MLM short for Multi Level Marketing, also known as Network Marketing, and sometimes also called Referral Marketing is a system of distribution of goods and services that utilizes the services of individuals rather that the traditional retailers and wholesalers.

In a traditional and currently the more common system of distribution, goods produced by manufacturers go to the wholesalers and then the wholesalers will distribute these goods to the retailers, who in turn sell these goods to the ultimate consumers.

In an MLM system of distribution, the role of the retailer is usually eliminated. The majority of the MLM companies will buy their goods from manufacturers and sell them to its distributors who act as the retailers. The distributors usually become their customers and buy the products for their own use instead of buying them from regular retailers. They also sell these products to other consumers just like traditional retailers sell their products to consumers. The difference here is that the consumer buys it from an individual rather than a regular retail store. Most people enjoy the personalized service they get by buying the products they need from a person rather than a store.

One unique thing about MLM is that distributors get paid on the volume of other distributors they bring in the business. Now how this is done can vary greatly from company to company. But the idea is to reward distributors for bringing other people into the business and training them to distribute more products.

The MLM system of distribution has proven to be extremely effective when done within the basic principles of good business. Yes, within the basic principles of good business, even though this is an unconventional system of distribution, the principles of good business still apply.

What are the basic principles of good business? They are:

• The products and services offered through MLM must not be OVERPRICED.
• The quality of the products and services should be just as good or better than what consumers can get from stores and other agents.
• There should be a real demand for the products or services offered.
• The distributor making the actual sale should get compensated adequately for the sale.

Now that we have explained what MLM is, let's talk about what MLM is NOT supposed to be:

• MLM is not a money game.
• MLM is not a way to get rich quick
• MLM is nothing like a lottery (It is not based on chance)
• MLM is NOT for lazy people
• MLM is not a scam

MLM is real and it is here to stay. More and more goods are being distributed every year through the use of this system of distribution.

Here are some things that MLM does for us:

• MLM can make you wealthy and/or financially independent
• MLM can help the economy prosper (MLM creates independent small businesses)
• MLM helps people create lifelong friendships
• MLM gives the average guy or gal the opportunity to succeed

Many people have acquired a bad impression of MLM because of unethical actions of some companies and individuals. But just like any industry, there are always some bad apples that display lack of character and taste.

One objection that is often brought up by many people to MLM is that only a few people at the top make money and most people at the bottom are making very little or nothing. In other words, it's a pyramid. If you look carefully at a successful MLM Company's top distributors, you will find that the distributors working the hardest and the most committed are making the most money. They are at the top because they work hard and they are loyal and committed to the company. Yes, hard work, commitment and loyalty... These are necessary for success even in Network Marketing just as it is in any other business.

Also, when you look at the corporate world, aren't the CEO and executives making the most money? Then comes middle management, they make more than the people at the bottom but less than the executives, and so on. Of course, the people at the bottom do all the work but get paid the least. Why is it that we don't question that kind of business structure? Are the executives scam artists? Of course not! They are operating within a PYRAMID business structure. Yes, that's where the real pyramid is and not in MLM. We don't object to it because we have always seen it.

MLM lets you write your own ticket. With MLM, you decide if you want to be at the top or at the bottom. You don't need to be an office politician to succeed; you don't need to know all the right people. Heck, you don't even need a business suit. All you need to succeed is a strong desire, willingness to work hard, determination, a positive attitude and a willingness to work with other people.

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