Pyramid Selling v Network Marketing
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Why do some people still confuse illegal Pyramid Selling with Network Marketing? Anyway what is Pyramid Selling?
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April 2014
April 2014Ian Lumsden
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Unlike pyramid schemes, multi-level marketing companies are legitimate businesses where members at any level can earn income through the sale of products and services, without needing to recruit new members. In a pyramid scheme, the primary way to make money is by recruiting others to join, whereas in MLM, recruitment is optional and members can earn through product sales alone. Some top investors and celebrities have endorsed multi-level marketing companies as legitimate direct selling businesses.When Is a "Sale" Really a Sale?
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Retailers are often misleading in their use of the term "sale" to persuade shoppers items are discounted when they are not. The Federal Trade Commission and industry groups have set rules for permissible price advertising and sales practices. Specifically, retailers cannot claim a price reduction from a former price unless originally offered regularly, cannot say a price is lower than competitors without verification, and cannot use inflated reference prices. Bait-and-switch advertising where low-priced items are out of stock is also illegal. Complex pricing helps obscure online price comparisons between retailers and prices change frequently during holiday periods.Trade Operations
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This document compares and contrasts franchising and multi-level marketing (MLM). Franchising involves a franchisor licensing their business model, brand and systems to franchisees for an initial fee and ongoing royalties. MLM involves independent distributors recruiting other distributors to build a sales network, with commissions paid on downstream sales. While both allow for business expansion, franchising has higher start-up costs while MLM emphasizes recruiting over direct sales.When Is a Sale a Sale?
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Be wary when you see the word "sale." Sometimes, this term is used to persuade consumers to buy items that are not really on sale. Read this 際際滷Share post to learn more. Be a smart shopper.Network Marketing
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The document discusses network marketing and dispels myths about pyramid schemes. Network marketing involves selling products through personal relationships and referrals, allowing people to build a business and leverage their time. It provides advantages like residual income and personal development. Successful past network marketing companies are provided as examples. The key is to look for a company that prioritizes representatives, has a growing business with a proven system, and a clear compensation plan.Ed Batista, The Art of Self-Coaching @StanfordBiz, Class 6: Vulnerability
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The document discusses multi-level marketing and direct selling. It defines direct selling as marketing and selling products directly to consumers away from a fixed retail location. Multi-level marketing is described as a strategy where salespeople are compensated for their own sales as well as the sales of those they recruit, creating multiple levels of compensation. While multi-level marketing and network marketing are generally considered synonyms, network marketing is the preferred modern term. The document outlines the differences between legitimate multi-level marketing businesses and illegal pyramid schemes, noting that pyramid schemes focus solely on recruitment rather than legitimate product sales.Getting people into network marketing
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Network Marketing is the new way of doing business now. It is the business based on YOU. It makes you free, especially when it comes to Compare Network Marketing Features
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This document compares network marketing, multi-level marketing, and pyramid schemes. It notes that pyramid schemes are fraudulent as they involve no real product and commissions are based only on recruiting new members. Multi-level marketing (MLM) is legal and involves distributing products through distributors who can recruit others and earn commissions from their sales. MLM focuses on selling products, while pyramid schemes focus on recruitment. Legitimate MLM opportunities require minimal startup costs and buy back unsold inventory, have a real market for their products, and emphasize product sales over recruitment.HOLTON BUGGS
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Network marketing, also known as multi-level marketing (MLM), is a legitimate way to distribute products and services through a network of people. In MLM, individuals sell products and services and recruit others to do the same, earning commissions both from their own sales and the sales of those they recruit. Unlike direct sales which focuses solely on individual sales, MLM emphasizes building a network by sharing products with friends and family. As the network grows, so does the potential value and sales. Success comes from building the network, not aggressive marketing or sales to strangers.Ultimate Multi Level Marketing Secrets
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Do You Feel that Your Salary Does Not Reflect The Hard Work You Put In? Ever Considered Making a Switch To a Different Business? What If You Could Work From The Comfort of Your Own Home, What if You Had The Chance of Being Your Own Boss?
