Network marketing has been around for a while, longer than most think. Who was the first company on the scene? If you said “Amway” that’s the wrong answer. You will have to look further back. Did you say “NutraLite”? Nope, you need to go back even further. It was a sea vegetable supplement company named Wachter’s. It was the started in 1932, during the Great Depression of the 1930’s. (NutraLite started in the 1940’s).
There are many who define multi level marketing as a illegal enterprise and others who define it as a credible business. Today there are thousands of MLM companies and new ones pop up every day. Network marketing has been adopted as a “direct selling” company and many companies pride themselves as members of The Direct Sellers Association.
People more often than not will define multi level marketing based on their own personal experience. Sadly because most people lack the training to become successful have a poor definition. Others who have been successful fall completely in love with the industry. The sad truth is that many have not had a positive experience, worse yet the friends and family of the networker make negative conclusions as well. Here is how Wikipedia defines it:
“Multi-level marketing (MLM) is a marketing strategy in which the sales force is compensated not only for sales they personally generate, but also for the sales of others they recruit, creating a downline of distributors and a hierarchy of multiple levels of commissions.” It goes on to define network marketing companies as Independent, unsalaried salespeople of multi-level marketing, referred to as distributors (or associates, independent business owners, dealers, franchise owners, sales consultants, consultants, independent agents, etc.), represent the company that produces the products or provides the services they sell. They are awarded a commission based upon the volume of product sold through their own sales efforts as well as that of their downline organization.
Independent distributors develop their organizations by either building an active customer base, who buy direct from the company, or by recruiting a downline of independent distributors who also build a customer base, thereby expanding the overall organization. Additionally, distributors can also earn a profit by retailing products they purchased from the company at wholesale price.
On a positive note many people define multi level marketing as the great equalizer, meaning that you don’t have to have a “proven” background, education or franchise size fee’s to become involved. This is certainly true when you begin to recognize many of the more famous companies that are out there. Some of the best-known companies in America, including Avon, Mary Kay Cosmetics and Tupperware, fall under the network marketing umbrella.
Network marketing programs feature a low upfront cost–usually less than five hundred dollars for the purchase of a product sample kit–and the opportunity to sell a product line directly to friend, family and other personal contacts.
Authorities like the FTC, warns people in how they define multi level marketing, especially when a network marketing network compensates participants primarily for recruiting others rather than for selling the company’s products or services. A network marketing system in which most of the revenue comes from recruitment may be considered an illegal pyramid scheme.
As side note, MLM businesses operate in the United States in all 50 states and in more than 100 other countries, and new businesses may use terms like “affiliate marketing” or “home-based business franchising”.
Bottom line, do your due diligence. Don’t simply take your friends word without doing your own checking. Define multi level marketing out of your own research and comprehension. Make sure they are established and have Two years in the industry. And look for systems that can help you learn about this industry and jump start your business.
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