What is MLM ?

Author: Fernando Soave

Multilevel Marketing is one of the fastest growing yet most
misunderstood methods of moving products in use today. It has been termed by many as the Wave-of-the Eighties.

But, it will go far beyond that. By the 90's more than 100
billion dollars woth of products and services has been moved
through Multilevel Marketing companies. As we are in the 21st
century watch out !

What is MLM ?

This question is quite frequently in response to a button we
often wear or we have seen wearing by others.

Let's explain it .

1. Marketing simply means moving a product or service from the manufacturer or provider to the consumer.

2. Multilevel refers to the system of compensation provided to the persons who are causing the product to move or the service to be provided.

" Multi" means more than one. "Level" means generation.

There are really 5 basic methods of moving products :

1. Retailing. ex. the drug store, the department store,.... You go into a store and buy something.

2. Direct Sales. ex. Tupperware, Avon, .....

3. Multilevel Marketing. This should not be confused with retailing and Direct Sales which commonly is.

4. Mail Order. This can be an MLM but mostly is included in the Direct Sales category.

5. Pyramid Sales. This type of Sales is to often confused with MLM. The fact is, Pyramides are illegal. The main reasons they may be illegal is their failure to move a product or to provide a valid service. If a product doesn't move, how can you even call it "marketing", let alone "Multilevel Marketing ". Multilevel it may be, but Marketing they are not !!!

Now, most objections that people have about getting into
Multilevel Marketing are due to not realising the difference
between MLM, Pyramid Sales and the Direct Sales methods of
marketing.

This is understandeble because most reputable MLM companies belong to the Direct Selling Association.

We have been conditioned to think of MLM as door to door direct
sales programs because our first encounter with them was when a
distributor knocked on our door to sell us something.

Anyway, there are some features that differentiate MLM from
Retail and Direct Sales companies and on very significant
difference is that in MLM you are in business for YOURSELF but not BY YOURSELF.

Being in business for yourself means you are buying the products
WHOLESALE from the company you are representing. This means also that you can use these products for your own consumption at
WHOLESALE PRICES.

Since we are buying products WHOLESALE we can, if we wish, sell
these products at RETAIL and make a PROFIT.

The most common misunderstanding about MLM is the notion that
you HAVE TO sell retail to be successful.

You may sell if you want to or have to due to your particulare
program procedure, but in regard to making the larger sums of
income, the real success is in building the organisation.

Let your sales come as the natural result of building the
organization.

The word "selling" triggers negative thoughts in the minds of
about 95 % of the people.

In MLM you don't need to "sell" the products in the traditional
sense of the word.

However, the PRODUCT DOES HAVE TO MOVE or NOBODY GETS PAID.

When you build an organization, you are actually building a
network through which to channel your products or services.

Retailing is the foundation of Network Marketing. Sales in MLM
or Network Marketing come from distributors SHARING with their
friends, neighbours and relatives. They never have to talk to
strangers. Network Marketing or MLM is building an organization
in which a lot of distributors all retail a little.

So, you see, its not going door to door every day calling on
strangers.

Another point that differentiates MLM from Direct Sales is the
SPONSORING of other distributors. This is called RECRUITING.

When you SPONSOR someone, you are making a COMITMENT to TEACH them how to do what you are doing, building a BUSINESS OF THEIR OWN. Sponsoring is what makes a Multilevel Marketing business so different an makes it grow.

As your organization grows, you are building toward becoming an
INDEPENDANT SUCCESFULL BUSINESS PERSON. You are your OWN BOSS.

With Direct Selling companies you work for the company. If you
decide to quit that company and move to another area, you end up having to start all over again.

In almost all of the MLM Programs you can move to another area
of the country and sponsor people without losing the volume
generated by the group you left behind.

In MLM Programs you can make a lot of money by building an
organization as your primary function.

A Multilevel Marketing Organization is not a piramid scheme. The
piramid is built from the top down and only those in at the very
beginning can ever be near the top. And the price of the
products or services get every step higher and higher, leaving
the people at the bottom broke.

In the MLM Marketing everybody starts at the bottom and has the
opportunity to build a large organisation, even larger than his
sponsor's organizationif he wants.

MLM Marketing is the solution to the distribution costs of the
most companies because there will be no more channels between the producer and the consumer. And the most part of the benefit can be paid to the distributors.

About the author:
Fernando Soave is the Editor and Publisher of the Cutting Edge
MLM Newsletter. I have been in marketing for the past 20 years
and have made my experience and knowledge in Multilevel
Marketing.

http://www.cuttingedgemlm.tk
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