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Network Marketing - Secrets of MLM Popularity
Posted by Revolution TweetingWhy is multi-level marketing so popular today? Why is this business model worthy of consideration? I guess this business model is acceptable if you can’t find a job in the “real world” - right? Isn’t it like a pyramid scheme and illegal? You get a special bonus of swamp land in Florida just for joining!
If any of those questions came to your mind, keep on reading, before you make a big mistake.
We’ll define network marketing later, but first it’s important to look at, and anyliae some data about this industry.
This industry has expanded tremendously, with more than sixty one million people now involved all around the world. Let’s look at just the US. There are over fifteen million people in network marketing.
A tremendous number of retail goods have changed hands around the globe as a result of multi-level-marketig - over one hundred eleven billion dollars. The US number accounts for over thirty one billion dollars.
If so many people and so many companies are following this way of doing business, it’s a good idea to at least take a look at what it really is.
Just a few years ago - if you let anyone know you were into MLM, they would run for the hills, or often treat you like an outcast. This once maligned business is now widely accepted as completely legitimate, and a sought afterbusiness model that more and more companies are taking note of and incorporating into their structure?
Lots. Primarily, there’s a great deal more oversight and legislation regarding these multi-level marketing companies.
Government agencies and watchdog organizations regularly police this industry to ward off abuses.
Second, the very structure of Network Marketing provides a strong opportunity for entrepreneurship-people who have never owned a company or ran their own business can often step into this industry and be successful.
Thirdly, the MLM business model saves a heck of alot of money over more traditional distribution channels and ways of doing business - and people are interested in that - especially in an economy like this one.
So how does it all really work?
“Multi-Level Marketing is a legal system of merchandising products through multiple levels of distribution (distributors). These distributors purchase at wholesale and act as a middleman between the manufacturer and the consumer who pays retail.” This is one of the first formal definitions, published by Doris Wood of the MLMIA.
MLM is a type of direct sales – where distributors directly market their products out in the business world and community. They make commissions based upon the total dollars or volume of products and services that they sell.
Some direct sales companies just pay the distributor every time they make a sale. In MLM, not only are you compensated when your client directly purchases your product or service from you ,you’re also paid on the efforts of people that you’ve recruited to join your organization. So, you have the opportunity for leveraged and residual income - getting paid over and over for doing the work once.
Network Marketing or MLM provides people with the opportunity to build their own sales organizations, and get paid commissions based on the sales generated by your downline. By recruiting others into your organization, you build levels. Then those people build levels under them - and so on, and so on… There are many differing pay plans out there and the number of levels deep you get paid varies from company to company.
With MLM’s, your commission qualifying is based upon the number of people in your downline, the number of sales that you make, the total revenue that you bring in, and many other factors that work together in different ways - depending upon your company’s structure.
When’s the last time you saw a compensation arrangement like this in the corporte world? Unless you’re a CEO of course… Imagine if you got a job frying French fries at MacDonald’s. What are the chances that you would advance to CEO or president, and get the big bucks? Even though it’s possible, the odds are against it for the majority of people.
Not so with network marketing. The average person can - and often does - rise right up through the ranks and start making the kind of money that only officers of corporations would normaly make. The only limitation you have is that which you place upon yourself.
Why are more and more traditional companies choosing to distribute their products and services this way?
It’s a more economical way to structure a company. Most traditional companies have a long line of middlemen throughout their distribution network, and these middlemen suck up money. With MLM, these middlemen are eliminated and the people who actually do the work and make the sales are the ones who are paid the big bucks. There no glass ceiling, no discrimination, no brown nosing…You get the picture : ) There are usually no expensive marketing and advertising campaigns-network marketing companies rely on their distributors to get the product out there by word of mouth. It’s a win - win situation for everyone involved. Many people these days are turning to network marketing - why? Why is this business model worthy of consideration? I guess this business model is acceptable if you can’t find a job in the “real world” - right? Isn’t it like a pyramid scheme and illegal? You get a special bonus of swamp land in Florida just for joining!
You may be thinking some or all of these things. If you are - keep on reading. If you’re not - keep on reading.
We’ll define network marketing later, but first it’s important to look at, and analyze some data about this industry.
Network Marketing has grown into a global industry with more than 61 million men and women involved in this type of business model. In the United States alone, over 15 million people are building their home-based businesses through Network Marketing.
A tremendous number of retail goods have changed hands around the globe as a result of multi-level-marketing - over one hundred eleven billion dollars. The number of sales in the United States alone is staggering. It’s over thirty billion dollars.
Given the massive numbers of people and organizations doing business in network marketing - isn’t it worth at least looking at?
Once upon a time, if you’d mention MLM to anyone you’d get a range of responses-mostly negative. So what’s happened to make this once maligned industry into a viable business model that organizations are standing up and noticing this way of doing business and getting into network marketing as a means of distributing their product?
Lots. First of all, the oversight and laws governing network marketing companies are now much more strict.
Government agencies and watchdog organizations regularly police this industry to ward off abuses.
Second, the very structure of Network Marketing provides a strong opportunity for entrepreneurship-people who have never owned a company or ran their own business can often step into this industry and be successful.
Thirdly, the MLM business model saves a heck of a lot of money over more traditional distribution channels and ways of doing business - and people are interested in that - especially in an economy like this one.
So how does it all really work?
“Multi-Level Marketing is a legal system of merchandising products through multiple levels of distribution (distributors). These distributors purchase at wholesale and act as a middleman between the manufacturer and the consumer who pays retail.” This is one of the first formal definitions, published by Doris Wood of the MLMIA.
Multi-level marketing is a type of direct sales - companies that use distributors to directly get their product or service out there in the market place. Distributors are paid a commission based on the sale of these products or services.
Sometimes, direct sales organizations compensate their distributors only for each and every sale that the distributor makes themselves. With multi-level marketing, you get paid not only when your customer purchases a product,you’re also paid on the efforts of people that you’ve recruited to join your organization. This creates a more varied income stream through leverage and residual income.
Network Marketing or MLM provides people with the opportunity to build their own sales organizations, and to be compensated based upon the successes of their downlines.When you bring people into your organization you build levels under you. Your distributors recruit others beneath them, and on and on it goes. There are many differing pay plans out there and the number of levels deep you get paid varies from company to company.
In many Network Marketing companies, the more distributors that you have in your downline and/or the more sales you make, you’ll qualify for higher commissions or bonuses and higher ranking in the company.
Traditional business does not allow for advancement like this. Imagine if you got a job frying French fries at MacDonald’s. What are the chances that you would advance to CEO or president, and get the big bucks? It’s possible, but for most of us, it’s highly unlikely.
The structure of Multi-Level Marketing provides the opportunity for an average person, who works hard and is dedicated, to move up through the ranks- and sometimes very quickly- and make the kind of money that CEO’s make in big companies!
Why are more and more traditional companies choosing to distribute their products and services this way?
Because it’s much more cost effective to run a company that way.. Most traditional companies have a long line of middlemen throughout their distribution network, and these middlemen suck up money. With MLM, these middlemen are eliminated and the people who actually do the work and make the sales are the ones who are paid the big bucks. There no glass ceiling, no discrimination, no brown nosing…You get the picture : ) Costly advertising campaigns are a thing of the past, since each distributor is responsible for their own advertising - whether it be word of mouth or online. This has proven to be effective and lucrative for both the company and the distributor.
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