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People often confuse MLM with pyramid marketing; however there is very clear distinction between the two approaches: pyramid marketing is about getting your money and then using you to recruit other distributors; MLM, on the other hand, is about moving the product through a larger network of distributors so that the business can increase sales volume.
Another difference between MLM and pyramid marketing is that Pyramid marketing requires each level to DOUBLE before a new level is created so it isn't fair to people lower down in the levels and also unethical. MLM, however, awards a commission based upon the volume of product sold through own sales efforts as well as that of the down line organization.
Since MLM faces the risks of initiating a business that has not been tested by the customers is not recognized, people prefer to wait a coupe of years before joining. Hence, they also witness the companys track-record and reliability.The Ultimate Multi Level Marketing Secrets.pdf
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This document provides an overview of multi-level marketing (MLM) and tips for succeeding in MLM. It discusses what MLM is, how it differs from pyramid schemes, and the typical structure and growth opportunities within MLM firms. The document outlines steps for finding a good MLM business, including investigating the company, product, and compensation plan. It also covers understanding the MLM model, developing compensation plans, comparing MLM to traditional marketing, and advantages and disadvantages of MLM. The document aims to provide everything one would need to know about MLM.The ULTIMATE Multilevel Marketing Secrets
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What is Multi-Level Marketing?
Multi-level Marketing, or MLM, is a marketing strategy which creates a down line of distributors and a hierarchy of multiple levels of compensation. The sales force is compensated not only for their own sales but also for the sales of the people they help recruit. Firms, having a large product base, often cannot employ equivalent sales force; and believe they would be better off without the traditional approach. Hence, they implement MLM to survive competition from multi-nationals.
MLM is also known as Network Marketing because it utilizes a network of individual customers to hit other potential customers. In other words, every individual customer serves as a sales representative.How to Easily and Quickly Create Endless Leads and Downlines in Your Network ...
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Do You Feel that Your Salary Does Not Reflect The Hard Work You Put In? Ever Considered Making a Switch To a Different Business? What If You Could Work From The Comfort of Your Own Home, What if You Had The Chance of Being Your Own Boss?
Do You Dream of Becoming a Head Honcho? Is Your Sales Job Not Lucrative Enough? Do You Feel that Your Salary Does Not Reflect The Hard Work You Put In? Ever Considered Making a Switch To a Different Business? What If You Could Work From The Comfort of Your Own Home, What if You Had The Chance of Being Your Own Boss?
People often confuse MLM with pyramid marketing; however there is very clear distinction between the two approaches: pyramid marketing is about getting your money and then using you to recruit other distributors; MLM, on the other hand, is about moving the product through a larger network of distributors so that the business can increase sales volume.
Another difference between MLM and pyramid marketing is that Pyramid marketing requires each level to DOUBLE before a new level is created so it isn't fair to people lower down in the levels and also unethical. MLM, however, awards a commission based upon the volume of product sold through own sales efforts as well as that of the down line organization.
Since MLM faces the risks of initiating a business that has not been tested by the customers is not recognized, people prefer to wait a coupe of years before joining. Hence, they also witness the companys track-record and reliability.
