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Multi-Level Marketing Review

Why is multi-level marketing so popular today? Why should you spend your valuable time considering and researching this business model? This is just for people who can't find a real job - right? Isn’t it like a pyramid scheme and illegal? You get a special bonus of swamp land in Florida just for joining!

If any of those questions came to your mind, keep on reading, before you make a big mistake.

Before we get into the definition of what Network Marketing – also called Multi-Level-Marketing-is, and what it isn’t, let’s look at some interesting facts and figures about this exploding industry.

There are over fifty nine million people around the planet - involved now in the multi-level marketing industry. There's been huge growth over the last few years. Over 14,000,000 people in the United States alone, are in a home based business, specifically network marketing.

More than $111 billion dollars of retail goods were sold globally through the Network Marketing industry! Over $31 billion dollars of those sales were here in the United States!

Given the massive numbers of people and organizations doing business in network maketing - isn't it worth at least looking at?

Once upon a time, if you’d mention MLM to anyone you’d get a range of responses-mostly negative. So what’s happened to make this once maligned industry into a viable business model that more and more companies are taking note of and incorporating into their structure?

Much in every way. For one there are more stringent controls and regulations on MLM companies.
Agencies like the Federal Trade Commission keep a sharp eye on this industry to keep the schemers and scammers out.

Secondly, MLM is a very different structure than corporate america, and provides much more opportunities for self employment-people who have never owned a company or ran their own business can often step into this industry and be successful.

Thirdly, the MLM business model saves a heck of alot of money over more traditional distribution channels and ways of doing business - and people are interested in that - especially in an economy like this one.

What are the nuts and bolts of this type of business?

“Multi-Level Marketing is a legal system of merchandising products through multiple levels of distribution (distributors). These distributors purchase at wholesale and act as a middleman between the manufacturer and the consumer who pays retail.” This is one of the first formal definitions, published by Doris Wood of the MLMIA.

Multi-level marketing is a type of direct selling – companies that use distributors to directly get their product or service out there in the market place. They make commissions based upon the total dollars or volume of products and services that they sell.

Some direct sales companies just pay the distributor every time they make a sale. With multi-level marketing, you get paid not only when your customer purchases a product,you also get paid from the efforts of people who join under you in your organization. So, you have the opportunity for leveraged and residual income - getting paid over and over for doing the work once.

Network Marketing or MLM gives you the opportunity to build a sales organization, and to be compensated based upon the successes of their downlines.By recruiting others into your organization, you build levels. Your distributors recruit others beneath them, and on and on it goes. How far down the levels that you will be allowed to collect commissions depends on the structure of the particular company you are working for.

With MLM's, your commission qualifying is based upon the number of people in your downline, the number of sales that you make, the total revenue that you bring in, and many other factors that work together in different ways - depending upon your company's structure.

When's the last time you saw a compensation arrangement like this in the corporte world? Unless you're a CEO of course... Imagine if you got a job frying French fries at MacDonald’s. What are the chances that you would advance to CEO or president, and get the big bucks? Even though it's possible, the odds are against it for the majority of people.

Not so with network marketing. The average person can - and often does - rise right up through the ranks and start making the kind of money that only officers of corporations would normaly make. The only limitation you have is that which you place upon yourself.

Why are more and more traditional companies choosing to distribute their products and services this way?

Because it's much more cost effective to run a company that way.. Most traditional companies have a long line of middlemen throughout their distribution network, and these middlemen suck up money. With MLM, these middlemen are eliminated and the people who actually do the work and make the sales are the ones who are paid the big bucks. There no glass ceiling, no discrimination, no brown nosing...You get the picture : ) There are usually no expensive marketing and advertising campaigns-network marketing companies rely on their distributors to get the product out there by word of mouth. This has proven to be effective and lucrative for both the company and the distributor.Why is multi-level marketing so popular today? Why should you even bother to consider this business model? Isn't this just for people who can't find a real job? Aren't those "companies" just scams to take people's money? You get a special bonus of swamp land in Florida just for joining!

You may be thinking some or all of these things. If you are - keep on reading. If you're not - keep on reading.

We'll define network marketing later, but first it's important to look at, and analyze some data about this industry.

This industry has expanded tremendously, with more than sixty one million people now involved all around the world. Over 14,000,000 people in the United States alone, are in a home based business, specifically network marketing.

A tremendous number of retail goods have changed hands around the globe as a result of multi-level-marketing - over one hundred eleven billion dollars. The number of sales in the United States alone is staggering. It's over thirty billion dollars.

If so many people and companies are doing business in the multi-level marketing industry, isn't it worth having the intellectual honesty to really research this business model?

Once upon a time, if you'd mention MLM to anyone you'd get a range of responses-mostly negative. This once maligned business is now widely accepted as completely legitimate, and a sought after business model that more and more companies are taking note of and incorporating into their structure?

Much in every way. For one there are more stringent controls and regulations on MLM companies.
Government agencies and watchdog organizations regularly police this industry to ward off abuses.

Second, the very structure of Network Marketing provides a strong opportunity for entrepreneurship-in many cases, people are getting into the MLM business, who have never owned their own company or ran their own organization.

Thirdly, the MLM business model saves a heck of a lot of money over more traditional distribution channels and ways of doing business - and people are interested in that - especially in an economy like this one.

What are the nuts and bolts of this type of business?

"Multi-Level Marketing is a legal system of merchandising products through multiple levels of distribution (distributors). These distributors purchase at wholesale and act as a middleman between the manufacturer and the consumer who pays retail." This is one of the first formal definitions, published by Doris Wood of the MLMIA.

MLM is a type of direct sales - where distributors directly market their products out in the business world and community. Distributors are paid a commission based on the sale of these products or services.

Some direct sales companies just pay the distributor every time they make a sale. In MLM, not only are you compensated when your client directly purchases your product or service from you ,you also get paid from the efforts of people who join under you in your organization. So, you have the opportunity for leveraged and residual income - getting paid over and over for doing the work once.

Multi-level marketing provides people with the opportunity to build their own sales organizations, and to be compensated based upon the successes of their downlines.By recruiting others into your organization, you build levels. Your distributors recruit others beneath them, and on and on it goes. How far down the levels that you will be allowed to collect commissions depends on the structure of the particular company you are working for.

In many Network Marketing companies, the more distributors that you have in your downline and/or the more sales you make, you'll qualify for higher commissions or bonuses and higher ranking in the company.

When's the last time you saw a compensation arrangement like this in the corporate world? Unless you're a CEO of course... If you get a job flipping burgers at Burger King, what are the chances of you ever rising to the highest ranks and actually being able to take part in the profit sharing at high levels? It's possible, but not probable - right? It's possible, but for most of us, it's highly unlikely.

The structure of Multi-Level Marketing provides the opportunity for an average person, who works hard and is dedicated, to move up through the ranks- and sometimes very quickly- and make the kind of money that CEO's make in big companies!

So, why are more and more organizations choosing this business model as a means of distribution?

It's a more economical way to structure a company. Most traditional companies have a long line of middlemen throughout their distribution network, and these middlemen suck up money. With MLM, these middlemen are eliminated and the people who actually do the work and make the sales are the ones who are paid the big bucks. There no glass ceiling, no discrimination, no brown nosing...You get the picture : ) There are usually no expensive marketing and advertising campaigns-network marketing companies rely on their distributors to get the product out there by word of mouth. It's a win - win situation for everyone involved.