“It’s a pyramid,” “the person on the top makes all the money," and “the new person gets nothing.” For many people these are the first things that come to mind when they hear about MLM or multi level marketing. Let’s try to clarify the issue in the following paragraphs, and show that MLM can be an effective way of marketing products to a large audience.
The Difference Between Network Marketing and Direct Sales
Multi level marketing is a different way of selling products or services. Companies in this industry don’t talk about selling, but about sharing a business opportunity or products with others, either individuals or business owners.
A MLM company does not want their products to be sold in retail stores. But products are sold through a network of agents, representatives or distributors, who all have a kind of timeshare in the company, for as long as they pay their monthly participation in the company.
MLM companies want people to use their products, and share their feelings and results about the products or services with others, but also want their agents to share business opportunities with other individuals. This is how the company and the individuals involved build on their network of participants.
Word of Mouth Advertising
“Have you already seen that new action movie?”, “Did you try that new restaurant down-town?”, “Have you listened to the latest MP3 from ….?” MLM rewards for sharing experiences with other individuals. Sharing creates curiosity, sales and above all partnerships with trusted customers.
Sharing is transferring experiences to a third party. Word of mouth advertising is powerful and highly effective, but one is never rewarded for the promotional work.
In most MLM programs recruitment of the individual comes first before the use of products or services. In direct sales companies the customer is attended first, and maybe later business opportunities might be shared. This is the main difference between multi level marketing and direct sales companies.
Some Successful Multi Level Marketing Companies
This industry exists for many decades and has proven to offer solid partnerships with individuals. Some of the companies who have been in business for many years are Amway, Herbalife, Avon, Mary Kay, Tupperware, Shaklee, Usana, Xango, GDI or Global Domain International and Melaleuca. Often publicly listed and the most serious players are part of the DSA, Direct Sales Association of America. An organization which protects distributorships on a global scale. DSA functions as a body between individual, company, industry and often governments.
Network Marketing can be an exciting and often rewarding form of business. Do proper research before venturing into any business opportunity, whether MLM or traditional business.
Quote:
"The strongest principle of growth lies in the human choice." - George Eliot
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