How to Understand Multi Level Marketing in Simple Terms

Step-by-Step Guide

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   Step 1: Multi-level marketing (MLM)

   It is a marketing strategy that compensates promoters of direct selling companies not only for product sales they personally generate, but also for the sales of others they introduced to the company.
   
   The products and company are usually marketed directly to consumers and potential business partners by means of relationship referrals and word of mouth marketing..
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   Step 2: is a form of Network Marketing (however the terms are often used interchangeably).

   ), represent the parent company and are awarded a commission based upon the volume of product sold through each of their independent businesses (organizations). , Additionally, distributors can also earn a profit by retailing products they purchased from the parent company at wholesale price. , This arrangement is similar to franchise arrangements where royalties are paid from the sales of individual franchise operations to the franchisor as well as to an area or region manager.
   
   Commissions are paid to multi-level marketing distributors according to the company’s compensation plan.
   
   There can be multiple levels of people receiving royalties from one person's sales.
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   Step 3: Independent

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   Step 4: unsalaried salespeople of multi-level marketing

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   Step 5: referred to as distributors (or associates

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   Step 6: independent business owners

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   Step 7: dealers

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   Step 8: franchise owners

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   Step 9: sales consultants

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    Step 10: consultants

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    Step 11: independent agents

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    Step 12: Independent distributors develop their organizations by either building an active customer base

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    Step 13: who buy direct from the parent company

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    Step 14: or by recruiting a downline of independent distributors who also build a customer base

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    Step 15: thereby expanding the overall organization.

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    Step 16: Distributors earn a commission based on the sales efforts of their organization

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    Step 17: which includes their independent sale efforts as well as the leveraged sales efforts of their downline.

Detailed Guide

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