What is MLM? - Part 1 : MLM

MLM (also known as "Multi-level-marketing" or "Network Marketing") represents a unique approach to marketing products and services to consumers.

The core idea behind any MLM company is to implement the use of independent representatives to refer customers to the company. Any purchase made by a customer results in the payment of a commission to the referring representative.

In essence, the representative can create his or her own business without needing to create a product for sale. He or she can also grow and increase their business by recruiting new representatives into the business.

It’s important to note that real MLM opportunities are NOT pyramid schemes!

Many people confuse the two because of the recruitment and referral aspects are common between each. However, in a pyramid scheme, things are set up so that only the person at the top (the originator of the scheme) gets paid. In a MLM opportunity, any and everyone who refers a customer gets paid.

Let’s go ahead and look deeper at how MLM really works... I think you’ll see why multi-level structures can be fair and profitable for all.

I want to provide you now with a better explanation of what "multi-level" means. It really has to do with the commission structure available to independent reps. In any MLM opportunity, you will find the organization split into two groups: the upline and the downline.

Your "upline" consists of the people above you in the network. Whoever recruits you into the network is a part of your upline, as are the people above him or her. However, the person who introduced you to the business is typically more accessible and often serves as your mentor who trains you on how to work the program. Essentially, you are a part of your mentor’s downline. Furthermore, the people you recruit into the MLM opportunity will be members of your downline.

You might be thinking, "I can just find a program and join it without being referred by anyone, then I’ll be at the top!" This, however, is not the case. The absolute, top-tier of any MLM company’s upline consists of the owners/founders, along with the first outsiders they brought in to the network. So, while it is possible to be very high up the chain, you have to get in on the ground floor while the company is still in its infancy.

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