Network marketing, also known as Multi Level Marketing, has captured the attention of people all around the world, and thousands of people have made millions as a result of being a part of it. The success stories of such millionaires from the United States, Australia, and the United Kingdom, among others, are being published as case studies in universities and other educational institutions, as well as direct sale training institutes.
Multi-Level Marketing is also known as ‘Network Selling,’ and ‘Structure Marketing,’ among other words. As the name suggests, this direct method of distribution includes individuals and the formation of a network of people who act as sales distributors. Typically, in MLM, individuals first become distributors for the company. The dealer is also a salesperson. Selling occurs by finding and hiring a new distributor for the network. Any seller eventually becomes a customer when he begins using the product for himself, his family, and friends. Thus, sales are made through both self-promotions and by distributors who have been enrolled by the customer.
In this scenario, rather than distributing the merchandise directly, the seller works on expanding his or her network and hiring new distributors. As a result of the expansion of the distribution network and associated acquisitions as well as chain recruitment, the sponsor distributors receive rebates and commissions from the Company.
Income is produced when a distributor hires other distributors, who in turn hire more distributors, thus expanding the network, and each distributor becomes a client, purchasing goods/services from the Company. For each new distributor added to the chain and increased revenue, upstream distributors receive fees, rebates, and points, all of which add up to profits.
In this structure, the company focuses on supplying products to dealers as well as sales training and delivery kits to distributors that double as salesmen. Companies put a lot of money into educating distribution distributors and teaching them the art of teamwork, trust building and management, as well as providing them with product and sales training. In this endeavor, the companies make extensive use of audiovisual media, magazines, and marketing materials. Team gatherings, conventions, lectures, and membership of multiple achievers’ clubs are the mainstay events that contribute to the spirit and engagement of individual distributors.
What draws people to MLM is the idea of making millions of dollars without having to spend anything more than one’s time and commitment, and without having to risk one’s job or other life goals. MLM sells the idea of a person dreaming and reaching their goals by entering and collaborating across a network. Since there are no entry obstacles, thousands of people are drawn to this endeavor and follow it with zeal. Success stories are highly published and shown for all to see, so seeing is believing, and this is what motivates people to enter MLM networks.