What is MLM?

Many people will ask what is MLM? A more important question to ask...is it really possible to enhance my income using this business model.

The answer to the question of what a MLM is not what you would expect. First, what is MLM?

Multilevel Marketing MLM and Network Marketing are among the most misunderstood business models in use by businesses today. They are also the fastest growing method of moving products.

They have gone through numerous changes evolving into several different and varied business models. To define Multi Level Marketing it might be best to deconstruct the words in order to best define what it is.

What is Marketing?

The American Heritage Dictionary defines the verb marketing as advertising or promoting something, offering for sale, and selling.

Both MLM and Network Marketing accomplish all of the above definitions only under one business model.

MLM’s have a system of advertising or promoting products through independent distributors. Oftentimes the companies provide additional sales aids for the distributors.

The distributors not only advertise and promote the products, they also offer them for sale and actually close the sale.

What is Multi Level

Multi-level means that the sales organization is more than just one person. It could be several levels of people. Each level gets part of the income of the final sale up to a certain point.

This is similar to traditional marketing in that the sales benefit several levels of people.

In real-estate for instance, there is a broker, associate brokers, and real estate agents. Often the associate brokers get a small portion of the agents commission. Ultimately the profits flow to the broker or the first level and if part of a franchise, some of the profits flow up to the franchise corporation.

In other sales focused models, managers and VP’s get over-rides and bonuses on the sales made by the salesmen under them.

MLM’s are similar to the franchise model in that you have to pay to play. The difference is that the cost to get into MLM’s is a fraction of a traditional franchise. The fees typically run from $50 to $90 per year.

MLM could be called micro franchising. Since the entry cost is so low, it attracts those who are not qualified to become business owners.

Note...It also attracts the unscrupulous. So if someone says you should buy now or you will miss out, you should miss out.

Note...There are some MLMers and Network Marketers who will instruct their down line to encourage their prospective associates to go home and sleep on the concept and make sure it is right for them.

This may contradict everything you ever read about the psychology of sales. However, it eliminates those who will do nothing and allows for only getting the creme of the crop into their organization.

One company even goes so far as to have this as part of their presentation. They even tell you not to go to your friends and family to pitch the business prospect to them. This is the policy I recommend to all who sigh up under me.

So part of the answer to what is MLM depends on who is presenting to you.

The MLM Model

The business model involves you purchasing a minimum amount of product. The rational is you need to use in order to encourage others to use.

Note... While most companies have this policy, many of the products can be sold and you will not have to use them.

Your business can then take any of a number of paths.

You can focus on just selling the product. Any company that has a unique product can produce an income. However, stop selling and your income dries up.

The solution for this is to get the buying customers to get their products on auto ship. There will be a natural attrition so continued sales are necessary. I have friends and family who have done this with both toys and household utensils and have been successful for decades.

The next path is to sign up other distributors under you. And get them to sign up distributors under them.

Next learn about the various marketing models that are in use today.This will further your understanding of what is MLM?

2 of 6 Marketing Models will give a brief look of how businesses get products to consumers.

3 of 6 Online MLM Business How does this work and why would this be a good business model for you.

4 of 6 Web Site MLM Business

5 of 6 MLM Business Plan

6 of 6 The MLM Scam Concern

Choosing Your MLM Home

There will be more on what is MLM to come. Please check back for updates

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