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What is Multi-level Marketing Money-making Machine?

by Olayinka Oyelami Marketing Consultant

What is Multi-level Marketing (MLM)?

Multi-level Marketing (MLM) or Network Marketing is a business model in which the dealer is rewarded not only for the sales it makes but also for the sales of other dealers he has brought into the system. Therefore it is called multi-level marketing. Commissions are, in most cases, paid from multiple levels of distributors. In MLM, the commission system is called the compensation plan.

Network marketing is a method of direct sale, where the supplier company creates conditions for individual, independent entrepreneurship. Dealers, who are not employees of the supplier company, can mediate entry of other dealers into the supplier structure. This creates a system of independent distributors who are rewarded for sales of products and services they make themselves and for sales made by other dealers below them in the structure.

Many people refer to network marketing as a fraud based on a pyramid or Ponzi scheme. There are many half-truths and myths about this kind of business. Such misleading information about MLM is widely found throughout the Internet, usually spread by poorly informed people or those who have failed to succeed in it.

The basic difference between an honest business and a fraudulent system is that through legal network marketing dealers sell real products and real services.

Companies that use network marketing to distribute their products tend to have significantly lower spending on conventional advertising because information about their portfolio is spread through a network of dealers. They mostly sell their products to people in their neighborhood, to family members, or colleagues. With the growing the number of dealers also grows brand awareness. Companies are using MLM to often reach audiences that would be otherwise hard to reach using traditional marketing methods.

One of the oldest companies that use network marketing for distribution is the American company Watcher's, which has been in business since 1932. Since then, hundreds of companies from various fields, who sell their products or services through MLM, have sprung up. According to the Direct Selling Association (DSA), there are around 16 million people in the U.S. involved in direct selling, collectively generating an annual turnover of over USD 32 billion. This method of sale is, however, widespread around the world. Every day, the system welcomes thousands of new independent dealers.

Doing business in network marketing has many advantages over a conventional job. MLM dealers determine their own objectives and tasks and they don't have to listen to any boss. They are masters of their time, they can work from home, and they take time off whenever they want. This freedom, of course, comes at a price in the form of greater requirements on self-motivation. However, it is the freedom what attracts so many people to this kind of business.

The essential difference between regular job and network marketing is the money. As an independent businessman working for a company which distributes its products through network marketing, you have no guaranteed, fixed salary. If your business is not doing well or you are just starting out, your income may be very small. On the other hand, the MLM business offers almost unlimited earnings, if you're successful. And that is something virtually no employment can offer.

The possibility of unlimited profit is based on the principle of the evaluation system of network marketing.

In direct sale, you sell certain goods or services of your supplier. In return, you are rewarded with commissions, which is directly proportional to the volume of goods sold. In MLM, however, you also get commissions from the sales of distributors that you bring to the company and from the sales of distributors they brought to the company. Modern MLM systems pay commissions from many levels of your downline, which is the structure of distributors registered under you. If your distribution network keeps adding new dealers, your income will keep constantly increasing without any limitation.

From this description it follows that network marketing does not involve only the sale itself, but also recruiting new candidates for this kind of business. Integrating new dealers and distributors is an essential part of building a passive income in MLM. Usually, many dealers try to sign up their friends, relatives, and colleagues. However, if you are to create an effective MLM business, after some time you will need to obtain a new source of other MLM contacts, called leads, you can reach with an offer. The majority of successful MLM dealers can continuously generate large amounts of MLM leads whom it can present their business

What It Takes to Work in Network Marketing?

The process of building your own business generating an income from network marketing consists of several basic activities – generating leads, recruiting new members, and their training and management.

The first step in expanding you MLM business is gaining contacts to people whom you can offer a job opportunity in the MLM company. A constant source of new MLM leads is necessary for successful development of any MLM business. Dealers acquire these leads in many different ways. At the beginning, they usually try to contact people from their neighborhood, people they know. Unfortunately, this source gets quickly depleted and they must start looking elsewhere.

