BusinessDictionary.com defines Multi-Level Marketing as a direct selling method in which independent agents serve as distributors of goods and services, and are encouraged to build and manage their own sales force by recruiting and training other independent agents. In this method, commission is earned on the agent’s own sales revenue, as well as on the sales revenue of the salesforce recruited by the agent and his or her recruits (called downline).
That’s great but lets break it down and spell it out.
The object of every business throughout the world is to sell products. Now, I use products in a loose way to mean tangible or intangible goods as well as services. Really, products are anything that can be sold by one and obtained by another.
Once a company is formed, it must develop the production of this product. Whether the product is Information, Juices, Vitamins, Travel, Consumables, etc. it is the task of the company to create a brand and begin the production of this product. Production is underway and a brand has been setup now a company must determine the method of distribution. They have to figure out how to move the product.
There are a couple of systems to move products. Most of us are familiar with Retailing, that is the stores we shop at and buy the product from the shelf. Some are familiar with Direct Sales, this is the door to door sales man. I remember my parents buying Encyclopedia’s and Vacuums from Direct Sales people when I was a kid. Another system is
Here is the heart of
A person is enlisted/sponsored as a distributor or independent agent (or whatever the company calls them.) The agent then is able to buy the product wholesale and then sell it retail. This is one source of income for the agent. These independent agents are also able to sponsor other independent agents to create a network or downline of other agents.
The Plan is the business opportunity side of the an
The Plan is often times why people confuse
Each Plan will be different with various forms of compensation. All should include compensation from the sale of the product and as well as some form of compensation for sponsoring other distributors. Remember though that if you find an
Multi-Level Marketing in the end is a system used to distribute products from a company to a consumer through an independent agent. It offers an opportunity for anyone to become their own business owner and create wealth beyond their wildest dreams. This system, while often times looked down upon, has created more millionaires than any other industry. While I will never say that