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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

Difference Between MLM and Network Marketing

The Multi-level Marketing (MLM) is a type of a marketing strategy wherein the sales force is compensated not just by the mere sale a representative makes, but also for the sales of the other representatives they have recruited. MLM can also be classified as a form of direct selling. Basically, in MLM, one can make money by selling their products and by recruiting other people to join the company. Though one can get a steady income simply by selling the product itself, a bigger income is generated when one gets to recruit new representatives to join the company.

 

Network Marketing on the other hand, is a type of a marketing strategy wherein a certain network marketing company distributes its products through its individual contractors. Network Marketing works like franchising where an individual has the right to sell the same product along with the company’s name and brand. Similarly, the individual is hired by the company to sell the product and in return, they get to have a profit by selling the same products to their very own customers. This means that Network Marketing can not only give the individual profits based on what was sold but can also let the individual build up his own sales team and create his very own list of members. With this, the individual gets to expand the business and gain from it from multiple resources.

 

Multi-level Marketing and Network Marketing only differs in such a way that in Network Marketing, you get to build your own team, which means you get to give them their own commission- a reasonable commission in this case. With this, if your seller gets a good commission from you, the better the chances of selling the product more and more. And if you sell more products, that means, more and bigger profit in the end.

 

Both Multi-level Marketing and Network Marketing need two things: Good sellers and good product. Both of these marketing strategies also mean two things: First, to able to sell the product and in return, get a profit out of it and second, get a bigger profit by recruiting other people to join your team or the company. Both marketing types generate a bigger income when you get to have more people to join you on board. Both must have a good product the individual must sell and must have a team consisting of good members working together for the same set of goals: get paid and get good commissions out of it.

 

In order for one to succeed in any of these marketing strategies, one should build a career path in front of him. Both need strong-willed, optimistic and very determined individuals. If an individual opts to join this kind of marketing strategy, one should look for individuals sharing the same set of principles, ideas and opinions in order to reach the end goal more easily. With that, new people will keep on joining your team, the company, and steadily, making the business very profitable.