Below are the chapters that you are about to explore:
The Multilevel Marketing Concept
Understanding the MLM Situation and Opportunities
Understanding the MLM Model
Tips to Develop Appropriate Compensation Plan
How to Find a Good MLM Business
Multilevel Marketing versus Traditional Marketing
How to Improve Your Multilevel Marketing Skills
Essentials of MLM Business
The Legality of Multi level Marketing
Multi level Marketing Scams and Tips to Avoid Them
Online Multi Level Marketing Opportunities
Relationship Building through Multilevel Marketing
Generating Leads
Measuring Multilevel Marketing Performance
Advantages of Multi-level Marketing
Why MLM Goes Wrong- the Companys Perspective
Secrets of Multi-level Marketing
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The history of network marketing originated in the 1940s when California Vitamins discovered they could generate more sales by having many sales representatives sell small amounts of product compared to few representatives selling large amounts. They also found most new customers came through referrals. This led to the development of a commission structure and the birth of network marketing. In 1959, Richard DeVos and Jay Van Andel founded Amway, which was based on the same network marketing model and became very successful. Currently, there are over 50 million people worldwide involved in network marketing, generating nearly $100 billion annually. The network marketing industry has grown significantly and is predicted to continue growing as more companies adopt this model.Surviving the MLM Business with Ease!.pdf
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The document provides guidance on how to survive in the multi-level marketing industry. It discusses choosing the right company by considering factors like the product background, marketing plan, team, and industry trends. It also describes different types of people who join MLMs and highlights the importance of exposure to the industry before selecting a company. The overall message is that success requires choosing a company and approach that suits one's goals and abilities.MLMSurvivalGuide-2erx5.pdf
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The document provides guidance on how to survive in the multi-level marketing (MLM) industry. It discusses choosing the right MLM company by considering factors like the product background, marketing plan, team, and industry trends. It also describes different types of people who join MLMs and highlights the importance of exposure to the industry before selecting a company. The overall aim is to help readers make informed choices to successfully build an MLM business.The ultimate multi level marketing
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The Multilevel Mar The Multilevel Mar The Multilevel Mar The Multilevel MarThe Multilevel Mar The Multilevel Mar keting Conceptketing Concept keting Concept keting Concept
What is Multi-Level Marketing?
Multi-level Marketing, or MLM, is a marketing strategy which creates a down line of distributors and a hierarchy of multiple levels of compensation. The sales force is compensated not only for their own sales but also for the sales of the people they help recruit. Firms, having a large product base, often cannot employ equivalent sales force; and believe they would be better off without the traditional approach. Hence, they implement MLM to survive competition from multi-nationals.
MLM is also known as Network Marketing because it utilizes a network of individual customers to hit other potential customers. In other words, every individual customer serves as a sales representative.
Multi-Level Marketing Vs. Pyramid Marketing
People often confuse MLM with pyramid marketing; however there is very clear distinction between the two approaches: pyramid marketing is about getting your money and then using you to recruit other distributors; MLM, on the other hand, is about moving the product through a larger network of distributors so that the business can increase sales volume.
Another difference between MLM and pyramid marketing is that Pyramid marketing requires each level to DOUBLE before a new level is created so it isn't fair to people lower down in the levels and also unethical. MLM, however, awards a commission based upon the volume of product sold through own sales efforts as well as that of the down line organization.
Since MLM faces the risks of initiating a business that has not been tested by the customers is not recognized, people prefer to wait a coupe of years before joining. Hence, they also witness the companys track-record and reliability.MLM Marketing Explained What It Is, Why Its Effective..pdf
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MLM Marketing Explained: What It Is, Why Its Effective, and When to Use It Multi-level marketing (MLM), also appertained to as direct selling or network marketing, is a deals approach where products are sent directly to guests through independent deals representatives. MLM enterprises frequently attract new members by offering the prospect of fiscal success and autonomy. Although not innately against the law, multitudinous MLMs have gained notoriety for their contentious business tactics, and some have been exposed as illegal aggregate schemes. Network Marketing Explained
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The document discusses the history and structure of direct selling and network marketing. It begins with definitions of direct selling and describes how early companies in the 1940s began allowing friends and family to also sell products, creating networks of representatives. Over time, more companies adopted this model despite some legal issues in the 1970s. The compensation structures of various network marketing plans like unilevel, matrix, stair step, and binary plans are explained. The document also addresses common questions about direct selling and how it has evolved as a business model and career path through social media marketing and changing economic conditions.Not A Pyramid
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Network marketing, also called multi-level marketing, is a system for distributing goods and services through independent salespeople or distributors. Distributors earn money by selling products and recruiting other distributors to join their sales organization or downline. They earn commissions or bonuses on sales generated by their downline. It is not a pyramid scheme, as it focuses on product sales rather than recruitment alone. Network marketing provides opportunities for financial freedom and control over one's schedule by allowing people to build a business from home selling products part-time or full-time.Your MLM Sponsor
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In a job, you are employed by an employer and paid an hourly wage for contracted hours of work each week. In network marketing, you are self-employed and run your own business selling products or services of an MLM company. You are paid based on your own sales and for sales of others you recruit to the business. Network marketing allows for more flexibility in hours and location of work compared to a traditional job structure. Pay scales are also different, with network marketing offering the potential to earn unlimited income based on your own and your recruits' efforts.More Related Content
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People often confuse MLM with pyramid marketing; however there is very clear distinction between the two approaches: pyramid marketing is about getting your money and then using you to recruit other distributors; MLM, on the other hand, is about moving the product through a larger network of distributors so that the business can increase sales volume.
