Multilevel Marketing is one of fastest growing yet most misunderstood methods of moving products in use today. It has been termed by many as Wave-of-the Eighties.
But, it will go far beyond that. By 90's more than 100 billion dollars woth of products and services has been moved through Multilevel Marketing companies. As we are in 21st century watch out !
What is MLM ?
This question is quite frequently in response to a button we often wear or we have seen wearing by others.
Let's explain it .
1. Marketing simply means moving a product or service from manufacturer or provider to consumer. 2. Multilevel refers to system of compensation provided to persons who are causing product to move or service to be provided. "Multi" means more than one. "Level" means generation.
There are really 5 basic methods of moving products : 1. Retailing. ex. drug store, department store,.... You go into a store and buy something. 2. Direct Sales. ex. Tupperware, Avon, ..... 3. Multilevel Marketing. This should not be confused with retailing and Direct Sales which commonly is. 4. Mail Order. This can be an MLM but mostly is included in Direct Sales category. 5. Pyramid Sales. This type of Sales is to often confused with MLM. The fact is, Pyramides are illegal. The main reasons they may be illegal is their failure to move a product or to provide a valid service. If a product doesn't move, how can you even call it "marketing", let alone "Multilevel Marketing". Multilevel it may be, but Marketing they are not !!!
Now, most objections that people have about getting into Multilevel Marketing are due to not realising difference between MLM, Pyramid Sales and Direct Sales methods of marketing.
This is understandeble because most reputable MLM companies belong to Direct Selling Association.
We have been conditioned to think of MLM as door to door direct sales programs because our first encounter with them was when a distributor knocked on our door to sell us something.
Anyway, there are some features that differentiate MLM from Retail and Direct Sales companies and on very significant difference is that in MLM you are in business for YOURSELF but not BY YOURSELF.
Being in business for yourself means you are buying products WHOLESALE from company you are representing. This means also that you can use these products for your own consumption at WHOLESALE PRICES.
Since we are buying products WHOLESALE we can, if we wish, sell these products at RETAIL and make a PROFIT.
The most common misunderstanding about MLM is notion that you HAVE TO sell retail to be successful.
You may sell if you want to or have to due to your particulare program procedure, but in regard to making larger sums of income, real success is in building organisation.