What is MLM ?

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 .
1. Marketing simply means moving a product or
service from the manufacturer or provider to the
consumer.
2. Multilevel refers to the system of compensation
provided to the persons who are causing the
product to move or the service to be provided.
“Multi” means more than one.
“Level” means generation.
There are really 5 basic methods of moving
products :
1. Retailing.
ex. the drug store, the department store,….
You go into a store and buy something.
2. Direct Sales.
ex. Tupperware, Avon, …..
3. Multilevel Marketing.
This should not be confused with retailing and
Direct Sales which commonly is.
4. Mail Order.
This can be an MLM but mostly is included in the
Direct Sales category.
5. Pyramid Sales.
This type of Sales is to often confused with MLM.
The fact is, Pyramides 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 “Multilevel Marketing”.
Multilevel it may be, but Marketing they are not
!!!
Now, most objections that people have about
getting into Multilevel Marketing are due to not
realising the difference between MLM, Pyramid
Sales and the Direct Sales methods of marketing.
This is understandeble 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
particulare program procedure, but in regard to
making the larger sums of income, the real success
is in building the organisation.
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.
However, the PRODUCT DOES HAVE TO MOVE or NOBODY
GETS PAID.
When you build an organization, you are actually
building a network through which to channel your
producths or services.
Retailing is the foundation of Network Marketing.
Sales in MLM or Network Marketing come from
distributors SHARING with their friends,
neighbours and relatives. They never have to talk
to strangers. Network Marketing or MLM is building
an organization in which a lot of distributors all
retail a little.
So, you see, its not going door to door every day
calling on strangers.
Another point that differentiates MLM from Direct
Sales is the SPONSORING of other distributors.
This is called RECRUITING.
When you SPONSOR someone, you are making a
COMITMENT to TEACH them how to do what you are
doing, building a BUSINESS OF THEIR OWN.
Sponsoring is what makes a Multilevel Marketing
business so different an makes it grow.
As your organization grows, you are building
toward becoming an INDEPENDANT SUCCESFULL BUSINESS
PERSON. You are your OWN BOSS.
With Direct Selling companies you work for the
company. If you decide to quit that company and
move to another area, you end up having to start
all over again.
In almost all of the MLM Programs you can move to
another area of the country and sponsor people
without losing the volume generated by the group
you left behind.
In MLM Programs you can make a lot of money by
building an organization as your primary function.
A Multilevel Marketing Organization is not a
piramid scheme.
The piramid is built from the top down and only
those in at the very beginning can ever be near
the top. And the pirce of the products or services
get every step higher and higher, leaving the
people at the bottom broke.
In the MLM Marketing everybody starts at the
bottom and has the opportunity to build a large
organisation, even larger than his sponsor”s
organizationif he wants.
MLM Marketing is the solution to the distribution
costs of the most companies because there will be
nomore channels between the producer and the
consumer. And the most part of the benefit can be
paid to the distributors.
2003