Another difference between MLM and pyramid marketing is that Pyramid marketing requires each level to DOUBLE before a new level is created so it isn't fair to people lower down in the levels and also unethical. MLM, however, awards a commission based upon the volume of product sold through own sales efforts as well as that of the down line organization.
Since MLM faces the risks of initiating a business that has not been tested by the customers is not recognized, people prefer to wait a coupe of years before joining. Hence, they also witness the companys track-record and reliability.The Ultimate Multi Level Marketing Secrets.pdf
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This document provides an overview of multi-level marketing (MLM) and tips for succeeding in MLM. It discusses what MLM is, how it differs from pyramid schemes, and the typical structure and growth opportunities within MLM firms. The document outlines steps for finding a good MLM business, including investigating the company, product, and compensation plan. It also covers understanding the MLM model, developing compensation plans, comparing MLM to traditional marketing, and advantages and disadvantages of MLM. The document aims to provide everything one would need to know about MLM.The ULTIMATE Multilevel Marketing Secrets
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Multi-level Marketing, or MLM, is a marketing strategy which creates a down line of distributors and a hierarchy of multiple levels of compensation. The sales force is compensated not only for their own sales but also for the sales of the people they help recruit. Firms, having a large product base, often cannot employ equivalent sales force; and believe they would be better off without the traditional approach. Hence, they implement MLM to survive competition from multi-nationals.
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Do You Dream of Becoming a Head Honcho? Is Your Sales Job Not Lucrative Enough? Do You Feel that Your Salary Does Not Reflect The Hard Work You Put In? Ever Considered Making a Switch To a Different Business? What If You Could Work From The Comfort of Your Own Home, What if You Had The Chance of Being Your Own Boss?
People often confuse MLM with pyramid marketing; however there is very clear distinction between the two approaches: pyramid marketing is about getting your money and then using you to recruit other distributors; MLM, on the other hand, is about moving the product through a larger network of distributors so that the business can increase sales volume.
Another difference between MLM and pyramid marketing is that Pyramid marketing requires each level to DOUBLE before a new level is created so it isn't fair to people lower down in the levels and also unethical. MLM, however, awards a commission based upon the volume of product sold through own sales efforts as well as that of the down line organization.
Since MLM faces the risks of initiating a business that has not been tested by the customers is not recognized, people prefer to wait a coupe of years before joining. Hence, they also witness the companys track-record and reliability.
Below are the chapters that you are about to explore:
The Multilevel Marketing Concept
Understanding the MLM Situation and Opportunities
Understanding the MLM Model
Tips to Develop Appropriate Compensation Plan
How to Find a Good MLM Business
Multilevel Marketing versus Traditional Marketing
How to Improve Your Multilevel Marketing Skills
Essentials of MLM Business
The Legality of Multi level Marketing
Multi level Marketing Scams and Tips to Avoid Them
Online Multi Level Marketing Opportunities
Relationship Building through Multilevel Marketing
Generating Leads
Measuring Multilevel Marketing Performance
Advantages of Multi-level Marketing
Why MLM Goes Wrong- the Companys Perspective
Secrets of Multi-level Marketing
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In this ebbok you will get to learn about gain from the person-to-person approach and share the advantages of an independent business opportunity with your close friends, become proactive and take your life into your own hands and much more in order to make profits for your online business.Marketing Strategy of Amway
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The document provides an acknowledgement and thanks from the student to various parties who helped with the completion of their marketing research program. It expresses gratitude to their program manager at Neelkanth Group of Institution for providing the opportunity. It also thanks their project guide for their guidance and support. Finally, it expresses appreciation to all respondents and other individuals who provided cooperation and assistance.Mlm introduction
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The history of network marketing originated in the 1940s when California Vitamins discovered they could generate more sales by having many sales representatives sell small amounts of product compared to few representatives selling large amounts. They also found most new customers came through referrals. This led to the development of a commission structure and the birth of network marketing. In 1959, Richard DeVos and Jay Van Andel founded Amway, which was based on the same network marketing model and became very successful. Currently, there are over 50 million people worldwide involved in network marketing, generating nearly $100 billion annually. The network marketing industry has grown significantly and is predicted to continue growing as more companies adopt this model.Surviving the MLM Business with Ease!.pdf