One of the ways to establish new ties is to keep a blog and be active on social networks. Writing interesting articles about work from home, network marketing, and related fields can get you a loyal circle of visitors interested in alternative earning opportunities. If you can make your visitors sign up for your newsletter, you can send them targeted business offers. By sharing your articles on social networks and participating in professional discussions you can reach an even larger audience.

Also, there are many companies selling MLM leads online. Distributors seeking new leads can purchase these in large quantities. However, not always are these contacts up-to-date or fit for work in MLM business. These companies often sell the same leads to a large number of customers. People on these lists are then constantly bombarded with phone calls and e-mails from MLM dealers trying to win them for their teams. Getting these people on board is then almost impossible.

The moment you have leads, you can start your business by offering opportunities to new people. The way you do it depends on your MLM business and the product you offer. Sometimes, it is sufficient to send an e-mail, sometimes you must make a phone call. Ideally, you arrange a personal meeting where you comprehensively explain the offer, preferably using computer or video presentations.

Many MLM companies hold regular presentations where dealers can invite their prospects to a personal meeting. The company prepares a professional presentation of their MLM business, their products or services, and compensation plan. There is usually some space for discussion, and at the end, visitors can sign up into the program. This method is particularly suitable for novice dealers who do not yet have much experience with presentation of their business. Getting people to come for a personal meeting can thus be much more effective.

The final step in building a multilevel marketing business is training newly registered dealers. This part is often overlooked and yet very important for successful growth of the team. Newcomers need to be properly trained to become familiar with the products they are going to sell. Your job is also to show them how to recruit new distributors into the team. You should meet with them regularly or communicate electronically so that your dealers are constantly informed about news and changes that may occur in the company.

At first, new members are often very enthusiastic, but soon they might lose motivation with the first couple of rejections and setbacks. The distributor who brought new members into the system must assign them individual tasks and guide them to set goals. It may take several months before a new distributor becomes completely independent and able to search for new leads, make presentations, and train his own people. A MLM business is based on team work. Previously registered and experienced distributors must pass on their skills to new members. Only then can the network grow, and with it sales volumes and profits.

A set of steps that lead to successful integration of a new member into the team is called network marketing duplication. The point is to provide freshly engaged dealers with all information and experience so that they are able to proceed just like their sponsor does in building his own business. This leads to duplication of a successful procedure and new members are then able to generate leads, register new distributors, and teach them to work independently.

Who Is Network Marketing Suitable for?

Working in MLM is different from regular employment, especially in terms of its unlimited income. Equally, however, there are no lowest limits for your income either. Therefore, it is advisable to leave your job not until your MLM business generates a stable, sufficiently high income. Many people choose MLM as an additional income that will help them to provide for old age when they no longer can go to work.

Network marketing requires a lot of learning and effort and may not be suitable for everyone. People who succeed in it have excellent sales skills and the ability to manage a team of people. Also required is enough motivation, positive thinking, and the ability to go on no matter what. Because network marketing is based on recruiting new people, people with strong charisma and great social skills have a great advantage. Those who choose freelance work from home so they would not meet with other people are likely to fail.

Some MLM distributors do not meet with a lot of people in the real world thanks to their large numbers of followers on social networks or blog. And they also have a great chance to succeed. Many MLM programs are now operating purely online, where new dealers can sign up directly on websites.

MLM Gateway connects those who are involved in network marketing, providing home-based business leads. By contacting other members and presenting them the home based business they work in, MLM Gateway users create effective lead generation. This results in a rapidly growing network of business leaders in the network marketing program structure. Since MLM Gateway members already have experience with network marketing, it's far easier to establish a partnership with them. Take the Full Advantage of the MLM Gateway Leads Generation System to Grow Your Own Business. Click Here to Get Stated Free


About Olayinka Oyelami Professional     Marketing Consultant

893 connections, 18 recommendations, 2,295 honor points.
Joined APSense since, May 3rd, 2016, From Abuja, Nigeria.

Created on Aug 14th 2018 10:07. Viewed 155 times.

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