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What do you need to know about MLM (multi level marketing)?

January 25, 2006

If you are using the web, there is no way you have not stumbled upon and maybe even harassed by emails, advertisements, and offers of MLM.
Multi Level Marketing has been on the net, maybe as long as the net itself. It was called the “wave-of-the-eighties’ and it stands for the first successful Internet marketing as well as the best scams. It is also, by far, the most misunderstood concept on the Internet.

What is MLM? MLM is an efficient method of distributing a product or service to the end consumer. It is not a business itself. It is a WAY of doing business. It is a marketing method, and each person who markets the products or services is a representative (distributor) of that company, NOT an employee. A distributor does not work FOR the company, but works WITH the company!

The common man like you and me still struggles with a definition, even after 20 years of its existence. For understanding MLM, you should first understand what the basic ways of selling a product are.

There are five recognized ways to sell a product:
1. Retailing (you go to the shop and buy your product)
2. Direct Sales (you get the product sold to you directly by someone you know – like Amway, Avon, Tupperware, etc)
3. Multi level Marketing (You sell your product through Internet through vast networking)
4. Mail Order (the product is sold through mail order catalogues)
5. Pyramid Sales – this type of sale is illegal because though it generates down-levels it does not really involve marketing, but a roll of cash

MLM is the most powerful and effective marketing system yet found. It is based on a chain recommendation for a product or service. This marketing method allows you (as distributor) to recruit other people (distributors), who in turn repeat this process. This way you acquire an organization of distributors who are your “down line”. You could end up with a large “down line” organization all buying and marketing products for the company you choose. You will receive a commission check from the sales of those distributors, and they, in turn, will also receive a commission check from the sales within their own “down line” organization.

To understand the profits involved, you should know that traditionally about 80 percent of the cost of a product or service is spent on marketing and distribution. This involves the long channel of manufacturer - distributor - wholesaler - sales - retail - end consumer. MLM companies eliminate all these and deliver product or service to the end consumer.
The profits made are shared with the distributors.

Things to keep in mind:
1. MLM is actually, business for yourself and NOT the Company.

2. The business is not selling retail. It is building a large network through which you can sell retail
3. MLM is synonymous with networking. You sell the product through networking. The larger your network is, the larger your profit will be.
4. MLM can be as successful as you want it to be, depending upon the time you invest in it.

Written by HYIP Network · Filed Under Articles 

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