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The document provides guidance on how to survive in the multi-level marketing industry. It discusses choosing the right company by considering factors like the product background, marketing plan, team, and industry trends. It also describes different types of people who join MLMs and highlights the importance of exposure to the industry before selecting a company. The overall message is that success requires choosing a company and approach that suits one's goals and abilities.MLMSurvivalGuide-2erx5.pdf
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This document provides an overview of reasons why someone may choose to join a multi-level marketing (MLM) company and strategies for surviving in the MLM industry. It discusses that most people in MLM operate at a loss. However, the document aims to educate people on choosing a suitable MLM opportunity and avoiding problems. It outlines common reasons for joining an MLM as making money, saving on products, meeting new people, and personal growth. The document then elaborates on each of these motivations and considerations for evaluating different MLM opportunities.MLMSurvivalGuide-HowtoSurviveintheNetworkMarketingJungle.pdf
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What is Multi-Level Marketing?
Multi-level Marketing, or MLM, is a marketing strategy which creates a down line of distributors and a hierarchy of multiple levels of compensation. The sales force is compensated not only for their own sales but also for the sales of the people they help recruit. Firms, having a large product base, often cannot employ equivalent sales force; and believe they would be better off without the traditional approach. Hence, they implement MLM to survive competition from multi-nationals.
MLM is also known as Network Marketing because it utilizes a network of individual customers to hit other potential customers. In other words, every individual customer serves as a sales representative.
Multi-Level Marketing Vs. Pyramid Marketing
People often confuse MLM with pyramid marketing; however there is very clear distinction between the two approaches: pyramid marketing is about getting your money and then using you to recruit other distributors; MLM, on the other hand, is about moving the product through a larger network of distributors so that the business can increase sales volume.
Another difference between MLM and pyramid marketing is that Pyramid marketing requires each level to DOUBLE before a new level is created so it isn't fair to people lower down in the levels and also unethical. MLM, however, awards a commission based upon the volume of product sold through own sales efforts as well as that of the down line organization.
Since MLM faces the risks of initiating a business that has not been tested by the customers is not recognized, people prefer to wait a coupe of years before joining. Hence, they also witness the companys track-record and reliability.MLM Marketing Explained What It Is, Why Its Effective..pdf
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MLM Marketing Explained: What It Is, Why Its Effective, and When to Use It Multi-level marketing (MLM), also appertained to as direct selling or network marketing, is a deals approach where products are sent directly to guests through independent deals representatives. MLM enterprises frequently attract new members by offering the prospect of fiscal success and autonomy. Although not innately against the law, multitudinous MLMs have gained notoriety for their contentious business tactics, and some have been exposed as illegal aggregate schemes. Network Marketing Explained
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油
The document discusses the history and structure of direct selling and network marketing. It begins with definitions of direct selling and describes how early companies in the 1940s began allowing friends and family to also sell products, creating networks of representatives. Over time, more companies adopted this model despite some legal issues in the 1970s. The compensation structures of various network marketing plans like unilevel, matrix, stair step, and binary plans are explained. The document also addresses common questions about direct selling and how it has evolved as a business model and career path through social media marketing and changing economic conditions.Not A Pyramid
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油
The document discusses network marketing and distinguishes it from pyramid schemes. Network marketing involves selling products through personal relationships and referrals. It has a history of successful companies like Tupperware that use multi-level marketing techniques to distribute products. Network marketing allows people to leverage their time and build a residual income from recurring payments on sales. When looking for a network marketing opportunity, considerations include a valuable product, low startup costs, a growing company, and a proven system for success.What is network marketing
What is network marketingSavanna Williams
油
