|
Multi-level Marketing Alert is committed to cutting
through the fog surrounding multi-level marketing (a.k.a.
Direct Marketing or Network Marketing) opportunities
and keeping multi-level marketing companies and employees
honest.
Multi-Level Marketing is a legitimate and legal method
for selling products and services. Individuals who become
representatives/associates can make money from selling
the products/services themselves or from recruiting
other representatives and taking a percentage of the
sales they generate. As each representative is able
to recruit new representatives, the level of representatives
grows in a pyramid fashion.
While the basic concept of multi-level marketing is
legitimate and legal, it is also very controversial,
having received more than its fair share of criticism.
Clearly, multi-level marketing works for the companies,
otherwise they would not continue to utilize it as business
strategy. The controversy lies in the question, “does
it work for the sales representatives?”
Pyramid Schemes are illegal and are often referred too
as Pyramid Scams. While Pyramid Schemes are not the
same as Multi-Level Marketing, the line that separates
the two is very slim and can be very gray. Pyramid Schemes
are also based on recruiting new people, but rest solely
on the exponential growth of new members and are therefore
unsustainable. Because the money only flows upward,
those who are recruited as the pyramid crumbles are
left holding the short-end of the stick.
“The key distinction between these schemes and
legitimate MLM businesses is that in the latter cases
a meaningful income can be earned solely from the sales
of the associated product or service to customers who
are not themselves enrolled in the scheme” (http://en.wikipedia.org/wiki/Pyramid_scheme).
A representative’s downline includes all the people
that representative recruited, as well as all the subsequent
levels of recruits below them. In multi-level marketing,
a commission from the sales made by the downline is
paid to the upline
Also referred to as distributor, associate, independent
owner, etc. But regardless of the term used by the company,
a representative is nothing more than an contract salesman.
Several multi-level marketing companies refer to their
membership plan as an “Opportunity”, and
as such has become common terminology in the industry.
Market saturation can happen when there are too many
sales representatives in market where there’s
not enough customers to support them all.
Dream Stealers is a common term placed on people who
provide an opinion or real facts that do not support
the claims of easy and abundant success provided by
the multi-level marketing opportunity. To ensure their
down-line is fully invested in selling and recruiting
for them, they try to limit the influence of people
who don’t support the dream by presenting them
as the enemy (e.g. Dream Stealers).
|
