Every time people heard the word NETWORK MARKETING they always think PYRAMIDING . We cant blame them, its simply because NETWORK MARKETING or also know as MULTI-LEVEL-MARKETING and PYRAMIDING has a similar way in inviting or recruiting people but it has A BIG DIFFERENT. How? Ok, we will define its word. What is Multi-Level-Marketing? In wikipedia Multi-Level-Marketing define as a marketing strategy in which the sales force is compensated not only for sales they personally generate, but also for the sales of the other salespeople that they recruit. This recruited sales force is referred to as the participants downline, and can provide multiple levels of compensation.Most commonly, the salespeople are expected to sell products directly to consumers by means of relationship referrals and word of mouth marketing. Some people use direct selling as a synonym for MLM, although MLM is only one type of direct selling, which started centuries ago with peddling.According to Xardel, direct selling and network marketing refer to the distribution system, while the term multi-level marketing describes the compensation plan.Other terms that are sometimes used to describe multi-level marketing include word-of-mouth marketing, interactive distribution, and relationship marketing. How does the Multi-Level-Marketing works? Independent, non-salaried salespeople of multi-level marketing, referred to as distributors (or associates, independent business owners, dealers, franchise owners, independent agents, etc.), represent the company that produces the products or provides the services they sell. They are awarded a commission based upon the volume of product sold through their own sales efforts as well as that of their downline organization. Independent distributors develop their organizations by either building an active customer base, who buy direct from the company, or by recruiting a downline of independent distributors who also build a customer base, thereby expanding the overall organization. Additionally, distributors can also earn a profit by retailing products they purchased from the company at wholesale price. History: It is generally accepted that the first multi-level marketing plan was introduced in 1945 by the California Vitamin Company (shortly afterwards to become Nutrilite).[13][23] The plan allowed Nutrilite distributors with at least 25 regular customers to recruit new distributors and draw a 3 percent commission from their sales. Unlike traditional direct selling, this was an ongoing payment whenever the customer re-ordered, allowing direct sellers to build a sales organization that could generate a residual-like income. —
Posted on: Fri, 22 Nov 2013 07:38:16 +0000
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