Discover the Basic Concept of MLM and Network Marketing

by Remi Badozi on November 11, 2010

You have probably heard about at least one fantastic MLM or Network Marketing opportunity that will allow you to mlm - network marketingmake a lot of money with very little or no effort on your part. While these opportunities can sound exciting, chances are that nobody has bothered to explain to you the basic concept of Network Marketing. Most likely you are also worried about the possibility of being caught up in some kind of network marketing  scam. I have written this article in order to give you a good basic understanding of what MLM and Network Marketing is all about.

As a result of today’s troubled economic climate, more and more individuals are enticed by the notion of getting involved in the Network Marketing Business. One of the factors that make Network Marketing so appealing is the perception that money can be made without any special skill or major investment. The potential of residual income can also make the Network Marketing opportunity very tempting for anyone looking for means to make extra cash. However, before you get yourself involved in any Network Marketing, there are few basic points you need to be aware of.

By definition, Network Marketing is a business model that relies heavily on a network of individuals to grow a business. While Multi-level marketing (MLM) is a type of Network Marketing where a business is built by creating a tier of network of individuals to promote and sell a company’s products or services.  Quite often, MLM is misguidedly used interchangeably with Network Marketing, however, MLM is only one of a type of Networking Marketing and not all Networking Marketing are Multi-Level Marketing….

In Network Marketing, the individuals that promote the company’s products or services are often called Independent Distributors, Consultants, Representatives, Independent Business Owners or Dealers and so on. Independent mlmDistributors are paid on commission by the parent company based on the volume of product that they sell and most often how may people they were able to recruit into the organisation and also the volume of products that their downlines sell.

Most MLM Opportunities have two main manners in which distributors can earn money: by selling the products they purchased at a wholesale price and/or by recruiting other distributors who build a customer base so that the whole organisation expands. A number of organisations that are involved in Network Marketing also have additional means through which their distributors can earn money; it depends on the compensation plan the organisation has in place for their distributors.

There are literally thousands of MLM companies all over globe and each has its unique structure. As unique as they are, they also have their own unique compensation plans. One of the compensation plans that appear to be common amongst most MLM companies is the Unilevel Plans. This is where commissions are paid based on the number of levels a distributor is from the original distributor who first purchased the product. As you advance in rank or title compensation plans get more complex and varied; as you will be expected to be involved in more sales quotas, incentives, bonuses, or any combination thereof.

If you are considering an MLM opportunity, I can assure you that it is a great opportunity for people who are looking to start their own business for the first time. However, it is imperative that you recognise it as a business; your own personal business which in turn makes you the Business Owner. To seriously build your business as a network marketer, you need to aspire to learn about business fundamentals, sales and marketing techniques, how to develop your business and strategies for networking.

Like I said earlier, you also need to be aware that there are plenty of network marketing scams out there. However, there are also real opportunities available if that is what you are looking for. If you take your time and follow a few simple steps, you can be sure that you’ll choose an opportunity that is real.

One of my mission is to educate people about how to successfully market their online business and/or mlm opportunity using the power of Internet. If you are looking for an honest network marketing opportunity or are excited about your mlm opportunity and would like to learn how to effectively generate tons of leads for your business then, take a look at my recommendation right now.

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