Multi Level Marketing: Check If It Is Fraudulent Or Genuine

Making a noticeable position in marketing field is a tough job

. However, MLM has brought in several marketing tactics, giving a new boom to Marketing field. But, before investing in such marketing schemes one must first understand the scheme completely. A lot of these schemes are fraudulent and hence it is absolutely imperative to go through every detail of such schemes before investing in them.

So we first need the answers to the question- what is MLM or what is MLM business?

MLM is a marketing strategy that involves a set of distributors, who work for a marketing company. The company offers these distributors a certain share of the sales profit made on each item sold. These distributors in turn can employ a few more distributors who again get a part of the profit made but a lesser percentage than the distributor who employed them.

This way employment happens in a pyramidal structure, the ones at the top getting the highest percentage of the profit. Also every time a distributor includes a new employee in the chain he gets a commission.

This method of marketing is very convenient in an environment, where there are a lot of closed communities. By employing just one person from a group information about a product can be spread by word of mouth. This forms a large network amongst the community. The network thus formed is what gives the marketing procedure the name Network Marketing.

The companies found ways of selling off the products to the people by getting the products to your doorstep. What could not be done by shops and stores were done through the dealers.

MLM marketing is also a means of advertising. The production companies thus hire dealers on a mass scale to propagate their products through them. Information about several new and old products can be easily relayed into the community which otherwise might not have been possible. The dealers earlier took the products door to door so as to get the job done. The procedure was time taking and strenuous for the dealers. With the advancement of technology they found a way to reduce the burden.

The internet provides the dealers with a welcome relief. They no longer need to personally deal with the consumers. All they have to do is approach them online. Sending a viral mail or publishing an advertisement can draw in many consumers.

Often in such schemes after a point the pyramid becomes saturated which means no more new employees can fit in. After a while the entire structure collapses leaving the ones at the bottom of the pyramid empty handed. Only the ones at the extreme top tiers actually escape unscathed. We, the investors often find ourselves at the bottom of such structures and hence wind up losing our wealth. Therefore one must exercise great caution before investing in such schemes.

Usually the pyramid holds up this means that the business flourishes. Understanding the dealer system tells us what MLM business is. So, being a part of an MLM business can be quite a profitable for you if you know what you are doing.

by: Jared Smith

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