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Multilevel Marketing is one of the fastest growing yet most misunderstood methods of moving products in use today. It has been termed by many as the Wave-of-the Eighties.
But, it will go far beyond that. By the 90's more than 100 billion dollars woth of products and services has been moved through Multilevel Marketing companies. As we are in the 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.
- Marketing simply means moving a product or service from the manufacturer or provider to the consumer.
- Multilevel refers to the system of compensation provided to the persons who are causing the product to move or the service to be provided.
There are really 5 basic methods of moving products:
- Retailing. ex. the drug store, the department store,.... You go into a store and buy something.
- Direct Sales. ex. Tupperware, Avon, .....
- Multi level Marketing. This should not be confused with retailing and Direct Sales which commonly is.
- Mail Order. This can be an MLM but mostly is included in the Direct Sales category.
- Pyramid Sales.This type of Sales is to often confused with MLM. The fact is, Pyramids 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 "Multi level Marketing". Multi level it may be, but Marketing they are not!!!
This is understandable because most reputable MLM companies belong to the 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 the products WHOLESALE from the 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 the notion that you HAVE TO sell retail to be successful.
You may sell if you want to or have to due to your particular program procedure, but in regard to making the larger sums of income, the real success is in building the organization.
Let your sales come as the natural result of building the organization.
The word "selling" triggers negative thoughts in the minds of about 95 % of the people. In MLM you don't need to "sell" the products in the traditional sense of the word.
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