The term multi level marketing or MLM is commonly used by certain companies to promote their products or services. It is also commonly referred to as ‘network marketing’ or ‘referral marketing’. The strategy employed by individuals employing this system is often called ‘word of mouth’.
Commonly referred to as network marketing or referral marketing, it is a very simple and can be effective way of making money for the average person. The way that the system works is that individuals sign up to promote the company and to sell their products independently. They are able to gather their own customers and recruit their own ‘distributors’ who become part of their ‘downline’ or team.
These representatives do not get paid in a salary or wage by the company, but through a commission structure set out by the business. Not one will you get paid commission based on your own personal activities in gathering customers and selling products, but also through the actions of those you have recruited. The more you recruit, therefore, the more you can earn.
Commission are paid out through the companies compensation plan which will reward busy and hard working distributors with bonuses and different promotional ranks. These will depend on their level of activity and will help offer incentives to help new distributors get off the ground.
There have however been numerous skeptics towards the activities of multi level marketing companies. Often these companies are seen to have a greater view on recruitment rather than on sales, and are thus viewed in a negative light. They are also often compared and related to pyramid selling. This is however a common misconception and an unfair comparison. Pyramid selling itself is illegal and there are actually no products that change hands. It merely involves the recruitment of other sellers who have no tangible product to sell.
Despite these negative outlook however, there is good money to be made through an MLM company. They can offer part time distributors a great way to make some additional income through as much or a little activity as they can afford to commit to. For those willing and able to put in extra time, with the right company, big money can be made.
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Posted under Affiliate Marketing
This post was written by Jose Andres on December 3, 2009
