Tài liệu What is the real MLM business?

What is the real MLM business?

1. What is multi-level marketing?
2. Is MLM a scam, legal, moral, ethical, etc?
3. Is recruiting wrong versus just selling product?
4. How do pyramids differ from legitimate MLM?
5. Are MLM and Network Marketing the same?
6. How can you succeed in MLM?
7. How can you identify a good MLM?
8. Can you really Earn $50,000 in 90 days?
9. Can you recruit or advertise products on the Net?
10. What about compensation plans? (matrix, etc.)
11. What MLMs operate in what countries?
What is multi-level marketing?

Multi-level marketing, also known as MLM or Network Marketing, is an alternative channel for a manufacturer to deliver its products to market. (Other channels include retail storefronts, catalog shopping, and door-to-door sales.) Depending on the particular company, the MLM channel may provide both word-of-mouth advertising and distribution. Why would a company choose the MLM route to product distribution? There are several good reasons:

ã Low overhead. There are virtually no up-front advertising costs. Unlike a typical retail company, the MLM company doesn't have to spend massive amounts of money to pull customers in. Instead, it pays distributors to push the product out into the marketplace. In addition, the company only has to pay the distributors for *results* - that is, a percentage of products actually sold. Ordinarily an MLM company will use the money that *would* have gone into advertising to pay its distributors. (Consider a major manufacturer of consumer products. With sales of say $25 billion with an advertising budget of $10 billion, they would spend 40% of their sales on ads. MLM companies typically pay 40-80% of their sales volume to their distributors.)

ã Low distribution overhead. Typical retail companies generally use a series of national, regional, state, and local warehousers to distribute their product to the retail stores. Each of these intermediaries wants to make a living, and marks up the cost of the product. Using the traditional major manufacturer, typically, a tube of toothpaste that sells for $2-$3 in a store costs the manufacturer roughly 13 cents to manufacture. If it sold for $2, 40% (80 cents) would go to advertising, leaving $2.00 - $0.80 - $0.13 = $1.07 for distribution costs and the company's profit.

ã Rapid growth. A well-managed MLM company can grow at an amazing rate - as much as 20%, 50%, even 100% per MONTH. (In fact one of the biggest reasons for MLM company failure is inability to keep up with explosive growth.) It would be difficult or impossible to generate this kind of growth in an overcrowded retail market.

ã Specialized and motivated sales force. There are hundreds of thousands of products cramming the shelves of retail stores. It's almost impossible for a new product to make a dent in the market, unless the company spends megabucks on advertising. Also, many MLM products need more explanation than can be done in a 30-second TV spot. A person-to-person, word-of-mouth campaign can solve both of these problems.