Multilevel Marketing, popularly known as MLM, is an extension of the Direct Sales model wherein it incorporates the recruitment of Sales Representatives apart from selling products or services. Most Direct Selling companies use the Multilevel Marketing (MLM) strategy that encourages their Distributors, also known as Sales Representatives or Independent Representatives, to sell and recruit new distributors to increase their salesforce. This write-up discusses Multilevel Marketing and how it encourages individuals to earn their livelihood or second income.
Multilevel Marketing and How it Differs from Direct Sales
Direct sales, also called Direct Selling, is a business model wherein the distribution of products depends on salespeople. The salespeople are known as IRs or Sales Reps-to sell directly to consumers, unlike a traditional retail setting. The Sales Reps are self-employed who are at liberty to set their working schedules. They earn handsomely by commission from their partner company. In Direct Sales, the earnings of the Sales Representatives stop once they execute a sales deal.
Multilevel Marketing, an extension of the Direct Sales model, is a business model that companies use to sell their products or services to consumers through an independent distribution network. It bypasses intermediaries and physical retail outlets and directly offers its products to consumers using independent Sales Representatives. The Sales Representatives work from their home comforts and sell products to their customers either in-person or via online means. Unlike Direct Sales, the earnings of the Sales Representatives do not stop here. The Sales Representatives are also rewarded for recruiting more Sales Representatives – called their downline and earn a percentage on the sales made by their downline – called residual income. Most Direct selling companies incorporate the Multilevel Marketing model.
MLM – Has a Great Deal to Offer
MLM businesses have a great deal to offer to their Sales Representatives. People value flexibility in work and dream of earning a future! That is what Multilevel Marketing business offer. And that is the reason why so many individuals are attracted to it.
Sales Representatives in the MLM business model have the luxury of working part-time and from the comforts of their homes in flexible and convenient work hours. As per research by the Direct Selling Association, ninety percent of Sales Representatives work less than thirty hours per week as MLM businesses do not require you to work long hours.
Further, starting an MLM business involves minimal financial investment. That is the reason why it appeals to so many people enabling them to start their own business. But if you want to be successful, you need to be dedicated and remain focused on your preparation. It would help if you believed in your ability to succeed.
Beware of Fake Companies that Operate as MLM Companies
We have seen how Multilevel Marketing (MLM) strategy is incorporated by several companies and are therefore interchangeably referred to as Network Marketing or Direct Selling companies. These companies encourage their Distributors or Independent Representatives and handsomely reward them with lucrative commissions to sell their products or services and recruit further new Distributors to increase their salesforce. The larger the salesforce, the greater the company’s increase and visibility, which helps to grow its sales and revenues.
While many MLM companies are legal, some incorporate the Pyramid scheme, which is not a legal business model. These illegal schemes does not involve any product or service for sale. Therefore, if you are planning to enter the MLM business, it is important for you to ascertain the veracity of the company. Verify the years of its existence in the market, satisfy yourself if the commission it pays meets your expectation. Check if the company has enough finance top sustain itself for long, and so on. Once you know you are collaborating with the right company that offers comfortable products. You can step into the MLM world with confidence. Multilevel Marketing is indeed a strategy with a lot to offer you if you have the sales instinct. All the best.
