What is MLM Network Marketing?
Basically marketing strategies are composed of two main strategies
1. Single-level Marketing
2. Multi-level Marketing
Single-level marketing strategy is simple marketing strategy in which sale person is rewarded for selling the product only, and not for recruiting the other sale persons. While in multi-level marketing, the sale person is not only rewarded for the sale that he generates personally but also from the sale of others that he recruits and hence a chain of sale force is generated.
Further multi-level marketing includes the Network Marketing and Referral Marketing (ways to promote and sell his product to the new customers by oral communication). Mostly salespersons are expected to sell the product directly to the consumer through spoken words they relates the Multi-level marketing with the direct selling, although MLM is only one type of direct selling.
In start almost all companies were using the single-level marketing like Avon, Electrolux and Tupperware etc but with the passage of time as the business expanded globally, there were need of some more techniques to capture the market more effectively and hence MLM is one of the most effective technique that is used by these companies now-a-days. But MLM is the hottest issue of today’s business world with respect to its status.
The main contrast of view is consideration of MLM as a pyramid scheme that is totally a misconception. Then what is pyramid scheme? And why it relates to MLM? Basically pyramid scheme is an illegal, non-sustainable and risky business model that can cost a lot of people a lot of money. In a pyramid scheme, a member has to pay for joining and he is able to recover its money only by convincing other people to join up and to part with their money as well.
Actually in pyramid scheme there is no actual selling of any real product and that’ why it is considered an illegal activity. While in MLM, the actual product is in physical existence that is given to the distributors for sale not by recruiting process. Actually in multi-level marketing the investors or distributors make their money by selling the MLM products to other MLM distributors and if they are not already members of their MLM company then first sign them up, in this way the investors are in position to earn more money not only by their on sale but also get a handsome percentage of the income that is generated by those investors that have brought in MLM program due to their help.
Every MLM company has different compensation plans having different levels to motivate the investors.Hence, MLM provide the legal home based opportunity to the investors to earn a lot with negligible risk. So it makes the MLM quite different and legal from the pyramid scheme. Now-a-days, MLM approach is the common practice of all leading companies like XanGo, Usana, Team National, Neways and Xocai etc