MLM stands for Multi Level
Marketing and is also known as Network Marketing.
A company is considered MLM where the products
or services are distributed by independent
contractors also known as distributors. These
distributors are compensated based on their
own sales as well as the sales of other distributors
they have recruited and trained. The terms
"multi level" and "network"
come from this concept of recruiting and training
a huge group of distributors (also known as
a downline) as your own sales force within
this company.
The idea, of course, is to build a huge
downline that will a mass a large customer
base. Obviously, the person who has the
most customers in his/her network is compensated
the best. Compensation plans very from company
to company but if you build your downline
the right way you can reap a huge reward.
The problem in network marketing
arises when people focus solely on recruiting
recruiters and training them to recruit. Neglecting
to acquire customers and to train your downline
to do the same results in no compensation.
Legitimate MLM companies only payout when
customers are acquired not when a downline
distributor is acquired. A lot of the negativity
towards network marketing arises because of
lack of understanding of this one issue.
Old and new recruits alike
should treat their mlm venture just like a
business and focus and both building a downline
(sales force) and training them to acquire
customers to build a huge customer base. Network
marketers should seek out the proper mlm training
to best set themselves up for success!
