The Multilevel Marketing Concept, mlm

The Multilevel Marketing Concept



What is Multi-Level Marketing? 

Multi-level Marketing, or MLM, is a marketing strategy which creates a down line of distributors and a 

hierarchy of multiple levels of compensation. The sales force is compensated not only for their own 

sales but also for the sales of the people they help recruit. Firms, having a large product base, often 

cannot employ equivalent sales force; and believe they would be better off without the traditional 

approach. Hence, they implement MLM to survive competition from multi-nationals. 

MLM is also known as Network Marketing because it utilizes a network of individual customers to hit 

other potential customers. In other words, every individual customer serves as a sales representative. 

Multi-Level Marketing Vs. Pyramid Marketing

People often confuse MLM with pyramid marketing; however there is very clear distinction between the 

two approaches: pyramid marketing is about getting your money and then using you to recruit other 

distributors; MLM, on the other hand, is about moving the product through a larger network of 

distributors so that the business can increase sales volume. 

Another difference between MLM and pyramid marketing is that Pyramid marketing requires each level 

to DOUBLE before a new level is created so it isn't fair to people lower down in the levels and also 

unethical. MLM, however, awards a commission based upon the volume of product sold through own 

sales efforts as well as that of the down line organization.

Since MLM faces the risks of initiating a business that has not been tested by the customers is not 

recognized, people prefer to wait a coupe of years before joining. Hence, they also witness the 

company’s track-record and reliability.


Structure of Multi-Level Marketing

Multi-level Marketing follows a significantly different structure than Pyramid marketing: the network is 

divided into parts comprising of different number of people. Some parts of the network may comprise of 

lesser people because the initiator might not have been able to sign-up more people; however, other 

parts may have flourished due to a hard-working marketing genius have good resources. Hence, MLM 

turns out to be a fairer approach to income generation.

Growth within Multi-Level Marketing Firms

An MLM opportunity, having a wide-spread network, brings greater growth prospects as members 

become eager to introduce more people. Furthermore, those present higher up in the network are 

encouraged to share their experiences with those subordinating them. This is because improvements in 

the performance of new entrants and subordinates will result in higher profits for the seniors.

Hence, great income-earning opportunities can be availed out of Multi-level Marketing firms. The only 

key is to select one with a successful product or service; such that you would prefer for yourself.


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