What is Multilevel Marketing (MLM)?
Multilevel Marketing, or MLM, is a system for selling goods or services through a network of distributors.
The typical Multilevel Marketing program works through recruitment. You are invited to become a distributor (or contractor or consultant or associate), sometimes through another distributor of the company’s products and sometimes through a generally advertised meeting.
If you choose to become a distributor with the direct selling company, you’ll earn money both through the sales of the MLM’s products and through recruiting other distributors, by receiving a portion of the income these distributors generate.
And when those distributors recruit distributors of their own, you’ll earn money on the income they generate too.
The distributors that you sign up with your Multilevel Marketing plan and the ones they sign up in turn are called your downline. The distributor that originally recruited you and whoever is above him or her in the recruitment chain is called your upline. Often the distributor who recruits you will give you some help getting started, including training.
Successful well-known MLM businesses include Mary Kay Cosmetics, Avon, and Tupperware – and mentioning just three is truly talking about just the peak of a truly gigantic iceberg. According to the Direct Selling Association, U.S. sales totaled about $31.6 billion in 2012, with more than 74 percent of the American public having purchased goods or services through direct selling. Worldwide sales are also strong with more than $154 billion in sales.
Why is Multilevel Marketing so popular? The main reason, I think, is that most Multilevel Marketing programs operate on a “the sky’s the limit” promise with a nice bit of “easy money” thrown in. If you work hard, the MLM sales pitch says, there’s no limit to how much money you could make. And through your downline, you will actually make money doing nothing.
The cherry on top is that MLMs are usually very inexpensive to join, so becoming a distributor is much cheaper than starting a business of your own in many cases or doing something like buying into a franchise.
Multilevel Marketing plans are legal.
However, if you are considering becoming part of an MLM company, you need to investigate the opportunity thoroughly, just as you would with any other proposed business venture. Not all Multilevel Marketing plans are created equal, and some may not be MLM at all, but pyramid schemes, which are illegal.
Also Known As: MLM, Network Marketing.
Alternate Spellings: Multi-level marketing.
Examples: Because Penny worked really hard and truly believed in the product line, she was a very successful Multilevel Marketing distributor.