people. Unlike the latter where money is offered for recruiting more people, the former pays money only for sales made.
The advantages of network marketing to an entrepreneur are numerous. There are no capital requirements (apart from the starter kit), no minimum quotas, no special skills or education required. It is something you can do from the house, reducing overheads further. It is also a means to expand the social circle, travel more and enjoy the benefits of extra income while having fun.
On the other hand, multi-level marketing is hard work. You will have to work many times harder than any other work and be really patient. Have a goal in mind, wake up every day to meet it and in the end, it will all be worth it.
Multi-Level Marketing Lead Generation Program