What is Multi-Level Marketing Business, Exactly?
Multi-Level Marketing dates back to 1930 when Carl Rehnborg got to know the importance of supplements in diet and the health benefit attached to it, in the body.
This happened while he was in China, several years later, he traveled down to America and started a company, which he named the CALIFORNIA VITAMIN.
He grew the company with steadfastness and hard work, and then later rebranded it to NUTRILITE in 1939. I will be explaining what the multi-level marketing business is in this article.
Along the line, he started looking for how to strategize and make his product more popular and accessible and then, he felt he needed independent distributors and then boycott retailers in the process in a bid to get his product the end users.
In 1945, Carl Rehnborg introduced the product of his thought which transcends to multilevel marketing strategy to boost the sale of his product.
Later on, two consultants were hired as distributors, and that became the stepping stone in multi-level marketing with the expertise of the independent distributors namely Jay Van Andel and Rich Dews.
The company experienced a dramatic turn and sales grew progressively over a short period. The two distributors, later on, invented a rival company and named it AMWAY to aggravate the extent to which their goods will be subsequently distributed.
After sometimes, Amway became the brand name and trademark of Nutritive. Till date, it is known to be one of the world's most massive MLM.
One of the most significant achievements of MLM over time is the job creation aspect of it. Over the years, it participants have grown geometrically, and as a result, the issue of job problem has become low.
The government over time have had challenges .of creating jobs for the population that keeps growing and also, have been trying their best to motivate investors into partnering with firms to help on that, to make the supply-demand level of job proportionate to the demand level.
Multi-level marketing, being an industry that worth over 170 million pounds has helped over 90 million individuals and its still assisting the several thousand coming under its umbrella every day.
The amazing thing is that it is quite becoming a regular work to some people whom while doing other things to fend for themselves engage in MLM on a part-time basis to supplement their source of livelihood, coupled with the fact that white-collar job does not guarantee job security any longer.
Over the years, Millions of Multi-level marketing schemes have sprung up thereby finding their rightful place in the scheme of things and as a result, are doing excellently well in their chosen line of action.
Some companies who are doing amazingly well in this sector are Oriflame, Foreverliving, GNLD, Herbal life, juice plus, Amway, Free life, Avon, Mary Kay, life vantage, etc.
Right from the birth of MLM, it has gone through many stages which includes the door to door services, handbills, and catalog distribution, hotel meetings and gradually, it entered the internet stage.
It should, however, be noted that computer stage(jet age) is the father of modern science which cuts across barriers, age group, nationality, personality, and intelligence. Still expecting the next stage, MLM will take on.
Regardless of critics and skeptics, it is evident that MLM has come to stay.
Ranging from the several benefits it offers humanity, and one amazing thing about it, is the hope it promises in the not too distant future, and one is being forced to ask what exactly will be in stock for MLM in the future?
Moreover, it should also be noted that it is gradually turning into a multi-trillion dollars sector with more participants trouping in and almost none going out because of the flexibility it offers and the numerous promises made by the producers'.
It has gradually become part of human life, most especially with the advent of computers, smartphone, and other electronic gadgets.
Right from the inception of Man, business has to be the order of the day, right from starting with the trade and barter system up to the use of paper bills. MLM is another industry in business which has come to stay.
Traditional Pyramid, on the other hand, encourages its participants, to pay a certain amount of money, into the system and after that invite other participants, who will be willing to do same. The referred participants will be directly under their host.
The system operates mainly on the referral basis with no sale of commodity involved. Referrals generate Their source of income, and at the end of the day, they are all being scammed.
It is my personal opinion that all multi-level marketing program is a scam.
It is usually an illegal scheme based on hierarchy order, and most times, it is only those at the top, that benefits from such systems.
A lot of people are wondering, and they want to know what the multi-level marketing business is.
Multilevel Marketing Network is regarded as a non-salaried scheme. Its participants get their pay and bonus directly from the end users, and also, it should be noted that the more goods the participants can sell, the more his pay and bonus increases.
