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Multi Level Marketing
Multi level marketing is also known as network marketing. This is a kind of business where franchising and direct selling are combined. This business model makes a person associated to a company in an independent transaction approach. It is an approach where the company creates a contractor relationship to the person who wants to expand his business.
The members make their earnings based on the sales they have reached in that particular product or service. It also includes the sales of the person that they have recruited to join the business. Most of the time an individual who has recruited more members and generated good sales of the product(s) will have better earnings because of the additional effort to succeed in in the two separate strands of the business
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There are “pyramid schemes” or Ponzi schemes, which are considered illegal. Most people associate multi level marketing to these kind of schemes because they often market themselves as a legitimate networking business.
In a legitimate MLM or Network Marketing scheme commissions are earned in the process of selling a particular product or service. There should be no earnings in what is called a “sign up fee” or for just recruiting yourself. This kind of self-promotion marketing must always be questioned because of the lack of transparency in where the scheme gets its revenue and profits. The sales can only come from existing and new members, which are considered the end users of the product and as the distributors.
These criticisms led to major changes in the multi level marketing industry in the early 1980′s when many companies started to allow their members to concentrate only on marketing and not on distributing or stocking the product. Most multi level marketing firms now perform as fulfillment firms by taking the tasks of shipping the product, paying the commissions and taking orders from their clients.
Many people who are victims of the illegal schemes in multi level marketing are required to buy expensive products. However, most of these schemes do not last long because they are not able to replicate themselves like a genuine MLM business model.MLM Wealth Training Available Here