MLM or network marketing (NM) is a method of distribution of goods and services. It is different from traditional method of distribution (manufacturer-distributor-wholesaler-retailer-customer). Unlike other distribution methods MLM/NM companies don't advertise their products on TV or other mass media but rather depend on their customers to share the experience and recommend the products to their friends and relatives through word of mouth. They in return get 10-12 % profit of the sale value. Word of mouth/ recommending someone is a very powerful marketing tool which is cheaper and could reach more people because the selling of product is based on trust. Would you not buy a product your close friend uses and finds beneficial and asks you to try ?
But more than product selling MLM/NM provides a lucrative option to earn great part/full-time money and most importantly passive income. Once you sign up somebody in the business by selling a product and he signs-up someone else and so on, you create a network of people who are recommending a product or offering a business opportunity thus generating sales for the company and also earning 10-125 of the total sale happening through your network. In MLM u get percent of every sale that happens in your group of people directly (when u personally sell to someone) or indirectly (your team member sells to someone). So, if you have a network of 10 people and your team sold product worth $1000 then you would earn $100-150 as commissions. For direct sale u get more money.
So the bigger your network, the larger will be the sales thus big commissions every week or month. Best part is passive income/residual income. Once you have a big team you get commission from sale made by people u dont even know because they were referred by some 100th guy but u still make money for that sale although your effort was nothing in it. It may sound easy but creating and training your network takes a lot of time and efforts. THIS IS NOT A GET RICH QUICK SCHEME !! But if you work hard you can earn money in short period of time u would never earn in jobs. There are many fraud companies too so beware of them and do your own research before getting into MLM.
Of all the advantages of network marketing, leverage is probably the single most important. To understand why, consider this...
There are only so many hours in any single day. And in those limited hours you must work to generate some income, sleep, be with your family or loved ones, and do a host of other tasks that require your attention.
Most people work eight hours a day in a job -- a job they don't even like. In exchange for their time, employers pay a set fee per time spent at work. Some employers pay employees for units of a product produced.
First: by the number of hours you can spent on your work, and
Second: by the number of units you can personally produce in the given time.
Now consider network marketing.
Network marketing companies pay their distributors for work done by other distributors. So by systematically increasing the number of active distributors in your downline, you can simultaneously increase your income. And...
You can do this without increasing the number of hours you spent at work. You can actually reduce your working hours and still see your income going up.
Network marketing affords participants the opportunity to build an ever increasing passive residual income.
Building a passive residual income is the most obvious of the advantages of network marketing. Almost everyone joining has 'building a passive residual income' as one of their main objectives.
Note that the passive residual income is made possible by the leverage factor. By leveraging on other people's effort and time, a large residual income is possible.
You can start a network marketing business with little or no money.
Regardless of how much you are required to pay in as start-up capital, your earning potential is still high compared to other types of businesses.
Although I list 'low start up costs' as one of the advantages of network marketing, be aware that even if the company you join does not require you to pay anything to start, you still need money for your overheads.
You need money for things like stock purchases, advertising, telecommunication, etc. Without these you are not in business. In fact, you will spend a big chunk of your money on marketing.
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