Affiliate Marketing Or Network Marketing?

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Affiliate Marketing Or Network Marketing?

MLM businesses are subject to a high amount of skepticism in most parts of the world. That’s because MLMs, or multilevel marketing businesses, are only good businesses in theory. In practice many of them are actually scams of an illegal nature and end up either hurting the people recruited to work for the business, or simply take advantage of them without reward. Not all MLM businesses are bad, of course. Some are actually perfectly legitimate companies with honest intentions, and can help its affiliates earn a decent living.

The idea of a multilevel marketing business is to sell a product, or a series of products, by recruiting a vast number of small franchisees. The franchisees purchase product at the company’s wholesale price and then sell those products to clientele that they find on their own. All franchisees are recruited by other franchisees. The “multilevel” aspect to all of this comes into play here.

When one franchisee recruits another, that new person ends up on a lower level. The original franchisee then gets a cut of the profits made from the new person, and any other new people they recruit. Multilevel marketing plans differ from company to company, but generally speaking the profits trickle up the ladder from level to level. The company gets a cut from everyone, the original franchisees get a cut from their own sales and everyone they recruit and everyone recruited by those people and so on.

In the end, everyone in the business earns money from all of the sales that take place on lower levels. That said, limitations are usually in place to regulate just how far that can go. Some MLMs limit the number of franchises that can exist on any given level, meaning one franchisee can only take profits directly from a certain number of others. Then there are often limits on how far down the ladder profits can come from. Usually, a franchisee can only profit from the two or three tiers directly below them.

With every major MLM in existence, a franchisee must remain actively involved in the business in order to continue to benefit from all of their recruits. Active involvement usually means reaching a certain sales goal in a given month. There are also stipulations in many cases where they can only profit from a recruit if that recruit also reaches a certain sales goal. This promotes the idea of mentorship, for everyone is encouraged to help boost the others’ sales.

Multilevel marketing businesses are involved in a wide variety of product lines. The most famous of all of these is makeup, infamously represented by the worldwide MLM leader Avon. Other successful MLMs deal in toys, Tupperware, and other household supplies. There are even a few growing MLMs that deal exclusively in sex toys.

Because the business model so closely resembles that of a pyramid scheme, MLMs are subject to a great deal of scrutiny. A lot of lawsuits have been filed over the years against MLMs, and many have been fined for practicing bad business. Anyone getting involved with a multilevel marketing business is therefore encouraged to do their research first, to make sure it’s all on the level.

By: steve allbrighton

Article Directory: http://www.articledashboard.com

My internet business

Make money online from home.  100% money back guarantee.  Full training and support from top income earners and trainers in the industry. Fully legitimate, fully ethical, fully proven. If you can follow simple step by step instructions, this is for you.  This is real work at home and if you are looking for a get rich quick, then stay at your job.  If you are looking for a real online business from home to replace your job, congratulations, you found it here.

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