Multi-Level Marketing is a type of network marketing business. Network marketing is a type of direct selling tactic that involves selling products or services through a network of distributors.
Multi-Level Marketing is a type of network marketing business. To understand multi-level marketing, you should first understand what network marketing is as discussed below.
Network Marketing Business
Network marketing is a type of direct selling tactic that involves selling products or services through a network of distributors. There are many types of network marketing models including single-tier, two-tier and multi-level marketing systems. The recruited sales reps are called distributors and are usually on a downline level while those who recruit them are on an upline level. Network marketing businesses are sustainable because they make profits from the sale of products and services. They usually pay commissions and other payouts from profits made.
In direct sales, the products and services are sold to the consumer directly without using wholesalers, retailers like local stores or online stores. They also capitalize on relational and word-of-mouth marketing because they don’t have official salespersons working in the office. They also avoid mainstream media marketing to cut down on marketing and sales costs. The main distinct tactic with network marketing is that the model targets the seller’s friends and family members.
Is Network Marketing Legal?
Network and multi-level marketing organizations are legal businesses using a known business model to conduct their business. However, it is usually confused with illegal pyramid schemes. An illegal network organization or illegal pyramid schemes usually don’t have a strong brand to sell but rely on recruiting other people who have to pay to be in the organization. The organization operates without any profits to support its business but depend on money paid by new recruits to motivate their recruiters. Since no money is earned, then it is normally unsustainable and doomed to fail because there is no business or trading taking place.
Top Network Marketing Companies
There are various successful network marketing companies globally. Each company has its own line of products it specializes in including essential oils, CBD and hemp products, books, chocolates, anti-aging products among others. DoTerra is a network marketing company that specializes in selling beauty products and essential oils. There is also Mannatech which sales skincare, weight and fitness, and other health products. Other network marketing business companies include Juice Plus, Scentsy, Youngevity, Usborn Books, Optavia, Well Beyond, Kannaway, and, Yoli.
To succeed in a network marketing business, first identify a product or service that is saleable. A saleable brand is a product that meets the needs or wants of your customers on a day to day business. Secondly, you need to understand the products you are selling and what benefits they offer. The cost of the product should be reasonable and not out of reach for your network of friends and family members. It should be a product that is used on a regular basis.
Apart from that, you should have a way to demonstrate how you or other users have benefited from using the products or services. Once you have a selling brand, it is easy to proceed. Set daily and weekly targets, work with your recruiters and leaders and coaches to get daily inspiration and motivation. If you are on social media, you can keep posting the benefits of the products without necessarily offering to recruit your social medial friends. Target to talk to at least one or two persons about the brand of products you are selling on a daily basis.
You may have probably come across the term multi-level marketing (MLM) or better still may have been involved in an MLM business. According to the Direct Selling Association 2018 statistics, there are over 18 Million Americans involved with multi-level marketing companies.
MLM appeals to many people because of the potential to earn huge amounts of money and the freedom it offers its sales reps. However, it is essential to join MLM with caution and not invest so much of your money in it. Noteworthy, you can have a free hand if the products are practical that you can use in your home and not very expensive.
MLM Network Business Model relies on Direct Marketing Distributors
Multi-level marketing is a kind of network marketing where products and services are sold through a network of recruited distributors. Although multi-level marketing has been greatly understood, it is a tactical marketing strategy of using the effort of your fellow marketers to leverage your performance. It involves the sale and marketing of both goods and services. In MLM, there are two main strategies, seeking customers who will use your products but may not be willing to be distributors. At the same time, you keep recruiting those who want an alternative or a main source of income. MLM is quite similar to referral marketing.
MLM Network Marketing Business Model
MLM involves recruiting as many people as possible to join your downline. The people in your line are expected to sell and also recruit other marketers. The result is different people ranked at different levels in the organization. MLM rewards marketers by giving them a commission from their own sales and commissions of sales from the sales rep in their downline. Therefore, the more people you recruit, the more commission you will get and you will also continue rising in rank.
When you recruit a new person, you will motivate them to do the same, to recruit other people to be beneath them. Unlike other forms of marketing, MLM employs word of mouth selling and selling products through relationships.
Multi-Level Marketing Companies
MLM is popular across many fields including nutritional products, anti-aging products, financial services, essential oil brands, insurance companies with companies like World Financial Group. Here are the top MLM companies globally by revenue in 2018, Amway, Avon, Herbalife, Vorwerk, Infinitus, Mary Kay, Natura, Perfect, Nu skin and Tupperware. Amway is the biggest MLM company with an estimated annual revenue of about $9 billion.
How to Recruit Other Salesrep into MLM
Most MLM sales reps are part-time consultants and operate as distributors. There are various strategies that MLM sales rep use to recruit other sales reps. They use innovative ways to engage their friends and colleagues including strategies like ‘party plans’. In this strategy, the upline organizes a party. They use the opportunity to demonstrate products while everyone is mingling and having a good time. Each downline is usually advised to invite their friends or family members. The consultants use the opportunity to sell products and also recruit new consultants.
The main advantage of MLM is the flexibility of the nature of business. You can decide to be full-time or only work time especially if you are looking for a supplementary income.
Interestingly most sales rep in MLM organizations are women with only a small percentage of males although that may change in future. This could be due to the nature of products sold using MLM.