Multi-level marketing, or MLM, is a clever business plan that can be utilized by almost any business. It is used by quite a few large and successful companies today, and allows for the company to gain a number of associates who carry out the lower level of marketing. Some of the most prolific users of the multi-level marketing plan include the cosmetic companies Avon and Mary Kay, plastic storage container manufacturer Tupperware, and health care company Herbalife. You’ve probably heard enough about these companies to understand how the system works, but here you will find out more.

With multi-level marketing, many different associates work under the guidance of one main company. An associate is usually a single person, or a small group of people working together and planning ways to sell the product of the mother company. It is helpful to think of them like a franchise. They sell the product of the company, receive a share of the profit, and send commissions back to the mother company. This is almost exactly the way franchises work, but the various “franchises” contact prospective customers directly in order to discuss with them the benefits of the product.

Multi-level marketing works very well because it allows the mother company to focus on the product while the associates do all of the legwork of actually finding customers. Sometimes the selling rates are even higher with a multi-level marketing business, because of the fact that the associates are usually very enthusiastic about the product, and therefore willing to do what it takes to sell more. Of course, the commission is usually a very good incentive to make more sales as well. It will vary from company to company, but usually multi-level marketing plans have no trouble finding associates.

Unfortunately, multi-level marketing businesses have a certain unpleasant stigma about them when they are being presented to possible associates. This is probably because of the similarity to schemes like the pyramid scheme or the Ponzi scheme. In these schemes, the mother company offers to pay associates for recruiting other associates. However, with multi-level marketing the associate is only paid for sales of the actual product. Legitimate companies usually try to stress the difference between the two business models, in order to build confidence with those who might have their doubts about the fairness of the plan.

If you are interested in getting involved in a multi-level marketing business, you may have the opportunity to earn some good money if you have what it takes to sell products. Usually if you become involved with a product that you are personally interested in, you will have much more luck and perseverance when trying to sell it. But before you become an official associate (especially for a company that you have not heard of), you should certainly do your research and become as clear as possible on the rates that you will be receiving. Make sure that it will be worth your effort, and that you won’t be wasting your time.

Brian Hackett, CEO
MLMNetworker