Multilevel marketing (MLM), also known as "Network" marketing, are a way of selling goods or services through self-employed independent distributors. As a networker (independent distributor) you receive commissions - for both your sales of company's goods or services and those of other people you recruit to join distributors. Multilevel marketing plans usually pay commissions through two or more levels of recruits, known as distributor's "downline."
Downline is distributors recruited by you, and you receive commissions on their sales and sales of distributors they recruit.
Upline is distributors who are above you in MLM hierarchy and who receive commissions (overrides) from your sales.
To be avoided are MLM plans that are actually pyramid schemes (so called "naked pyramid scheme") in disguise - that is, plans that focus only recruiting more and more distributors, but have no substantive product at bottom of pyramid. New participants pay a fee to participate and hope to profit by recruiting others into system. Chain letters are an example.
State laws against pyramiding say that an MLM plan should only pay commissions for retail sales of goods or services, not for recruiting new distributors. However, MLM companies typically structure their payment plan so that recruiting is more profitable.
Before you start working in particular MLM, get familiar with following mainstream websites and web magazines.
You can find top Sites about Network Marketing at www.RichTrack.com.
Typical mistakes to avoid
1. The most important part of MLM is education system of MLM company, but not "magic plan" nor "magic leader" who will help you to get rich quick. The most successful companies usually have most advanced educational programs which cover people management, negotiations, sales, leadership, money management, and many more. Do not get cheated by "progressive plans" and "world leaders". Marketing plan is just part of MLM business. The small part.
2. Taking part in naked pyramid scheme. Check if your MLM Company runs a pyramid. Avoid any plan that includes commissions for recruiting additional distributors. It may be an illegal pyramid.