What is MLM?


What is MLM?


MLM stands for Multi-Level Marketing. MLM is a strategy of allocation/distributing products and services to consumers. Some companies used this strategy to distribute/promote their products, called direct selling companies.


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MLM can be defined as the structure of direct sales in which recruited distributors/representatives promote, advertise, and sell products or services to an end customer. Direct selling companies offer their products or services to consumers through sales representatives or distributors.


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Distributors generally work from home, and they are not considered employees; instead, each distributor is treated as the owner of the company or business partner.


Distributors or representatives of a company are encouraged to join new distributors in MLM companies. The success rate of a member depends on his/her network chain or team in direct selling /MLM companies.



All the members are given the same respect and opportunity to start a journey of MLM business, but there are different forms of ranking and commission rate or bonus systems.

The commission rate of a member depends on the recruitment of new team members/business partners and the quantity of selling products/services through the network chain of the membe



Is multi-level marketing a pyramid scheme?



MLM refers to a strategy of selling products to consumers and joining other people to do the same. Some MLMs are illegal pyramid schemes. Some sources say that all MLM/direct selling companies are essentially pyramid schemes, even if they are legal.



If there are no real products /services are sold and distributors or consumers are not provided business or products as claimed by the company, those types of the plan of the company are treated as a pyramid scheme. A pyramid scheme is an illegal scam.




If a company gives high priority to the joining of a new member instead of sales of products and services, the company is very likely a Pyramid scheme. The main objective of MLM companies is to sell real goods and services to the consumer whereas a pyramid scheme does not supply any real products.





Pyramid schemes are not only illegal; they are a waste of money and time. Because the pyramid scheme is highly focused on joining new people to make them invest in the company to earn money. Beware!  Some MLMs may be pyramid Schemes. MLM is a perfectly legal or legit company if it supplies real products or investments.



Is network marketing an MLM?



The business structure of MLM and network marketing is the same. The company recruits distributors/representatives to promote and sell products and provides a certain amount of commission /bonuses, travel, seminar incentives, leadership bonus, and so on to distributors. The term MLM can be used interchangeably in Network marketing.

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Is direct selling and MLM the same?


The business structure of Direct selling and MLM are not completely the same. Direct selling is the business model /structure where the company recruits distributors to promote and sell the company’s products or services directly to customers without any coordination of a third party.


Whereas MLM is a strategy some direct selling companies use to encourage existing members to join new members who are paid for the sale of their distributors. Not all direct selling companies use the MLM system.



Why MLM is bad?



Although MLM is a legitimate way to make money, the percentage of people who do succeed with multi-level marketing is very low. According to MLM success statistics, only a few percentages of people get succeed.

If you can able to build a strong network chain with the sustainable selling of products or services on your team then you can survive in the MLM business, otherwise, you can not earn money from MLM. If you are planning to join MLM observing someone who is earning a high income from MLM, then it does not mean that you will earn the same as your leader.



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Your earning depends on the sustainable selling of your team member. For sustainable selling, you need to build a strong and dedicated team. All people do not have the same time, leadership skills, communication/prospecting skills, marketing skills, conceptual skills, human skills to lead the team.

Because of this reason, all people cannot earn the same with MLM business. Although you will get training, seminars from the Company, without good monetary incentives you can not able to grow your team, and in the lack of a strong team or investment you will not able to continue with MLM business.

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If you are planning to join a direct selling company to earn money or strong your financial condition, know about the company history, the founder, working culture, team leaders, commission system, products and services of the company, profile of the company, the objective of the company, etc. If you join an MLM company, the company refers to you as an Independent Business Owner. You can earn money by selling products or recruiting new members to your team.



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Is any MLM worth it?


Is any MLM worth it? In brief, you can earn money from MLM companies. It depends on you how much money you want to earn. MLM is like the sea, you can take any amount of water. But in reality, only a few percentages of distributors actually earn high income from the MLM business.


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Why MLM?



MLM offers opportunities for everyone to start a business with low -risk and low cost. MLM is the world’s largest business industry and platform for distributing goods and services to consumers. Most of the MLM utilizes a fair and win-win marketing plan, as your downline gets promoted, you will enjoy better rewards.




How do you make money from MLM?




There are different ways to earn money in different MLM companies. One way is you have to buy a starter kit or product to become a distributor of an MLM company. When you become a distributor of the MLM company you will get the products at distributor price.

You can sell the products in retail profit to earn money. Group bonus, star group bonus, development bonus, international profit sharing, leadership bonus, Travel seminar incentives, Handphone cash incentives, Overseas trip cash incentives are some of the ways to earn money from MLM companies. However, it depends on the company’s marketing plan.



Example of MLM company:


Amway, Herbalife, Avon, Mary Kay, Vestige, DXN, Forever living are some examples of Network Marketing or MLM companies.


How does a multi-level marketing company work?


MLM companies recruit distributors as business partners to promote the company’s products or services. By recruiting new distributors or members MLM companies supply their products or services to consumers or distributors. For example, DXN is an MLM company that manufactures dietary supplements.




To sell these supplements DXN recruits distributors and through them, DXN supplies the products to earn income or profit.


The article on “What is MLM?”  has been written based on experience and knowledge of the NIMLM (Nepal Institute of Multi-Level Marketing) Team. Here We have included some important topics related to MLM (Multi-Level Marketing) business such as what is MLM? Is multi-level marketing a pyramid scheme? , benefits of MLM, is network marketing an MLM? , is direct selling and MLM the same? , why MLM is bad? , how do you make money from MLM?, multi-level marketing examples, some best MLM companies, how multi-level marketing works? And so on.


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