| Multiple level marketing, which is often known as multi | | | | person to build a profitable business. The idea was |
| level marketing, network marketing or MLM, is an | | | | very simple and straightforward. A distributor could |
| often misunderstood retail business model. At its | | | | recruit others to be distributors and was responsible |
| core, MLM is a direct sales business model that utilizes | | | | for training these new distributors in the business. As |
| a tiered compensation strategy. Today there are | | | | a reward for doing a good job in their training and |
| more than 4,000 active companies utilizing this model | | | | recruiting efforts, the distributor was entitled to |
| in their retail business operations. In 2009 in the U.S. | | | | receive a percentage of commission based on the |
| alone, these companies made $28.33 billion dollars in | | | | sales production of those whom they had personally |
| sales, according to figures published by the Direct | | | | recruited and trained. A proactive distributor who did |
| Selling Association. This overview is meant to give | | | | an excellent job of recruiting and equipping could now |
| you greater this business model and why it is | | | | benefit from the fruit of those efforts, as well as |
| attractive to many people who are seeking a home | | | | from their own sales production. Since that time the |
| based business opportunity. | | | | models utilized by most network marketing |
| As mentioned before multi level marketing is a direct | | | | companies allow a distributor to receive |
| sales model of doing business. Direct sales means | | | | compensation from multiple recruiting generations of |
| that the products and services a company sells are | | | | their business organization. This simply means that |
| not sold through a storefront, but instead are directly | | | | the distributor can benefit from the sales production |
| marketed to the consumer through a network of | | | | of those who were trained by those the distributor |
| independent distributors. This allows the company to | | | | had initially trained. It is this generational leverage that |
| bypass the expense of maintaining a storefront or | | | | makes the multi level marketing business model so |
| display space in a traditional retail setting. The most | | | | appealing to many home business owners. To foster |
| common form of marketing done in this type of | | | | good training and business practices, most companies |
| business is word of mouth advertising. A consumer | | | | require a minimum production level from the |
| uses the product and in turn tells others about it. | | | | distributor's business group. If the distributor is to |
| Companies utilizing this form direct marketing often | | | | receive bonuses and incentives, those pieces of |
| provide product samples that their distributors give | | | | compensation will be tied to the productivity of the |
| out to prospective customers for a try it before you | | | | group. This encourages a distributor to work hard at |
| buy it experience. A distributor receives a commission | | | | building and training their sales organization. |
| on product sales generated through their marketing | | | | Fundamentally, multi level marketing is meant to be a |
| efforts. This commission is typically the difference | | | | home based business enterprise. With start up costs |
| between wholesale cost a distributor pays and the | | | | often being less than $100, this is a business model |
| retail sales price. This compensation typically ranges | | | | that almost anyone can utilize. The most common |
| anywhere from 15-50% of the total retail sales price. | | | | mistake is that a person does not take seriously the |
| With greater levels of sales volume, the distributor is | | | | fact that this is still a business. If they do not treat it |
| normally entitled to a larger percentage of profit and | | | | as a business it will not reward them. On the other |
| other performance based bonuses. | | | | hand, those who apply themselves to their business, |
| The multiple level concept refers to a leveraging | | | | tend to do very well in this industry. |
| strategy that was first introduced to direct selling in | | | | If you are looking for a home based business that |
| the mid 1940's. This concept was introduced as a | | | | offers great long term potential, multiple level |
| way to provide greater incentive to a direct sales | | | | marketing may be the right choice for you. |