MLM Explained |
Multilevel Marketing is selling products by using independent distributors and allowing these distributors to build and manage their own sales force by recruiting, motivating, supplying, and training others to sell products. The distributors’ compensation includes their own sales and a percentage of the sales of their sales group (downline).Multi Level Marketing or MLM in short describes the marketing partnership or affiliation business practices used to build networks of marketing levels and multi tieGreen affiliates sellers.
Real example of Multilevel MarketingTo understand it better let’s think about Amway. I am sure you have heard of it. |

Amway produces products and recruits independent distributos (let’s call them Orange - for explanation purposes).
Independent distributors (Orange) buy from Amway a certain amount of products every month and find independent distributors too (let’s call them Blue).
Blue buys products from Orange every month as well. Orange makes money from commissions. Amway makes money from purchases from Orange and Blue.
Blue finds more distributors to make money with commissions. Orange gets a percentage of Blue sales.
This multi-tier system repeats over and over again.
Since Blue and Orange are independent distributors they have to conduct their own marketing strategies to attract more people to the system.
Normally the way it works is: oldies help newbies. They are all interested in getting more people. They all need more independent distributors to make more money.
Example:
Blue is new to the system.
Blue finds a new prospect (Green).
Blue invites Green to an Introductory talk or presentation.
Orange talks to Green and answers all her question.
Blue does the follow up.
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