What Is MLM Formula

The MLM (Multi-Level Marketing) strategies are used by businesses that sell their products or services directly to the customers. It is legitimate marketing, distribution, and business strategy used throughout the world and is entirely legitimate and legal. Also called network or referral marketing, the MLM strategy involves the engagement and recruitment of distributors and representatives by the companies. These representatives and distributors are paid a commission on the sales they make, and on the further recruitments, they do. Members of a multi-level marketing chain will receive a certain incentive, commission, or a bonus based on the network they can build. It is a good motivation for the members to grow their network and to hire and recruit more and more members as they can earn directly through it. MLM is based on networks and therefore there is no full-time workforce for it. The company also gathers its revenues through a non-salaried and commission-based workforce.

THE TWO EARNING AND REVENUE STREAMS OF AN MLM

Members of the MLM earn money through two major revenue sources. One is when they sell their product or the service directly to the end customers and earn commission based on it. The second source of revenue is related to the wholesale purchases that occur when sales happen through the other members that are recruited by the member. The recruiting participants or the members are also called the “downline” representatives and distributors in the MLM chain.

THE MLM FORMULA

Most of the sales that occur on a multi-level marketing chain and platform are through word-of-mouth referrals. People may buy from their friends, acquaintances, family members, and others they know.

Another major revenue source of MLM marketing is the recruitment of new members to the chain. These can be the people who are looking for some part-time work opportunity and also the acquaintances of the recruiter, among others.

THE AID OF SOCIAL MEDIA

Social media and networking websites including Facebook and Twitter are also impacting the popularity of multi-level marketing networks positively. The multi-level marketing distributors and the chain members directly post their messages on the social media channels. Those interested may contact them back and join the chain. It is a quite affordable way to reach out to more people and to recruit candidates that can bring even more members to a recruitment chain and an MLM network. Posting communication messages on social media networking websites including Facebook costs nothing. However, there is also an option of “paid” advertisements available on social media.

THE MULTIPLE LEVELS OF WORKFORCE

The network and the proliferation of the marketing channel in an MLA network result in multiple layers of workforces. After a period and due to perseverance and consistent efforts, those entering an MLM chain and staying in it can achieve good profits. They also make earnings through the sales made by distributors that are hired by them. The company initiating the MLM networks and chains may also reward the best performers not only through money and cash rewards but through other awards as well including holiday packages. Companies can employ a much larger workforce due to the good performers and can also gather immense revenues.

A recruit may be required to purchase the company’s product as well at the time he/she joins the MLM network. He/she also takes the membership of the marketing network at the same time. It is a two-pronged strategy where a company not only sells a product to a new person but also hires him or her as a recruit who recruits even more members.

TRAINING AND SUPPORT

Due to the nature of marketing operations and the business activities, the MLM companies can’t provide intensive training that the other companies hiring full-time employees can provide to their employees. However, due to the proliferation and innovations in digital communication technologies including the Internet, virtual communications, and the web, the MLM companies’ distributors, members, and marketers can also provide training to their recruits to a great extent. The new communication methods not only provide for training and community interactions but also ensure a better degree of control. While control and training may not be as extensive on an MLM network, it is still better now due to the development of new technologies.

THE LEGALITY OF MLM NETWORKS

The MLM networks are entirely legal in the USA and many other countries of the world. The Federal Trade Commission (FTC) regulates multi-level marketing plans in the USA. MLM is legal in Canada as well, the only exception being cases that go against the Competition Act and law. However, there are not many regulations in this regard in many different countries and the concept and the business segment are poorly defined in these places.

PROS OF MLM

Some of the advantages of joining the MLM network include:

• Work at your hours and be your boss.

• Join an entirely legal framework of business.

• An unlimited and unrestricted revenue and income potential that may go up to much higher levels than you anticipate.

• Generate more side income and have an additional revenue source while working in your other full-time job or business sphere.

• Be able to help those who want to generate more income and provide them with a legal and profitable work opportunity at home.

However, there can also be certain disadvantages of MLM marketing networks. For instance, the company may not be legitimate and may require a careful review before joining. Income does not start to come immediately and as seen in the case of salaries. You may have to be patient for some time before you can generate any worthwhile income. However, with consistent efforts and in due course of time, you will be able to generate good amounts of money.

CONCLUSION

Those who want to be a representative, distributor, and member of the multi-level marketing (MLM) network should be investigating the company carefully and thoroughly. Fortunately, there are many new technologies including the Internet, web, virtual communications software, instant messaging applications, 5G, and others that can provide for prompt and agile communications that are the backbone of MLM marketing nowadays. It is a good source of side income for many people who are not employed in full-time jobs, and these include retired people, housewives, and students. You can give a few hours of MLM marketing every day and also build your network over a period. The more you recruit, the higher you go up in the marketing level, and the more money you stand to make.