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What is MLM?
MLM stands for Multi-Level Marketing.
It is a common business model, and is perhaps the most efficient business model when it comes to getting a product into the marketplace.
All "multi-level" means is that one is paid on multiple levels of their business organization.
And that is all that it means.
To illustrate...
Imagine you are a real estate broker. You have an office that you lease, desks, computers, phones, etc. Maybe you employ a secretary or receptionist. You make money by selling houses. You list properties for sale and people contact you with interest in buying a home and you sell it to them. For that, you earn a commission.
But as a broker, you may also hire other real estate agents to help you sell houses.
There are advantages for you because, overall, you will sell more houses due to having more help and more sales people.
There are advantage for the real estate brokers who you hire, as they are able to be mentoring from you, able to take advantage of your large base of listings, able to say they are part of, "ABC Real Estate," (established, trusted name) as opposed to saying, "I'm brand new and have no credibility, etc.
You get help.
They get training and other advantages.
Possibly a new real estate agent may sell one or two homes per year on their own, for example. But when part of your brokerage, they sell 12 or 20 or more.
The point is, there are advantages for both parties.
As the broker, you have certain obligations to your agents if you want to make more money. In order to get your agents to make you more money, they have to make more money. So it is to your advantage (and theirs) if you work with them to help them become better in their own business.
And when one of your agents sells a house, they earn a commission, AND you earn a commission.
You are getting paid on MULTIPLE LEVELS of your organization.
That is multi-level marketing.
And that is all "MLM" means.
There is nothing more to it whatsoever.
There are literally thousands of MLM companies selling tens of thousands of amazing products and services all over the world.
Prior to 1979 some people mistakenly believed that "MLM" created an unfair situation for some consumer because "all the money is made by those at the top." This was proved to be false in a very famous court case involving the FTB v Amway. The evidence proved that it was not the people at the "top" who made most of the money, but was in fact the people who were the most productive. Their position in the organizational structure was irrelevant.
That 1979 case proved, beyond any doubt that MLM is a perfectly legitimate and, in fact, efficient way of marketing products and of building business organizations.
Some people still have the mistaken notion that here is "something wrong" with multiple levels of compensation.
Strangely enough, you will find, if you actually survey people and ask them what they think about MLM, that of those who say they have a negative view of MLM, very few of them can define what MLM is, and the ones who try do not correctly understand what MLM is.
You will find that bringing people to understand what MLM really is typically results in the person saying, "Oh, that's what it is? Well, that's cool!"
Any successful business person prefers to be paid on multiple levels.
The fact is that, with MLM, you can only really excel if you help others succeed.
It is not possible to create large incomes in an MLM business model unless you are helping many customers and other IBOs get exactly what they want.
Sometimes, even today, some ignorant people still associate MLM with a "pyramid scheme". This is utter stupidity. A "pyramid scheme" is an ILLEGAL operation when people are paying simply to be part of an organizational structure and others are earning commission from that payment, where there is no legitimate product being sold.
That has nothing to do with legitimate MLM business, and that "pyramid scheme" should be illegal, and it is.
In MLM, money is only exchanged for PRODUCT or SERVICE. There are no payment charged or collected simply for allowing someone access to "the scheme".
Also, commission are ONLY paid on product or service sales. Commission are never paid simply for referring other to participate in some money-transfer scheme.
Other ignorant people call MLM a "ponzi scheme". This is another utter stupidity and such people either don't understand what MLM is, or they don't understand what a Ponzi scheme is.
A Ponzi scheme is an investment fraud that pays existing investors with funds collected from new investors. Ponzi scheme organizers often promise to invest your money and generate high returns with little or no risk. But in many Ponzi schemes, the fraudsters do not invest the money. Instead, they use it to pay those who invested earlier and may keep some for themselves.
This has nothing to do with MLM.
MLM is simply a business structure that allows compensation on multiple levels of the organization.
It encourages team work and gives team leaders in such an organization strong incentive to help their team of IBOs because the more sales their IBOs make, the more money is earned by the team leaders, as all those in the organization are sharing the revenues.
Some unethical people do promote MLM is a fraudulent way, and try to sell others on the idea that they can "get rich without having to do anything," which is completely absurd, obviously. If you see someone promoting in that fashion, run away quickly and report them to the FTC or to their company.
Creating success in MLM takes work, focus and dedication, just as it does with any other business.
The question you have to ask yourself is, "Would I rather be paid on only my own work each week, or would I rather put in the work for months or years to build a solid organization, so that I can be paid based on the overall organization production that I worked to hard to build?"
I'm sure you'll agree that having the opportunity to build a large company is a much better option.
