Multi-level marketing (MLM) is a marketing strategy in which the sales force is compensated not only for sales they personally generate, but also for the sales of the other salespeople that they recruit. This recruited sales force is referred to as the participant's "downline", and can provide multiple levels of compensation. Other terms used for MLM include pyramid selling, network marketing,and referral marketing.
Most commonly, the salespeople are expected to sell products directly to consumers by means of relationship referrals and word of mouth marketing.Some people use direct selling as a synonym for MLM, although MLM is only one type of direct selling, which started centuries ago with peddling.
Companies that use MLM models for compensation have been a frequent subject of criticism and lawsuits. Criticism has focused on their similarity to illegal pyramid schemes, price fixing of products, high initial entry costs (for marketing kit and first products), emphasis on recruitment of others over actual sales, encouraging if not requiring members to purchase and use the company's products, exploitation of personal relationships as both sales and recruiting targets, complex and sometimes exaggerated compensation schemes, the company making major money off its training events and materials, and cult-like techniques which some groups use to enhance their members' enthusiasm and devotion.
In contrast to MLM is single-level marketing, where the person is rewarded only for the immediate income between the exchange of a product and monetary benefit.
Direct selling, network marketing, and multi-level marketing
Network marketing and Multi-level marketing have been described by author Dominique Xardel as being synonymous, and as methods of direct selling. According to Xardel, direct selling and network marketing refer to the distribution system, while the term "multi-level marketing" describes the compensation plan. Other terms that are sometimes used to describe multi-level marketing include "word-of-mouth marketing", "interactive distribution", and "relationship marketing". Critics have argued that the use of different terms and "buzzwords" is an effort to distinguish multi-level marketing from illegal Ponzi schemes, chain letters, and consumer fraud scams.Some sources classify multi-level marketing as a form of direct selling rather than being direct selling.
The Direct Selling Association, a lobbying group for the multi-level marketing industry, reported that in 1990 twenty-five percent of members used MLM, growing to 77.3 percent in 1999.Companies such as Avon, Electrolux, Tupperware,and Kirby all originally used single level marketing to sell their goods and later introduced multi-level compensation plans.By 2009, 94.2% of members were using MLM, accounting for 99.6% of sellers, and 97.1% of sales. The DSA has approximately 200 members while it is estimated there are over 1,000 firms using multi-level marketing in the United States alone
Network Marketing-It's an Asset, Not a Job
By Robert Kiyosaki
I am sometimes asked, "Why do so few people make it to the top of their network marketing system?"
The truth is, the top of the network marketing system is open to everyone-unlike traditional corporate systems, which allow only one person to reach the top of the company. The reason most people do not reach the top is simply because they quit too soon. So why would someone quit short of the top?
Most people join only to make money. If they don't make money in the first few months or years, they become discouraged and quit (and then often bad-mouth the industry!). Others quit and go looking for a company with a better compensation plan. But joining to make a few quick dollars is not the reason to get into the business.
The Two Essential Reasons to Join a Network Marketing Business
Reason number one is to help yourself. Reason number two is to help others. If you join for only one of these two reasons, then the system will not work for you.
Reason number one, means that you come to the business primarily to change quadrants-to change from the E (Employee) or the S (Self-employed) quadrant to the B (Business owner) or I (Investor) quadrant.
This change is normally very difficult for most people-because of money. The true E or S quadrant person will not work unless it is for money. This is also what causes people to not reach the top of the network marketing system: they want money more than they want to change quadrants.
A B quadrant or I quadrant person will also work for money, but in a different way. The B quadrant person works to build or create an asset-in this case, a business system. The I quadrant person invests in the asset or the system.
The beauty of most network marketing systems is that you do not really make much money unless you help others leave the E and S quadrants and succeed in the B and I quadrants. If you focus on helping others make this shift, then you will be successful in the business.
As a B or an I, sometimes you don't get paid for years; this, a true E quadrant or S quadrant person will not do. It's not part of their core values. Risk and delayed gratification disturb them emotionally.
By Robert Kiyosaki
I am sometimes asked, "Why do so few people make it to the top of their network marketing system?"
The truth is, the top of the network marketing system is open to everyone-unlike traditional corporate systems, which allow only one person to reach the top of the company. The reason most people do not reach the top is simply because they quit too soon. So why would someone quit short of the top?
Most people join only to make money. If they don't make money in the first few months or years, they become discouraged and quit (and then often bad-mouth the industry!). Others quit and go looking for a company with a better compensation plan. But joining to make a few quick dollars is not the reason to get into the business.
The Two Essential Reasons to Join a Network Marketing Business
Reason number one is to help yourself. Reason number two is to help others. If you join for only one of these two reasons, then the system will not work for you.
Reason number one, means that you come to the business primarily to change quadrants-to change from the E (Employee) or the S (Self-employed) quadrant to the B (Business owner) or I (Investor) quadrant.
This change is normally very difficult for most people-because of money. The true E or S quadrant person will not work unless it is for money. This is also what causes people to not reach the top of the network marketing system: they want money more than they want to change quadrants.
A B quadrant or I quadrant person will also work for money, but in a different way. The B quadrant person works to build or create an asset-in this case, a business system. The I quadrant person invests in the asset or the system.
The beauty of most network marketing systems is that you do not really make much money unless you help others leave the E and S quadrants and succeed in the B and I quadrants. If you focus on helping others make this shift, then you will be successful in the business.
As a B or an I, sometimes you don't get paid for years; this, a true E quadrant or S quadrant person will not do. It's not part of their core values. Risk and delayed gratification disturb them emotionally.
Why Network Marketing ..!!!
See What Mr. Robert T Kiyosaki says about Network Marketing.
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See this website regarding MLM companies :
www.strategyindia.com
www.networkingeye.com
Please post your comment / suggestion
Thanks
_______________________________________________________________________________________
________________________________________________________________________________________
See this website regarding MLM companies :
www.strategyindia.com
www.networkingeye.com
Please post your comment / suggestion
Thanks
_______________________________________________________________________________________
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