It has been theoretically planned to expose more goods into the hands of the end users. There are two types of compensation plan in MLM:
- The direct commission made on sales
- Commission realized on the sale achieved by an individual down the line. These set of people generates their income from the referral system.
MLM Profit And Loss System
Most participants operate at a net loss. It should be noted, that the topmost or few participants gain in this system.
The unfortunate thing about this system is that the few that won are being globalized, attracting potential participants with the results of targeting the end users of the product.
MLM is usually a scheme of the network for people, who wants to have full control of their time, that is why they are known as independent marketer's.
The consumers in the Multilevel marketing networks are merely the end users. The profit and loss are simultaneously dependent on the ability to generate sales, as the salespersons' pocket is directly affected in all of this.
MLM product does generate a million's of dollars annually at the detriment of the sale persons', who get little or no profit at the end of the day, after deducting all the expense incurred in running his independent business.
In essence, the producers' profitability does not correspond with the salespersons' margin, and as a result, the salesperson' is being marginalized.
The anxiety in the heart of the participants, to sell more product in a bid to be among the few that is being globalized, by the producers', creates a great impact and maximizes profit into the system.
This is usually detrimental to the welfare of the salespersons' who goes against all odd.
Emphasis is being placed on greener pastures, which is usually a delusional statement or could be a probability Case as against the theory of ‘can' and ‘will' in a bid to unlock the door, to unlimited monetary freedom.
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Pyramid System Vs. Multi-Level Marketing System
The differences between traditional pyramid system and multi-level market system are based on a legal fiction which itself is a delusional statement.
The legal system characterizes the individual mode of operation. It is generally regarded that MLM, deals with the direct sale of a particular good or product while the traditional pyramid does not deal with that.
There are also chances of gaining ground, strategizing with the intention of maximizing profit by an MLM participant's while in the case of the traditional pyramid, chances of getting to the top of the game is void.
Legal Issue With Multi-Level Marketing – MLM
Over the years, MLM has generated lots of controversies, with the system, being subjected to lawsuits from critics because of the high similarities, it has with the traditional pyramid system.
It operates on a strictly fixed price basis and from time to time, few participants are being selected within the framework and rewarded with a bonus, and this usually serves as a motivation to other participants, in a bid to target the next gift which is often a void promise.
Merit and Demerit of MLM
- Joining, the multi-level marketing network, is usually not free of charge, as it comes with entry fee which is typically used to purchase the first product and its marketing kits.
- It is based on excessive compensation, targeted at generating more profit into the company's account.
- There are two sides to life, and one of the merits of Multi-level marketing scheme is the low level of risks involved, in dealing with customers directly and personally.
- Demand for trusted and tested quality goods, is on the increase, in the society. Then the possibility of selling off the product before it gets to the expiry date or person using the product.
- The value and satisfaction, quality products give to the customers is quite incredible.
Every business-minded individuals most are profit-oriented, and the flow of product idealizes the insatiable quest for income.
- Given the fact that in the corporate world, no matter the amount of time and resources expended on one's job, the income is generally based on the care system. While MLM rewards based on the amount of product being sold out.
- MLM network operates at a low cost, compared to the business venture, where specific considerations have to be put in place before setting out.
I hope you now understand what the multi-level marketing business is. If you wish to succeed in MLM network, you must be fully prepared to study how the system operates.
You must prepare to know what the network is all about, the thin and thick sides of the venture, general overview, and knowledge of the product that will be sold out.
You also need to know the strategies on how to make money via it, since the scheme is a non-salaried venture, and participants are regarded as Independent Distributors.
It is always better to go for the products; an individual is familiar with. The company's compensation plan is Paramount to the participant's welfare.
Identifying the target market is key to business. Therefore, before a participant steps out into committing his time and resources into a venture, he must have a target audience in mind.
Standing out with ideas and innovations makes a business boom. Doing it the old way always produces the same result. A participant must be able to come up with exciting ideas that will make the business boom.
Follow Up is essential in managing a successful business. Now in the first instance, might be a yes later on. A participant must be willing and able to do follow up to get positive results at the end of the day.
What is your thought about multi-level marketing? Are you involved in any multi-level marketing? Feel free to drop a market in my comment area below.
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