What is MLM? - Part 2 : MLM

Now, joining a program late in the game and being further down in the structure does not mean you can’t make any money, or any good money. There should be plenty of opportunity for you if the company is selling a legitimate product that people want and need.

That said, one of the things you should look for in any MLM opportunity you’re considering, is a product which can be sold to people outside of the network. In other words, you should be able to make some profit simply by retaining non-affiliated customers, as opposed to requiring your downline to buy the products.

Let’s quickly go over how people make money from MLM...

People make money from MLM opportunities by selling products and services. The big money comes from the multi-level structure, and from building your downline.

If you are at all familiar with affiliate marketing, then you can think of MLM as "affiliate marketing on steroids." Whenever you refer a paying customer, you get paid a commission based on the price of that product. Your commission might be a flat fee, or it might be a certain percentage of the sale.

Now, as you build your downline, they will also be referring new customers. Each time a member of your downline makes a sale, you earn another commission. This commission is smaller than what you’d make from a direct referral, but the impact is cumulative.

To better show you how this works, let’s take use the example of a multi-level program with a network going only five levels deep.

Your commission structure might look like this:

- Direct Referral: 50% of sale

- 2nd Level: 20% of sale

- 3rd Level: 10% of sale

- 4th Level: 5% of sale

- 5th Level: 2% of sale

Notice that your levels are filled out by your immediate downline building their downline, which builds another downline, and so on until all 5 levels are filled.

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