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Inside Multi-Level Marketing: MLM Defined

Aug 17, 2007
Are you looking for a new start? Are you looking for a new beginning? Do you want the chance to become a part of something bigger than yourself and all the while making big profits? Do you want the opportunity to run your own home based business? Then the answer to these questions is Multi-Level Marketing (MLM). Surely, you have heard the term MLM, but not always with the greatest of words behind it. Many people have a misconception about multi-level marketing, as a negative entity that only exists to take your money. While, I cannot deny that some multi-level marketing outfits are like that, the truth is a great majority are true, honest-to-goodness, businesses that will help you build your business from the ground up, with little to no money down.

So, before we go any further, why not look into exactly what multi-level marketing is, how it works, and why it would be beneficial to you as a home based business. Multi-level marketing is an arrangement, sometimes referred to as network marketing, which has one parent company, if you will. The sales team, is made up of independent contractors (which are the home based business operators) and each contractor is an associate of the parent company. Income is generated when the independent contractor sells the parent company's services or products.

Now that is just the first level of this marketing outfit. You see, it is in your best interest to recruit new independent contractors and here is why. When you bring in new recruits, they are now in, what is called, your downline. The downline consists of independent contractors that you initially recruit, then the new recruits your recruits sign up, and so forth, it keeps going down the line, hence "downline". Now what is great about these recruits and getting them is that not only do you receive a percentage of their sales, but a percentage of their recruit's sales, and so on. This is where the real profits begin to show.

Now, with that said, you should be aware of some illegitimate multi-level marketing companies. The above, is what you should be looking for in any MLM company, for that is the way the entire business was intended to run. As with any idea, some people got it into their heads that things could be easier and you would not have to make any sales, you would only have to get recruits. You should avoid these ones, while it may seem easier it is farce, especially since people are much more aware of these types of schemes and stay away from them. When you are looking for an honest multi-level marketing campaign, make sure that you are compensated for sales, not for recruits alone. This is called the pyramid scheme.

The pyramid scheme is disguised to resemble the multi-level marketing campaign, but is far different and should be avoided if at all possible. Not that the pyramid scheme is anything new, remember the chain letters way back when? Think about those chain letters, you send every person on the list $1 or $5 and your name is moved to the top, with the promise, people will send to you as well. This was a pyramid scheme also, no services or products were involved. However, once people caught on, they began offering advice as the service or something similar.

Legitimate multi-level marketing companies have specific steps in place and will have everything out in the open. Look for a company that provides you with specific details regarding their compensation plan, how you can benefit at various levels, and real products or services for you to sell. Nothing in life comes free, so you will have to really work at it to make good profit. However, a reputable MLM company will provide you with everything you need to begin. Many will have marketing tools, advertising campaigns, training, and support for you as you begin your home based business.

Do not be afraid to sign up with a multi-level marketing campaign; simply be careful about the businesses you choose. Take great care in investigating the company, talking to other independent contractors, and reading everything on the website prior to making that first step.
About the Author
Scott Fromherz owns and operates multiple websites. Check out http://www.downlineautopilot.ws for more about Multi-Level Marketing.
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