Multi Level Marketing

Multi level marketing is a business model where the sales force, usually referred to as distributors, is compensated not only for sales they personally produce, but also for the sales of other distributors they recruit into the business.

The recruiting aspect of the model creates a downline of distributors. This downline organization of independent contractors exists within the multi level marketing company. However, because it's made up of independent contractors, it's not part of the company per se'.

This enables the individual at the top of a particular distributor organization to be compensated for the sales of multiple levels of distributors.

Other terms for multi level marketing include MLM, network marketing, referral marketing, relationship marketing and, to a lesser degree, pyramid selling.

MLM companies are often the subject of criticism and the target of lawsuits.

The criticism is due to their similarity to illegal pyramid schemes where income is generated from recruiting rather than product sales.

Other criticisms stem from over-emphasis on recruiting new distributors, requiring distributors to purchase a minimum amount of the company's products, and exploitation of personal relationships in order to recruit and/or sell products.

While some companies and/or distributor organizations are guilty of some of these tactics, they're the exception rather than the rule.

The truth is, multi level marketing is a great way for individuals to start their own home based business without having to invest a huge sum of money to get started.

As a business model MLM has always boasted a simplicity that makes becoming successful a very real possibility for virtually anyone.

But, in spite of its simplicity, there is a danger that MLM distributors will fall victim to information overload about how to be successful in this business. With the proliferation of information available on the internet, this problem has gotten exponentially worse.

I'm not saying that all this information is a bad thing. Quite the opposite, in fact. The more information we have about any given subject, the better.

However, with so much information out there about how to do the business, it is easy for MLMers to become confused. This can even happen to experienced distributors.

You may or may not know that the attrition rate in MLM is very high, especially within the first year or so.

A big reason why so many distributors fall away is they unconsciously lose focus. This loss of focus leads to ineffective business practices, which lead to few, if any customers and recruits. Without customers and recruits, there is no business. So the distributor becomes discouraged and falls away.

What MLM distributors absolutely must do, especially in the infancy of their business, is thoroughly understand and focus on the basics of the business.

That's what this section is all about.

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