WHAT EXACTLY IS NETWORK MARKETING OR MLM (MULTI-LEVEL MARKETING)?

Network marketing, also popularly known as multi-level marketing is a part of the direct sales industry and involves the sale of a company’s goods and services, by an independent rep to consumers in the target market. It becomes ‘multi-level’ because these independent reps can also recruit other independent reps as well, and train them in the business, and subsequently earn some commission when their recruits make sales.

To recap, you sell for a company, and also, recruit people under you, teach them the ropes, and earn some commission on the sales they make while they can go forward and recruit people as well. You earn from your personal sales as well as from commission. Before we proceed, there are some MLM terms that anyone interested in the venture must know:

THE PLAN

This is simply used by many MLM representatives when talking about their program. It involves details on their marketing plans as well as their compensation plans.

A SPONSOR

The representative who recruits another representative directly is known as the sponsor. In order words, the person who was already in the business and recruited you to join, and is responsible for training you, is your sponsor.

A RECRUIT

This refers to the person recruited by the sponsor to join the business. One may also call them team members.

A DOWNLINE

A sponsor’s “downline” is simply made up of all direct recruits, their recruits, and so on. Meaning, your recruits as well as the recruits which your recruits sponsor, make up your downline.

AN UPLINE

Your upline consists of your sponsor and their sponsor, and so on. Meaning, if you were recruited by C who was recruited by B, who was recruited by A, it would mean that your upline is C, then B, then A.

A COMPENSATION PLAN : This is an outline of the various ways in which one can make money through MLM. What differentiates MLM from scams is the fact that the progress is made in terms of product sales rather than the number of recruits. Aside from money made from personal sales and commission as well, one may be offered bonuses or commission increase by the company because of a number of sales made.

IS THIS A LEGAL FORM OF BUSINESS?

It is not uncommon to see various myths and scandalous statements made about network marketing. It would be wise to not listen to those misconceptions and rather, take note of the things that must be present for an MLM to not be a scam.

An actual product to be sold or service to be rendered, which is of good quality. Representatives make income based on products sold and services rendered.

Rather than recruitment, the main focus is on sales of the available products and services.

If you are involved in a pyramid scheme with no product for sale, or even with low-quality products and also, where the emphasis is made on the number of recruits as it determines income, then that is illegal and you might be part of a scam.

Income earned must be as a result of the sale of those quality products rather than from the number of people you bring into the business.

 

IS IT A SUCCESSFUL BUSINESS? Many people are quick to point out the so-called high rate of failure associated with MLM. In truth, first of all, that failure rate, can be observed in business as a whole.

Secondly, due to how easy it is to be a part of the business, people don’t find it hard to walk away when things aren’t going their way. T

hirdly, as a result of how many people hear about the business, they enter it with the intention of making quick, easy money, which isn’t true for any real business whatsoever. They fail to take the product they are selling into account, as well as other factors.

 

IS SATURATION NOT A PROBLEM?

MLM is a business venture one can succeed in, as long as sufficient work is put in and smart decisions are made. The success or failure, as with all businesses, depends on the individual. Some network marketing businesses may come with their own strategies for marketing, but the core means by which businesses grow should still be applied. A target market should be determined and then conscious, strategic effort should be made to attract said market to your product.

This is a misconception that is usually spread by untrustworthy network marketers. They make it seem like it is a time-based venture where early joiners make money and late joiners do not. That could not be farther from the truth. There is an infinite number of prospects in MLM hence one cannot run out of customers or recruits. People are born every day and others turn eighteen every day. The concept of saturation is laughable.

OKAY, SO HOW DO I SUCCEED IN MLM?

There are some things one needs to consider if one hopes to succeed at MLM. Any company you join has to be a part of the Direct Selling Association. This is important because the association has ethical codes which members are mandated to follow. When selecting a product, ensure that it is one which you will be excited and proud to sell. Your confidence in the product reflects and will work towards influencing the customer towards making a purchase. Also, consumables are good products to work with because you can make repeated sales to the same customer.

Make sure the compensation plan of the company will not leave you at a disadvantage. Approach your MLM venture as you would any other business. It is not a scheme to help you make quick money. Success takes time and conscious effort and sweat. Your sponsor is a guide, the bulk of the work which will ensure your success has to do with your personal effort. Do your personal research, click to see the best MLM books on the market.