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What is Multi-Level Marketing?
Multi-level Marketing, or MLM, is a marketing strategy which creates a down line of distributors and a
hierarchy of multiple levels of compensation. The sales force is compensated not only for their own
sales but also for the sales of the people they help recruit. Firms, having a large product base, often
cannot employ equivalent sales force; and believe they would be better off without the traditional
approach. Hence, they implement MLM to survive competition from multi-nationals.
MLM is also known as Network Marketing because it utilizes a network of individual customers to hit
other potential customers. In other words, every individual customer serves as a sales representative.
Multi-Level Marketing Vs. Pyramid Marketing
People often confuse MLM with pyramid marketing; however there is very clear distinction between the
two approaches: pyramid marketing is about getting your money and then using you to recruit other
distributors; MLM, on the other hand, is about moving the product through a larger network of
distributors so that the business can increase sales volume.
Another difference between MLM and pyramid marketing is that Pyramid marketing requires each level
to DOUBLE before a new level is created so it isn’t fair to people lower down in the levels and also
unethical. MLM, however, awards a commission based upon the volume of product sold through own
sales efforts as well as that of the down line organization.
Since MLM faces the risks of initiating a business that has not been tested by the customers is not
recognized, people prefer to wait a coupe of years before joining. Hence, they also witness the
company’s track-record and reliability.
Table of Content
Chapter 1
The Multilevel Marketing Concept …4
What is Multi-Level Marketing?..4
Multi-Level Marketing Vs. Pyramid Marketing…4
Structure of Multi-Level Marketing …5
Growth within Multi-Level Marketing Firms …5
CHAPTER 2
Understanding the MLM Situation and Opportunities…6
Scope of Multi-Level Marketing…6
Multi-level Marketing Opportunities…7
CHAPTER 3
Understanding the MLM Model …8
Multi-level Marketing Model…8
Chapter 4…10
Tips to Develop Appropriate Compensation Plan…10
Basic Compensation Strategy …10
Chapter 5
How to Find a Good MLM Business…12
Step I: INVESTIGATE THE COMPANY…12
Step II: INVESTIGATE THE PRODUCT:…13
Step III: INVESTIGATE THE COMPENSATION PLAN: …14
Chapter 6
Multilevel Marketing versus Traditional Marketing …17
Difference between MLM and Traditional Marketing…17
Chapter 7
How to Improve Your Multilevel Marketing Skills…19
Chapter 8…21
Essentials of MLM Business…21
Chapter 9
The Legality of Multi level Marketing …23
Chapter 10
Multi level Marketing Scams and Tips to Avoid Them…25
Tips to Avoid Multi level Marketing Scams:…26
Chapter 11
Online Multi Level Marketing Opportunities…27
Guidelines for Efficient Online Multi-level Marketing…27
Chapter 12
Relationship Building through Multilevel Marketing…29
CHAPTER 13
Generating Leads…31
Chapter 14
Measuring Multilevel Marketing Performance…32
Chapter 15
Advantages of Multi-level Marketing …34
Chapter 16
Disadvantages of Multi-level Marketing…36
Chapter 17
Why MLM Goes Wrong- the Company’s Perspective…38
Reasons for MLM Failures…38
CHAPTER 18
Secrets of Multi-level Marketing …40
Chapter 19
Multi-level Marketing - an Overview…42
Enjoy!