The Multi Level Marketing Business System

MLM, or Multi Level Marketing, when combined with the Internet, creates a powerful formula for growing a successful home based business and achieving financial freedom.

My objective in this article is to briefly explain what the multi level business model is and what it is not since it is used by hundreds of companies to move their goods and services from production to the end consumer.

You can only make an informed educated decision as to whether or not this business model if right for you if you have the necessary information upon which to make that decision.  I hope to provide some of that information in this article.

Multi Level Marketing is simply a business system for moving products and services from production to the consumer using independent distributors with a multi level commission payout plan.  Since distributors can recruit other distributors and establish teams that work together, this business model is often also called Network Marketing.

There are many myths about MLM companies, including that they are scams or illegal pyramid schemes.  For true Multi Level Marketing companies, nothing could be further from the truth.  Unfortunately, those who believe these myths, simply do not understand how Multi Level Marketing companies work.

First you need to know that Multi Level Marketing companies are 100% legal and many large multi-million dollar companies employ this business system to move their products and services from production to the consumer.  The pyramid shape associated with MLM companies is the same shape as almost all non MLM companies.  There are always more workers in the lower ranks than there are senior managers, Vice Presidents, and CEOs.  If companies were not of this shape, they would collapse.

Some of the best known MLM companies include Amway, Shaklee, Tupperware, Princess House, a subsidiary of Colgate Palmolive, A.L. Williams, Mary Kay Cosmetics, U.S. Sprint, MCI, Melaleuca, and NSA.   These companies have been around for decades.

MLM is an explosive growth field and there are hundreds more MLM companies that, just like other companies, include some that are good and some that are not so good.  Today, more and more Fortune 500 companies are even embracing Network Marketing for a portion of their marketing portfolio!

So what’s the big attraction to MLM companies and programs?  Well, it represents a wonderful opportunity for the “little guy” to start his own business on a part time basis and make a whole lot of  money provided he or she is willing to put in some work!  This is not a get rich quick scheme and work is involved, no matter what some MLM recruiters would like you to believe.

The magic of MLM is that independent distributors earn commissions not only for their own efforts, but also on the efforts of other distributors that they recruit into the business.  Earning 1% of a hundred peoples efforts is always better than earning 100% on your own efforts, as John Paul Getty noted.

The term “multi level” comes from the process where by one distributor recruits other people to become distributors and the new distributors are placed under them in what is known as a downline.  Each distributor is paid a retail commission on the products they sell themselves, and a wholesale commission on the products their downline sells (down to some designated level).

The more people a distributor can recruit for his downline, the larger will be their total commissions.  The number of levels that a distributor will earn override commissions on will depend upon the company’s compensation plan but five to seven or more levels is not unusual.  These wholesale override commissions can quickly add up for distributors with a large downline.

A strong incentive is thus created not only for a distributor to recruit more distributors for their downline, but also to train them to move products as well.  Thus a successful distributor will want to duplicate their success by teaching their downline members how to be successful.  By making their downline members successful, they make themselves more successful.

Those who can successfully recruit, train, and retain can create small fortunes and develop a large stable residual income that will support them for years to come.  Although not easy, it can be quite rewarding.

Millions of people are discovering the advantages of being their own boss and working from home with the MLM business model.  A basic computer, telephone, fax machine, a HUGE ambition, and the knowledge of how to proceed to grow your business are all it really takes!