What is MLM ?

What is MLM ?

by Fernando Soave Copyright © 2003



Multilevel Marketing is one of the fastest growing

yet most misunderstood methods of moving products

in use today. It has been termed by many as the

Wave-of-the Eighties.



But, it will go far beyond that. By the 90's more

than 100 billion dollars woth of products and

services has been moved through Multilevel

Marketing companies. As we are in the 21st century

watch out !



What is MLM ?



This question is quite frequently in response to a

button we often wear or we have seen wearing by

others.



Let's explain it .



1. Marketing simply means moving a product or

service from the manufacturer or provider to the

consumer.

2. Multilevel refers to the system of compensation

provided to the persons who are causing the

product to move or the service to be provided.

"Multi" means more than one.

"Level" means generation.



There are really 5 basic methods of moving

products :

1. Retailing.

ex. the drug store, the department store,....

You go into a store and buy something.

2. Direct Sales.

ex. Tupperware, Avon, .....

3. Multilevel Marketing.

This should not be confused with retailing and

Direct Sales which commonly is.

4. Mail Order.

This can be an MLM but mostly is included in the

Direct Sales category.

5. Pyramid Sales.

This type of Sales is to often confused with MLM.

The fact is, Pyramides are illegal. The main

reasons they may be illegal is their failure to

move a product or to provide a valid service.

If a product doesn't move, how can you even call

it "marketing", let alone "Multilevel Marketing".

Multilevel it may be, but Marketing they are not

!!!



Now, most objections that people have about

getting into Multilevel Marketing are due to not

realising the difference between MLM, Pyramid

Sales and the Direct Sales methods of marketing.



This is understandeble because most reputable MLM

companies belong to the Direct Selling

Association.



We have been conditioned to think of MLM as door

to door direct sales programs because our first

encounter with them was when

a distributor knocked on our door to sell us

something.



Anyway, there are some features that differentiate

MLM from Retail and Direct Sales companies and on

very significant difference is that in MLM you are

in business for YOURSELF but not BY YOURSELF.



Being in business for yourself means you are

buying the products WHOLESALE from the company you

are representing. This means also that you can use

these products for your own consumption at

WHOLESALE PRICES.



Since we are buying products WHOLESALE we can, if

we wish, sell these products at RETAIL and make a

PROFIT.



The most common misunderstanding about MLM is the

notion that you HAVE TO sell retail to be

successful.



You may sell if you want to or have to due to your

particulare program procedure, but in regard to

making the larger sums of income, the real success

is in building the organisation.



Let your sales come as the natural result of

building the organization.



The word "selling" triggers negative thoughts in

the minds of about 95 % of the people.



In MLM you don't need to "sell" the products in

the traditional sense of the word.



However, the PRODUCT DOES HAVE TO MOVE or NOBODY

GETS PAID.



When you build an organization, you are actually

building a network through which to channel your

producths or services.



Retailing is the foundation of Network Marketing.

Sales in MLM or Network Marketing come from

distributors SHARING with their friends,

neighbours and relatives. They never have to talk

to strangers. Network Marketing or MLM is building

an organization in which a lot of distributors all

retail a little.



So, you see, its not going door to door every day

calling on strangers.



Another point that differentiates MLM from Direct

Sales is the SPONSORING of other distributors.

This is called RECRUITING.



When you SPONSOR someone, you are making a

COMITMENT to TEACH them how to do what you are

doing, building a BUSINESS OF THEIR OWN.

Sponsoring is what makes a Multilevel Marketing

business so different an makes it grow.



As your organization grows, you are building

toward becoming an INDEPENDANT SUCCESFULL BUSINESS

PERSON. You are your OWN BOSS.



With Direct Selling companies you work for the

company. If you decide to quit that company and

move to another area, you end up having to start

all over again.



In almost all of the MLM Programs you can move to

another area of the country and sponsor people

without losing the volume generated by the group

you left behind.



In MLM Programs you can make a lot of money by

building an organization as your primary function.



A Multilevel Marketing Organization is not a

piramid scheme.

The piramid is built from the top down and only

those in at the very beginning can ever be near

the top. And the pirce of the products or services

get every step higher and higher, leaving the

people at the bottom broke.



In the MLM Marketing everybody starts at the

bottom and has the opportunity to build a large

organisation, even larger than his sponsor's

organizationif he wants.



MLM Marketing is the solution to the distribution

costs of the most companies because there will be

nomore channels between the producer and the

consumer. And the most part of the benefit can be

paid to the distributors.



Fernando Soave

CEO CUTTING EDGE MLM

http://www.cuttingedgemarketing.ws

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Fernando Soave is the author of "Cutting Edge MLM News."

He has been in marketing for 20 years and is helping

individuals succeed online.

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