An Introduction to Multi Level Network Marketing

What is the difference between the legal multi level network marketing and the illegal and costly scams of pyramid selling?

Multi Level Network Marketing is a legal combination of networking and franchising. The networking elements create a business through your own talent, perspiration, dedication and skill. The franchising element involves you representing and selling the products or services of an existing and successful organisation. For example, Avon Cosmetics or The Utility Warehouse, both well-known companies operating in the multi level network marketing field. These companies and many others like them have great track records, they support their distributors with marketing material and make sure they are well trained on their range of products, keeping them up to date on new product launches and providing guidance on a regular basis.

Simply put, companies operating multi level networking marketing schemes recruit individuals at the very first level. These individuals make their money by selling the products or services of the franchisee to their own personal network of contacts. As their business grows, these individuals continue selling but at the same time, they step up to another 'level' to become distributors. This is achieved by recruiting their own customers to act as salesmen and women reporting to them. In time, the network spreads with the distributor benefiting from sales generated from his own efforts and commission from the efforts of those people working with him. This is the essence of multi level network marketing. The distributor can also gain from bonuses earned from meeting performance related targets on product sales or from recruiting more new members to his MLM network.

So, how does this multi level network marketing system differ from pyramid selling? Fundamentally a pyramid selling operation is aimed at one thing and one thing only - getting your money. And then, to use you to recruit others to get their money too! The business model that drives MLM is one focused on selling products or a reputable service by increasing the distribution base.

5 Tips to Spot a Pyramid Selling Scheme

1. Are you asked to 'invest' a large amount of money up-front to become a distributor? - Reputable multi level network marketing companies do not require large set up fees.
2. Are you required to purchase a large amount of stock up-front with no chance of any stock buy-back? Reputable MLM companies set low initial purchase requirements - they understand you need to sample the product and test the water before making a major commitment.
3. Is there any mention of marketing support - MLM companies have tried and tested sales packs to educate the representative and to help inform and persuade the customer as to the benefits of their proposition.
4. Are you offered commissions for recruiting new members at an early stage - especially if the emphasis is on introducing new distributors rather than selling products. Once again MLM companies focus on sales achievement.
5. Is there a solid training scheme in place with your own head office contact for ongoing training updates

If there's a cross in the box against any of these 5 points - think again. Stick to an established player in multi level network marketing and gain your just rewards!