What is Multi-Level Marketing?
Multi-Level Marketing is a method where the companies use a distribution model to sell their products to consumers. Instead of offering their products directly to customers online or in stores, they employ representatives to distribute and sell their products.
Sales representatives mostly do not work from the office. They work from home and are considered business owners of the respective business. The aspect refers to each representative’s ability to recruit and train fellow people to be representatives. With MLM income comes from each personal sale and also the percentage of the sales earned by the other representatives who were recruited by you.
How does MLM work?
To understand how MLMs work, let us analyse with an example of industry jargon.
The Plan: The Company’s marketing and compensation plans are the important focus of the business.
Sponsor: The representative who directly recruits another person into the business is called the sponsor.
Recruit: The person who is brought into the business by a sponsor is called a recruit. They are usually trained by their sponsor.
Down line: The members you have recruited as well as those your recruits have brought into the business.
Up line: These are the sponsors who came in before you.
The plan outlines the ways the representative earns money. The commission on sales made by you, your team and bonuses paid by the companies and the commission based on sales volume.
Advantages of MLM:
Most MLM companies offer the opportunity to the average person to have their own “business” without putting up with huge investments.
• Business owners need not worry about advertising costs.
• The cost of setting up is considerably cheaper.
• Physical store is not required.
• An average person can become a “Business Owner”.
What are the plans for using MLM in your business?