There are different types of efficient sales techniques, one of those spread with a swift movement all over the world and is known as network marketing or multi-level marketing (MLM). The main sense and irresistible, progressing power of MLM is based on the motivation of salespeople concerned with their companyâ€™s successful increasing because their income is basically the defined percentage of the avails so that the rate of their earnings is not limited, it only depends on how much they sale. The good name of MLM deserved by fair means and high-powered work practices to someone possibly may seem similar to illegal pyramids or fraudulent Ponzi schemes, as the last ones mostly position themselves as MLM companies.
The position of salespeople may usually sound like sales-manager, representative, distributor, promoter, consultant, telemarketer or in any other way, but it all means that they promote and sale the production of the company they represent. It is possible to sale any kind of production through the MLM principle. The two for the base response the most often used models of such MLM gain are: a) selling the production by ordinary scheme of active trading, which implies active searching for the customers and retailing the goods to them; b) recruiting new salespeople in order to expand the network of promoting channels and getting a small percentage from every sale performed by newcomers. The customers who bought and loved the production may also join the network and become equally those interested distributors, concerned with the same scheme of income and basically join the staff.
Most of appropriate MLM companies used to pay commission only for an actual sale, not for recruiting itself. In case in company's business plan is given that a person who paid the company for joining it may earn only by the mean of getting more people recruited in this â€œpay-to-joinâ€ scheme, than it would be called a pyramid scheme, which is forbidden in most countries, including the US.
There are different types of compensations provided in different MLM companies, but there also remains basic ones. For example, independently from how the principle of cashflow in a concrete company is functioning, there is a common idea of interest compounding for every level of a position. The commission rate depends on not only what goals did distributor achieve in his own sales, but also on how much successful sales-managers did he involved and how much sales do they perform. The more newcomers are retailing production, the more percentages per every their sale gets the distributor who employed these newcomers. Such compensation plans may vary in different companies, because there are thousands of them.
MLM companies became widespread for the second half of 20 century. Still, many people suppose this kind of business to be not very profitable. The specific trait of this business is that wealth doesn't come from the start in MLM but in case a big job is put in building of such network, it would certainly give its heavy crop. But as we already know that much fraudulent combinations impersonate as MLM, there still remains the same lesson of circumspection and caution: â€œif it sounds too good to be true, it probably is.â€