Network marketing, also called multi-level marketing, is a system for distributing goods and services through independent salespeople or distributors. Distributors earn money by selling products and recruiting other distributors to join their sales organization or downline. They earn commissions or bonuses on sales generated by their downline. It is not a pyramid scheme, as it focuses on product sales rather than recruitment alone. Network marketing provides opportunities for financial freedom and control over one's schedule by allowing people to build a business from home selling products part-time or full-time.More from MLM UK (6)
Your MLM Sponsor
Your MLM SponsorMLM UK
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Your MLM sponsor should provide guidance and support as you start your MLM business. This includes creating a plan with goals and actions, communicating regularly, and ensuring you understand how to promote products and recruit others. If your sponsor does not provide adequate support, you should seek help from their sponsor or company leadership. While online support can help, it is not a replacement for guidance from your direct sponsor.Job v Network Marketing
Job v Network MarketingMLM UK
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In a job, you are employed by an employer and paid an hourly wage for contracted hours of work each week. In network marketing, you are self-employed and run your own business selling products or services of an MLM company. You are paid based on your own sales and for sales of others you recruit to the business. Network marketing allows for more flexibility in hours and location of work compared to a traditional job structure. Pay scales are also different, with network marketing offering the potential to earn unlimited income based on your own and your recruits' efforts.Residual income in MLM - What is it?
Residual income in MLM - What is it?MLM UK
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MLM Network marketing Companies have Residual Income as part of their Compensation Plans, but what exactly is it?
Pyramid Selling v Network Marketing
- 1. Pyramid Selling v Network Marketing Occasionally when trying to explain MLM ( or Network marketing ) to a potential recruit you will hear the words ah but isnt that pyramid selling? Some people confuse Pyramid Selling with MLM because of the structure of the compensation plan with its various levels, tiers or positions in the organisation. Before I try & explain why this confusion occurs lets first discuss what exactly Pyramid Selling is ( or was, since its been illegal for many years ). A typical Pyramid Selling scheme would work like this; at the top of the pyramid would be the founder or founders of the scheme who would have a product that they wanted to get to market (or thats what they would tell recruits) so they recruited other people to sell the products. These new recruits would be required to buy a certain amount of product at a wholesale price, its more than likely that the price would be determined by how much product they bought, therefore encouraging recruits to buy lots of product to get it cheaper. There would be a retail price for the product which was the price for the general public, however recruits would be encouraged, often through incentives, to recruit others & get them to buy product at the wholesale price plus a mark-up, these 2nd tier recruits would be encouraged to do the same i.e. recruit more people & get them to buy product at a further mark- up. The major flaw in this type of organisation was that most of the product was bought by recruits & not customers & if a recruit was on a low tier they would be buying product at a wholesale price that was greater than the retail price, meaning that the only way they could get rid of product would be to try & get more recruits to buy from them. This is why lots of people ended up with garages full of product that they couldnt get rid of. The only people who benefitted from this type of scheme were the founders of the organisation & possibly the top couple of tiers of recruits. As this system was mainly focused on recruiting reps & not customers, plus the way it was inherently unfair on most reps it was made illegal in most countries. So why do people still confuse this illegal system with MLM? Its because of the layers or tiers of reps or recruits that may spark a long distant memory of the bad publicity that surrounded Pyramid Selling. When these companies many years ago held recruitment events they would draw out the structure of the organisation in a Pyramid Shape showing the different levels or tiers that recruits would be placed upon depending, often on how much product they bought or how many people they had recruited. If you see someone explaining a MLM business structure today you will still see that it has levels or tiers in the shape of a Pyramid & so this is where sometimes I have to say not very often someone will confuse it with the old illegal Pyramid Selling. One thing to bear in mind is that if you draw out the structure of any company you will find its in the shape of a Pyramid! MLM today is a much respected form of direct selling & has worldwide sales of $167 Billion, a far cry from the old days of Pyramid Selling. Exponents of Network Marking include Robert Kiyosaki, Donald Trump, Bill Gates, and Warren Buffet. Indeed Bill Gates is quoted as saying If I would be given a chance to start all over again, I would choose Network Marketing.