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Posted in MLM (Multi-Level Marketing)
In multi-level marketing, the product reaches the customers from manufacturers via distributors, but the distributors themselves belong to the target group of customers, and mow often become the consumers first and then distributors. They further sell the goods to other customers, and try to convert some of these consumers as distributors under them- The conventional retails store route is completely by-passed.
Let us assume that a company sells products to three consumers, and approaches them with an idea of becoming their distributor also. Some of them may agree, some may not. Let us assume that in our case two consumers will turn distributors out of three in the first level.
These two will further sell products to consumers, and may convert some of them as distributors under them as level two distributors. The first level distributors will not only receive commission on direct sales made by them, but also a partial commission on the sales made by distributors under them on the second level. These second level distributors may further convert some or their customers as distributors. Thus, the chain keeps on expanding and the higher level distributors keep on receiving partial commission on sales made by their down level distributors up to certain level.
The benefits of Internet MLM can be:
1. Distribution network grows continuously.
2. Companies can maintain high margins on their products.
3. Entering new markets is both quicker and easier.
4. Marketing overheads are low.
5. Innovative products can be well demonstrated.
The idea behind multilevel marketing (MLM) is simple. Imagine you have a product to sell. You could do what mat businesses do, i.e., sell directly to the customers or find others who will buy your product and sell it to other people.
The main emphasis is on recruiting of distributors who can hire recruit distributors. Even big companies have recognized the potential of MLM, and have started selling their products through this additional channel.
Internet MLM is even more effective type of MLM business. The Internet made it possible to run the entire business online. You do not have to annoy your colleagues and friends. You may forget about kitchen presentations. You have the Net which will do all the work for you.
Of course, you need to work hard as well. There can be no easy money in the Internet MLM. Fast money can be earned in casino. But Internet MLM is a serious job where you can succeed only if you try hard.
Simplicity of MLM is the greatest myth about this business. It is really easy to start but not easy to suceed. Those who achieved success in Internet MLM have been working hard for many years. There are no easy ways.
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