How MLM or Multi-Level Marketing Works

There is an awful lot of buzz being created online which talks about multi level marketing or MLM

. Anyone who has been on the net looking for a home based business idea or two has surely run across articles and websites that discuss MLMs and how they work. MLM or multi level marketing is also commonly referred to as network marketing, and it is sweeping the internet and drawing in people from all walks of life.

With this type of business opportunity, a sales rep or a distributor for an MLM company first becomes effective at selling a product or a service of some kind to a consumer. The number of customers a distributor gets depends upon the commission plan of the company, but it is typically around twenty. Most experts say that it is best to get enough customers so that you can effectively gain customers at will. Otherwise you will not be able to train those people you recruit to get their own customers. Multi level marketing companies pay distributors to 'duplicate' themselves.

You (the distributor) are responsible for recruiting and training the new sales reps or distributors you draw into the company. Those people under you are called your downline. Once your downline begins to get people to join at will, they in turn will train them how to recruit others. Next, you recruit one other person and train him and in return, he will recruit a new distributor and train him or her. You simply repeat this process in cycles until you have reached the level of income you desire.

The commission plans or compensation plans as they are called in Network Marketing are how the MLM companies reward your production as a distributor. You will purchase the product or service from the MLM company at a wholesale price and then mark it up so that you make a profit when you sell it. You also will receive a commission on all sales made by the people in your downline. As this cycle goes on with new distributors finding and training their downline, a leader will be designated who will become responsible for recruiting and training distributors as well as other leaders. This leader will earn an extra commission as a reward for his work.

The biggest commissions are set aside for those people in the company who recruit and train many leaders because these people earn a lot of money for the multi level marketing company. But, even though the leaders earn the most money, everyone does not have to achieve the top of the commission structure to earn a good income. Most compensation plans are set up so that a distributor can replace his current salary by only earning half of the available commissions.

For the person who wishes to join an MLM company as a way to run their own Home Based Business, they must choose what level they want to achieve in the structure based on results. A multi level marketing system is a very fair system in that it rewards you based on the results you achieve and not based on your resume, your looks or how well you can carry on a conversation. In order to truly succeed at network marketing, you must fulfill some very specific performance standards that are clearly stated. These standards must be achieved by everyone who wishes to reach a particular level as they are not arbitrary.

How MLM or Multi-Level Marketing Works

By: CinRupp

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