What is MLM and its benefits

Spread the love

ALL About MLM

WHAT IS MLM?

Multilevel marketing (MLM) refers to a strategy used by some direct sales companies to sell products and services. MLM encourages existing members to promote and sell their offerings to other individuals and bring new recruits into the business. Distributors are paid a percentage of their recruits’ sales. New recruits become the distributor’s network or downline and are, in turn, encouraged to make sales to earn money.

KEY TAKEAWAYS

Multilevel marketing is a legitimate business strategy used by some direct sales companies .
Existing members are encouraged to promote and sell their offerings to other individuals and bring on new recruits.
Participants are paid a percentage of their recruits’ sales.
Members at all levels receive some form of commission, which means the more you recruit , the more you earn.
The FTC investigates MLM programs to ensure they don’t operate as pyramid schemes, which are illegal.

MLM , network marketing . direct selling

How Multi-Level Marketing Works

To understand how MLM works, think of a pyramid. In our example, Alice is the first independent distributor hired directly by Direct Marketing Company. Alice becomes the top of the pyramid.

Alice recruits five independent distributors, who each turn around and recruit five more independent distributors, and so on. This fills out the pyramid that Direct Marketing Company relies upon to sell its products.

Terms used in MLM

Here is a list of some terms used in multi-level marketing:

Active

If a distributor generates a certain amount of sales or recruits a certain number of new distributors, they can maintain the title of ‘Active.’ Customer purchases and distributor purchases are equally acceptable. A compensation plan qualifier or compression metric is typically active.

Affiliate

An affiliate is someone who has obtained marketing materials and signed an agreement. This program is a marketing strategy in which third parties or affiliates boost product sales by utilising their own marketing techniques in exchange for a commission.

Bonus

Business owners may give distributors an additional benefit in addition to their commission based on their performance. Such benefits could take the form of money or other rewards. A sales representative in a multi-level marketing company receives a bonus for bringing in new clients or hiring new recruits. There are incentives available at every level of MLM.

Level commission

Distributors earn level commissions based on the sales of their recruits in their downline. A distributor’s payline is made up of all the people from whom he or she earns a commission. The commission percentages for each level is the same for each level in its most basic form .

Compensation plan

A compensation plan is a method of paying distributor commissions based on personal sales along with those in the downline. Depending on the compensation plan chosen, distributors receive commissions based on their own sales and the sales of those under them. Some of the most important factors to consider while choosing a compensation plan include product or service, training and marketing, existing laws in the market and product cost to selling price ratio.

Downline

Downline is the network of members a distributor recruits. It can also include those networks that are associated with a distributor’s recruits. A member who joins the company or comes under a distributor can also be eligible for commissions paid to their upline.

Frontline

Most personally enrolled downlines make up the frontline. Frontline members earn a distributor’s commission if they meet the company’s compensation plan. In MLM companies, distributors receive rewards for recruiting new members.

Hybrid

A compensation plan that combines the features of two or more plans. Hybrid plans offer high-income opportunities to members since they combine the benefits of several plans. In a hybrid plan, the MLM company often makes good profits.

Upline

Uplines are the people or distributors above someone in an MLM business. The upline of an MgrowLM distributor also receives compensation for their sales. Uplines find new prospects for their downlines and help them in the process.

Benefits of MLM

MLM plans are low-risk ways to start a business and boost sales. Here are some of the benefits of MLM:

Possibility of good income: To sell their products directly to their end-users, MLM companies hire a network of independent distributors. One good way to make a good profit is to hire more distributors who also sell the product, i.e., the downline. Distributors in someone’s downline can also earn commissions on sales.
Lower sales expenses: By having independent distributors, the company does not pay fixed salaries to them. Instead, companies pay commissions when they make sales. This helps save up on sales expenses.
Less inventory: Modern MLM companies take advantage of the tools and technology they have at their disposal. They make use of Internet telephony, dropshipping ability, access to high Internet, conference lines and consumer leads. A business that does not take care of inventory products becomes more responsive to market conditions.

If you are new to network marketing or are considering network marketing, in today’s economy it will be the best decision you could make.

The opportunities have never been greater for success than it is now with all the resources available online.

To be really successful in network marketing it is very important to understand why you should even bother.

I decided that to help you with either your belief or with what prospects say, you will have some great information to get you motivated and on the right path.

Here are 20 reasons why network marketing may be your best option, though I could give you many, many more.

1. Work From Anywhere: This has been one of Americans biggest dreams is the possibility to be able to work on their laptop from anywhere around the world. To me this is priceless. As long as you can get internet connection you can run your business. If anything changes in your life you just move to another state, city, etc. and you business is portable because your business is portable.

