What is MLM?

Many product types, rather than available in shops, is sold through distribution technology known as network marketing or multi -level marketing (MLM). In this type of distribution formula, independent dealers are a parent company and are paid for a commission based on the volume of the product they sell. Sometimes it is difficult to distinguish renowned MLM businesses from illegal schemes of the pyramid or ponzi because they try to portray them as MLM.

Sellers in MLM companies are often called distributors, consultants, sellers or any other name that suggests selling a product for a larger parent company. Many products sold through MLM are nutritional supplements or otherwise related to health care, but it can be any type of product. Distributors can earn money through MLM in one of two ways: by selling products they purchased for a wholesale price or recruiting other distributors whoIt builds a customer to expand the whole organization.

In most legitimate companies MLM, no commission is paid on the basis of recruitment itself, but only to sell products. If new participants are paid on the basis of the number of recruits or if they are obliged to purchase a larger amount of "stocks" than they are likely to sell, the organization can be a pyramid program. In most countries, they are illegal, including the United States.

Compensation plans differ from one MLM to the other, but there are several common patterns. The easiest ones are called UNilevel's plans and the commissions apply on the basis of the number of levels that are the representative of the original product. Progress in the rank or title does not increase compensation. From now on, compensation plans are more complex and diverse and may include sales quotas, incentives, bonuses or any combination of its. There are literally hundredKY companies MLM, each of which has a unique structure.

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MLM companies have become very predominant during the second part of the 20th century. With their increased popularity, much hard criticism has come due to the low probability that through these types of enterprises develops significant income. There are legitimate network marketing opportunities and in this way you can create income. However, it is important that someone who considers them the right amount of skepticism in terms of eccentric or unverified demands on wealth generation. The old proverb still applies that "If it sounds too good to be true, he probably is."