The Definition Of MLM

So what is this MLM stuff all about?

Multi-level marketing (MLM), also known as Network Marketing, is a marketing strategy that compensates promoters of direct selling companies not only for product sales they personally generate, but also for the sales of others they introduced to the company. The products and company are usually marketed directly to consumers and potential business partners by means of relationship referrals and word of mouth marketing.

Relationship referrals and word of mouth marketing: That sounds pretty simplistic. But the reality is that it not that simple.

What is simple though is becoming and chartered member of the NFL Club... the No Friends & Family Club. It is so easy to get into this organization. All you have to do is ask all those with whom you are in a relationship to sit through a business presentation, try a product or service "just to do you a favor" and all those relationships will be down the tube. Your friends and family will start running when they see you. They will avoid you at all costs.

So while word of mouth marketing sounds simple, although he concept may be, in actuality, to find people that won't avoid you like the plague is very difficult indeed.

But tweak your marketing philosophy just a bit and you will discover an entirely different view to the world of Network Marketing. The key is to find your target market. Once this is obtained, you will have clients coming to you asking for your product and/or service.

So how does this all work?

Independent, nonsalaried salespeople of multi-level marketing, referred to as distributors (or associates, independent business owners, dealers, franchise owners, sales consultants, consultants, independent agents, etc.), represent the parent company and are awarded a commission based upon the volume of product sold through each of their independent businesses (organizations).

Independent distributors develop their organizations by either building an active customer base, who buy direct from the parent company, or by recruiting a down-line of independent distributors who also build a customer base, thereby expanding the overall organization. Additionally, distributors can also earn a profit by retailing products they purchased from the parent company at wholesale price.

Earlier, I mentioned to you the concept of target marketing. Remember the committed clients that are a natural consequence of this type of successful marketing? Out of those committed clients you will just naturally find those that are so passionate about your product or service that they want to become a business partner. And the retention rate of people who get involved with your company that are already product users is very high. This is so very important because more often than not, people are dropping off your team faster than you can find new interested business partners. So in essence, you are taking one step forward and 2 steps back. This will get very discouraging very fast; thus the very low success rate in this industry.

OK. But so how is the money made?

Distributors earn a commission based on the sales efforts of their organization, which includes their independent sale efforts as well as the leveraged sales efforts of their down-line. This arrangement is similar to franchise arrangements where royalties are paid from the sales of individual franchise operations to the franchiser as well as to an area or region manager. Commissions are paid to multi-level marketing distributors according to the company’s compensation plan. There can be multiple levels of people receiving royalties from one person's sales.

There are many different compensation plans but we'll save that for another time.

If you are not looking to join any particular company and are already a member of a network marketing company, then visit www.FreeMLMsuccessReport.com and learn more about this successful marketing system.