2. Your Own Schedule: This is a big one for me. If I have an appointment I do not have to ask for time off work from a regular job. Because you can set your own schedule, it is also very easy to not work your business in network marketing so you must become disciplined if you want to grow the business. You only get out of it what you are willing to put into it. In a traditional business the same holds true as well, however, you have a far greater investment at risk.

3. Low Cost of Entry: With network marketing companies you can start with just a computer and a small investment to get started. Some have even started with no money to invest. Only time and hard work. If you were considering starting a traditional business, generally speaking, you are looking at $50,000 minimum investment, just to open the doors. Franchise type of business would even be a far greater investment of $100K, or more and most of the owners do not even start to see a profit for over 5 years. My question to you would be: Which would you rather invest, say a small amount of $1000 or $50,000 or more?

4. No Employees: This in itself should make you take a serious look at network marketing. There are no payroll worries, tax worries, workers compensation worries like you would have in a traditional business that are all cost associated with employees. No one asking for salary increases or just plain old making sure others are getting the work done for you. The only employee you need to worry about is yourself.

5. No Billing/Account Receivables: You do not have to worry about billing any of your customers, or collecting any money, that is all handled online, and even if you sell physical products, the products are drop shipped for you with most companies. In a traditional business sometimes you wait 90 days or more to collect their money.

6. Tax Benefits From A Homebased Business: This is a huge benefit. With a home based business you will receive some of the same tax breaks that the rich are already taking advantage of. You can have access to over 250 tax incentives that rich people know about and take advantage of! The tax benefits alone are generally greater than the cost to get started.

7. There is No Discrimination Between Men/Women/Age/Race: Everyone who enters network marketing has the same opportunity as the next person to succeed. I have even heard of someone that was bedridden becoming successful in their network marketing business.

8. No Commuting: Just imagine the time and money you would save from not having to commute back and forth to your business or day job. One thing we can never get back is time. Time is something we seem to never have enough of. I personally do not consider sitting in rush hour traffic a good use of my time.

9. Security: We hear everyday of companies laying employees off. Cut backs. There is no such thing as job security when working for someone else. With the shrinking job market and technological advances leading to fewer and fewer people needed to do the same job as there once was. What’s more secure…having one income stream with a job where you could be outsourced or downsized in an instant, or additional income coming from a network marketing business? When you have your own network marketing business you have the stability of your network. Yes, even in network marketing, there are companies that come and go, but those companies, however, can not take your network. That is your security in this business.

10. Residual Income: Boy, this is priceless. I hope you can understand this amazing benefit and the power of it. Network marketing allow you to get paid a residual income, even when you are not working, plus it can grow month to month. Imagine when you retire and you still have that residual income coming in for you.

11. Training Already In Place And Readily Available: Because Network Marketing is a system which has many independent distributors, the companies typically have training available at your fingertips. Why not learn from those that have already proven there success.

12. Receive The Help, Encouragement, and Support From Others In The Same Profession: I have benefited so much from this. You will find that everyone is willing to help each other to succeed. Find yourself a mentor to follow and work with. Generally in America everyone is out for themselves, clawing their way to the top of the ladder. You will find network markets different. Everybody helps everybody and you will find that you will be doing the same in a very short time.

13. Personal Growth: This is big in myand a synonymous with network marketing. The personal growth you must experience along with the growth of your business is essential. You must grow, especially if you want a large income. You must grow to become the person that helps others, encourages others, and helps others to also get what they want out of life. If you don’t grow then you will become stagnant.

14. You Build Social Skills: You become a better person, which improves so many other areas of your life. When you build your social skills other look forward to working with you and being around you.

15. Allows You To Help Others On A Massive Scale: The ripple effect that your business can have on others can be larger than you could ever imagine. Your personal impact can touch more people than you will ever even know about. To people who love to help others this is a huge benefit. This reason should be at the top of your priority list.

16. Quickly Profitable: Unlike traditional businesses, which generally speaking take 3-5 years before they even think about seeing a profit, in network marketing, depending on what you are doing, you could see a return in days.

18. Build Your Business By Using The Internet: The internet is changing the world as we use to know it. The possibility of reaching a greater audience for your business is just at your finger tips. Here you can focus on those who are only interested in what you are selling. This makes any advertising cost much lower. On the other hand the cost for a traditional business can be far greater than reaching out to people one at a time .

19. Ability To Work In A Stress Free Environment: Today people are working in a FEAR based environment . Employers can pay less and require more, and this is happening every day. With network marketing you are working from the comfort of your home, and the fear and stress are far less. You are creating your own dream, not someone else’s dream.

20. Ability To Involve Your Kids: Since you can work from home, you can involve your kids, and teach them a strong work ethic and social skills. Working around your schedule is a plus in order to spend more time with your kids taking them to that ball practice, with you being able to stay and watch.