Decoding MLM

When you have a business, you need to market it for it to reach the customers successfully. Though one may say the product or service is designed in such a way it can be used by all, there is a specific target audience. The product or service was created with a particular group of people in mind. When one markets the business, this target audience has to be reached first. Only then should the rest of the world be targeted. This is because, when something is designed for a particular segment of the market, the highest success rate can be achieved in that segment only.

Multi Level Marketing
When the company, has a line of distributers and encourages them to recruit more distributers, who will technically be a level below them in the sales team hierarchy, it is multi level marketing. The distributor on top is given a percentage of the sale made by the people recruited by them. When they are given a percentage of the sales, they are encouraged to recruit more people. This chain goes on. As their sales and number of recruits go up, they climb higher in the rankings and earn more.

Apart from this percentage commission, they earn a profit on the sales they make directly to the customers as well. Hence it encourages a sales agent to not only sell more and make a good profit but also recruit people who are willing to put in the effort to sell the products. They will also push the recruits to reach certain targets as both stand to gain out of every sale.


Companies resort to multi level marketing where the products sold are personal care products. This is the most sold product category as people tend to buy such products from a trusted source.

When a person they know comes and tells them a particular soap or perfume is a limited edition and is in fact very good and safe, they tend to trust this message more than a mass advertisement.

Everyone knows advertisements are not fully true and a lot of tricks are used to make the models look the way they do on screen. In multi level marketing, the distributors get down and personal with the target audience and market the products one to one.

For the company, rather than spending millions on advertisements and not knowing how many promising customers it has converted, spending on distributors is more promising. Here they need not pay a fraction of what they pay for the advertising media. They just have to give a percentage of the sales, which is included in the price of the product. As a result, the company spends less and has more people into direct marketing. Direct marketing is any day a more effective strategy than mass advertisements, immaterial of who the famous personality used in the advertisement is.

So, how legitimate is this marketing strategy? Does it really reach the customers far and wide as intended?

The majority of the products are sold to the recruits. When a person is recruited, they are required to buy a certain number of products and invest a certain amount for their membership and training. Once they pay this amount and make a specified number of sales, their membership is given. Hence the more the people you recruit, the more the products you sell more commission you get and higher will be your ranking in the pyramid.

The company uses these membership fees from the recruits and pays the distributors on top. Hence majority of the income for such companies are from the money paid by the agents themselves to become a part of the team.


On Your Own

Want to start a MLM company on your own? You can do so online. You need to use if you want to truly benefit out of this. These scripts allow you to keep track of the number of referrals, the earnings by these referrals, create newer packages, the charges to join these packages, etc.

One can decide on the features your page should have and cover. This makes it a good online business for those who are looking for new ventures. Since this can be done from home and does not take too much of your time, it can be a side business while one continues with their existing profession.