How does an MLM work?

Apr 6th 2011 at 11:46 PM

Online income opportunities take on many different forms.

MLM (or "multi-level marketing") - a complete explanation and examples...

Traditionally, a multi-level marketing organization is one where you refer other people to join a company.  Those people (or your "referrals") then recruit other people they know into the company.  Their referrals, in turn, recruit others...and so the cycle goes.  Depending on the company's structure, there could be 2 levels of referrals, or 30+.  Most MLM companies usually offer 5-10 referral levels.

What an MLM company sells can vary widely.  There are a multitude of products and services that are offered through MLMs, ranging from travel to books, vitamins to soap.  One key thing to remember is that a product or service must always be offered.  Simply selling "positions" is illegal - this is what is commonly referred to as a "pyramid scheme."  A legitimate MLM will always sell a product or service through its referral network, not the referral network itself.

It is important to note, however, that being a member of an MLM can have tremendous rewards...and any successful MLM company will make sure its members - and especially prospective members - are well aware of those rewards.  They will make sure that top promotion bonuses (which can sometimes include cruises, homes, and vehicles) are well publicized, and they will also show examples of lucrative compensation models - with the required disclaimer that such examples may not be typical and that results are not guaranteed.

MLM companies are also required to provide some form of training for their affiliates/agents/representatives.  (Sometimes members are referred to as distributors, members, or partners.)

Often MLM companies will compensate their members in a variety of different ways.  These ways include direct commissions for personal sales and smaller, "roll-up" commissions for sales made by referrals.  Some companies also offer sign up bonuses, sponsorship bonuses, and promotion bonuses.  It is absolutely true that successful MLM members are well compensated.  Many earn thousands of dollars a month.  Some are even millionaires!

Success in an MLM depends on several important factors:

1.  Personal dedication and effort.  The more time and effort you are willing to put into selling the product/service and recruiting other representatives, the more likely you will be to succeed.

2.  The product/service being offered.  Is it unique?  Is it the "best quality?"  Is there a strong demand?

3.  Your referrals' dedication and effort.  See number 1, above.

4.  Market saturation.  A new company offers greater growth opportunity...but an established MLM can also provide name recognition as a sales tool.

5.  The company's business model, advertising, and reputation.

Basically, when deciding whether or not to join an MLM opportunity, you should ask yourself these questions:

*  Is there a market for this product/service?

*  Do I have access to that market (do you know others who could use the product/service)?

*  Is this a product/service I would be proud to purchase and use for myself?

*  How much can I make for selling X units?  How much extra can I earn when I refer X members (and when they in turn refer X members), all of whom are selling X units?

*  Is this company reputable?  Do they have an established business?  If they are fairly new, do they have a business plan that makes sense?

In the end, it just makes sense to join an MLM opportunity you believe in.  The rewards will come from effort - and your level of effort will be greater when you truly believe in the product or service you are selling.  You will sell more, and you will recruit more representatives.  In other words, you will try harder and make more money as a result.

The lure of MLM is enticing and understandable.  You refer 5 people who each refer 5 people who each refer 4 people - and before you know it, you've got a 131 member sales team.  Assuming you earn $10 a month from each person, that's $1,310 a month.  All from personally referring just 5 people!

Ah - but if it were really just that easy.  It takes work to make sales and recruit others to see the same opportunity that you do.  Often you must assist your 1st, 2nd, and even 3rd level referrals to ensure they are getting results for themselves.  MLM is the truest example of when helping others winds up helping yourself.  Make no mistake:  In MLM, the rewards roll up...and add up.

If you're ready to take a shot at MLM, here is one opportunity worth considering:

SurveySavvy - with no fees, this is a perfect "starter" opportunity.  This FREE program pays members to take surveys and complete online surveys.  In addition to receiving incentives for self-activities, members also receive a portion of the incentives earned by their referrals...and their referrals (2 levels deep).  This is not a get rich quick scheme or income replacement opportunity.  This is just a simple way to earn a little extra money while experiencing an MLM-like incentive structure, with no associated fees, autoships, or subscriptions required.  http://www.surveysavvy.com/?m=368103

HINT:  When joining, make sure you register using an attended e-mail address and fill out your profile completely.  This will increase the number of survey invitations you receive.

Please to comment
Dec 29th 2015 at 9:47 PM by Fristruither
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