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SpinDistribute.com Article Directory

The following article was published in our article directory on March 28, 2014.
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Marketing Schemes: What is MLM?

Article Category: Internet

Author Name: Colin Burnett

MLM stands for "multi-level marketing", which is also sometimes referred to as network marketing. It is basically a system that aims to sell goods or services via a network of distributors. Each of these distributors is then responsible and rewarded for getting new recruits to the MLM system. What happens is that a sales representative gets his or her own customers at the same time recruits another sales rep to do the same thing. If you've ever encountered a situation where you'll get a discount on your following purchase if you refer a friend, then this is already an example of MLM in action.

MLM is not to be confused with pyramiding schemes, however. In pyramiding schemes, huge returns are promised to the investor when s/he makes a single investment, usually through the investments the people s/he recruited. Technically speaking, pyramid schemes are illegal because the services and products involved in it do not have any value. The goal of this scheme is simply to recruit members to pay off the investment fees of products and services that aren't really openly promoted.

If you are thinking whether MLM is for you or not, here are some things that you should consider:

Sales Work

Offering products or services in exchange of money often means sales. If the MLM company you are applying for informs you that they will be sharing ideas then it is still considered as sales. You will also be expected to sell to the people you know . Companies refer to this process as "selling to your warm market". The idea here is that your relationships with family, friends, and colleagues are warmer than the connections you have with strangers. MLM companies will urge you to sell to people you know because of the comfort level you already have when you interact with them.

However, the downside of this is that people in general do not like or appreciate being sold to. Your friends may feel like you are taking advantage of your closeness because you need something from them. Selling to family, friends, or colleagues who are unwilling to participate may cause some strains in your personal relationships, so if you are going to do it, make sure to do it sparingly.

Losing Money

It is also worth noting that most MLM participants lose their initial investments. Depending on their marketing and communication skills some of them may be unable to sell their company's products or services. A percentage of those who manage to make sales still prove to have a net loss. Before joining an MLM company, be sure that it is all right with you to lose every cent that you invest in it.

If you are not comfortable with the idea of recruiting, approaching people, and losing money, then MLM may not be for you. If you ever decide to participate in MLM, however, it is important for you to believe in your company's products in order to close sales. Otherwise, if you don't believe in your product's merits, you can't expect others to believe in its benefits.

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