What are the different types of MLM companies?
There are three types of multi -level marketing (MLM) companies based on their main sources of income: those selling the product, those selling the service, and those that sell membership. MLM businesses are attractive to potential retailers, because they can earn commissions not only from the sale of goods or services they sell, but also from the sale of those hired into business. While many MLM are very renowned and successful businesses, some of them used the disputed marketing and recruitment tactics that circled the reputation of the whole industry.
MLM businesses are generally common companies selling products or services. Multi -level marketing is their approach to distribution and sale; Instead of selling goods from the shop window or services from the office, they are closed with individuals about selling as independent suppliers. According to conditions such as collaborators, distributors, representatives or associated entities, Venpro addresses potential customers in different ways, including traditional advertising,Online access and direct sales from door to door. New collaborators usually pay significant fees to join the sales force, and sometimes they can proceed to the management status for a higher fee.
MLM Associates earns commissions for their own sales and earn smaller commissions or rewritten to sell those collaborators they have accepted into business. When a collaborator accepts a new collaborator, this new associate becomes part of the "Downline" recruiter, which includes all recruits of a collaborator plus all their recruits. Most MLM compensatory packages offer overwrites on the second, third and fourth generation recruits, and some offer overwrite the entire downline co -worker.
MLM businesses that sell products usually produce the product themselves, but in some cases a toslouva with a third party for production with MLM. Examples of such products behindThey pass such things such as vitamins and nutritional supplements, cosmetics and cosmetic aids, cleaning needs and other household products and other products that are suitable for pulse and repetition of purchases. While some co -workers will keep the product inventory for immediate delivery when sales are made, most receive orders and transfer them to the home office. Some companies send orders directly to customers; Others bring orders to bulk collaborators who then pass them on to customers. In both cases, compensation for Associates is based on the value of the dollar products.
MLM businesses that sell services, on the other hand, do not need supplies or repeating visits to clients. Their co -workers are tearing the company services in the same way as the collaborators selling products and the like are compensated. Instead of selling the product, yet they sell membership in the company. However, for membership in the area of renewal is very little PRovemi, so a collaborator must constantly find new clients to maintain good income. MLM focused on services sell online educational plans, buy club membership, legal services, financial services and similar services.
The third type of business MLM sells membership and can be more precisely classified as a pyramid system. These MLM focuses on recruiting new collaborators and there is little attention to the sale of a product or service. These MLM businesses pay a significant commission for recruitment of new collaborators and provide another incentive to find revenue from a source other than the company's product or service. Without emphasis on earnings from the sale of a service or product, such businesses MLM will inevitably collapse.
Many MLM businesses are very successful. Despite their success, however, most of the research suggests that the cherish of collaborators does not earn enough of commissions and will not overcome or pay their expenses. Companies, on the other hand, make money not only from the sale of products or services, but also from registration charges charged to new collaborators. Many MLM also sells their co -workers a wide range of sales support materials, such as presentation binders and other promotional materials, and even require business cards and other stationery items to be arranged through the company.
The success of some large companies MLM led to a wide range of imitators. Some of these imitator activities have triggered an investigation that cast shadow on the entire industry. Those who consider joining MLM should carefully make their own diligence before signing any agreement or paying any fees.