What Is a Pyramid Scheme?
What is Multi Level Marketing (MLM)? MLM is an industry which has grown in popularity over the years. The popularity of this industry is attributed to the prospect of fast results with little effort required on the part of the individual distributors or their upline. In recent years, the term “MLM” has been used almost exclusively by marketers to describe their business practices. With many people involved in this industry, one would wonder what is multi level marketing really about?
Multi level marketing, also known as pyramid selling or network marketing, is an advertising strategy for selling products or services wherein the income of the MLM business is derived primarily from the fact that the distributors or their recruits sell more products than they personally use or sell themselves. Because of this, the compensation plan for most multi level marketing businesses will include the use of recruiting methods. These can take the form of personal sales training or the distribution of eBooks or DVDs designed to help the online members of the business reach their fitness goals. Some companies will also allow their recruits to use products of their choosing as long as those products are used in conjunction with the program. Recruitment may also be done by way of mass circulation such as newspaper or internet advertising.
As mentioned, what is multi-level marketing has a lot to do with the compensation plan for the business opportunity. In order to make money in this business practice, it is important for the distributor or his or her recruiter to be able to successfully encourage others to sign up and purchase the product being sold. The compensation plan is based on how much money is made for each recruited member, referred to as a “level.” The more levels a distributor makes, the more money he or she will be able to earn.
This is not to say that what is multi level marketing inherently unethical. The reality is that those who promote it have not necessarily deceived anyone. Rather, they have simply used common sense to help them recruit more individuals into their own business. One of the most popular products is Nutracea. This company has used an effective sales approach in order to attract members to their business opportunity. By displaying helpful information about what is multi level marketing, they have helped to instill trust in others who might be interested in trying out the system.
The best part about what is multi level marketing is the fact that it allows independent business owners the opportunity to build a team of sales reps without having to invest in a costly advertising campaign. This is advantageous for the business owner as well as the downline representatives. As the company grows, so does its income producing potential. Independent business owners can also decide whether or not to increase the level of compensation they pay their recruits.
When looking at what is multi level marketing companies, it is important to keep in mind that the system is based on providing benefits to all involved. It is a compensation plan that has the potential to create an excellent level of income and can also help the company recruit new distributors effectively. Because the product is so advantageous, it makes sense to review the business practices used by the company before joining them. By doing so, you can avoid finding yourself falling into the line of fire with a pyramid scheme.