|
Home / Business / Networking
She Loves Me - She Loves Me Not: The Bottom Line About What MLM Really Means
By:DanLevy
Remember the old commercial that pitched some women’s shampoo. It went something like; "if you tell two people, who tell two people, and so on, and so on..." The point it tried to make was if everybody who used the product told two other people about it, soon everybody would be using the product. That is exactly how MLM (Multi-Level Marketing), also called Network Marketing works.
It is referred to as Multi-Level, because your business consists of different levels. In theory, as you go to each lower level in your business there are more people. Each MLM has it's own structure, or matrix.
In the example, I am using a 3 x 5 matrix. In other words, in your business, you may have only 3 people on your first level. And, your business may be five levels deep. Think of it as, "if you get three people, who get three people, and so on..." In this example, only you are on your first level.
Level 1 - This level consist of you.
Level 2 - This level consists of the first 3 people in your business.
Level 3 - This is the first 3 people in the business of those on level 2.
Level 4 - This is the first 3 people in the business of those on level 3.
Level 5 - This is the first 3 people in the business of those on level 4.
When level 2 is filled, there are 4 people in your matrix. You and 3 others.
When level 3 is filled, there are 13 people in your matrix.
When level 4 is filled, there are 40 people in your matrix.
When level 5 is filled, there are 111 people in your matrix.
If you recruit 3 people then your 2nd level is full. These 3 people can recruit 3 people each for their 2nd level. That fills your 3rd level. This process repeats all the way down. If you recruit more than 3 people, then these recruits go downward in your matrix to fill the 1st empty position. This is known as spillover. So, some of the people in your matrix will have their matrix partly filled by you. And, your matrix may be partly filled by the person who recruited you.
OK, so what does this mean?
When you decide to join an MLM,or network marketing business, you are going to be selling, or marketing, some product, or service. For your efforts, the company that owns the product or service will be paying you a commission. Sell 10 products or services in a month, you get 10 commissions that month. If that product sells for $15 and you get a 20% commission, then you earn $30 on 10 sales.
But, with MLM, your efforts are duplicated. You will be earning commissions on the efforts of all the people in your matrix. Now, the commissions you earn on them will usually be less than the commissions you earn from your own efforts. And, each MLM will have it's own commission structure. You may earn a different commission on sales on each different level of your matrix.
The key is in this duplication. If each of the 110 other people in this example matrix also makes 10 sales, then you would not just earn commission on the 10 sales you made. You would earn commissions on 1110 sales that month. In other words, if you earned 5%-10% on sales made by the people you recruit, and if they made 10 sales each, you could earn about $1300 for the month, even though you only sold $150 of products yourself. That's the power of duplication.
Let me include a bit of a disclaimer here. This matrix structure almost never works the way it does in the examples. First, you will probably never get a full matrix. Second, you may never get many of the people in your matrix to actually make many sales. It is entirely up to you to generate the sales. You may need to motivate the others to sell.
In a MLM, or network marketing environment, there are three types of people. There's you, your upline, and your downline. And, you are all three.
Your upline consists of the person who introduced you to the business. This person is sometimes known as your sponsor. The upline also consists of the person who introduced your sponsor to the business, and the person who introduced them, etc. Think of the upline as your parents, grandparents, great-grandparents, etc. in the business. Most MLMs require your upline to provide some type of training to help you succeed in the business.
Your upline will usually earn commissions on the products you sell. So, in reality, the better training, and help they provide, the more commission they will make. Also, the better they train & help you, the more sales you will make. And, the better you will be able to train the people in your matrix.
As soon as you recruit someone, you become part of an upline.
Your downline consists of your matrix, which has already been explained. Everyone you bring into the business, and the people they bring in - are your downline. You earn commissions from these people. As your 'upline' should have trained you, it is up to you to train them. The better you train & help your 'downline', the more sales they can make. They are also better able to train their downline, some of which is also yours.
Does this really work?
Yes and No.
How's that for being evasive?
The fact is there are many bad MLMs. Most of these MLMs work only for a few people at the top of the original matrix for the company. Most of these rely mainly on recruiting new people, filling the matrix, and paying a "sponsoring bonus" for each person recruited. There is little emphasis on selling a product, if there is a real product at all.
The good news is there are also some good MLMs. The good ones provide lots of training. They also put the most emphasis on the products. The products are not leads, mailing lists, recipe swaps, or anything like that. The products are real products that anyone & everyone may use.
So the bottom line answer is, if you are in a good MLM, yes it can work. Tips on how to find a good MLM, or network marketing business, are covered my article, "My Dad Can Beat Up Your Dad: How To Pick Which Networking Business Is Right For You".
-------------
This article is copyright © 2002. Dan Levy.
All rights reserved, except as noted. You are granted
distribution rights, but this article may not be sold.
Digg
del.icio.us
Blink
Stumble
Spurl
Reddit
Netscape
Furl
Article keywords: mlm, multi level marketing, network marketing, networking
Article Source: http://www.articles2k.com
Dan Levy is webmaster of DanJan Associates website. www.DanJanAssociates.com/Be sure to grab all the free content you want:
www.articles.DanJanAssociates.com
|
|
| Top Networking Articles |
- 1). Networking Your Way to Online Business Success By : Hans Hasselfors
Forums, groups, boards, and loops; they’re all synonymous for online locations facilitating online networking. Some are entirely public, where everyone and anyone can click to the URL, read the messages and if they have no interest in contributing, they can just lurk. Some require active participation and others require registration before members can participate.
|
- 2). So you want to be a millionaire? By : Duffy Rogan
Who doesn't...
I come across so many people that say "I'm going to make a million dollars in network marketing". I have conversations with people telling me how they're going to become millionaires.
That's great I'll help you reach that goal every way I can.
But you know what?
Not everyone is going to make a million dollars in network marketing.
|
- 3). Job Hunting: Networking With Others is the Keys to Success By : Christine Bettridge
You can never underestimate the power of networking. Often success is directly proportional to the size of the social circle.
Whether you are looking for an entry level job or wanting to climb the career ladder you will need some kind of networking savvy in order to survive in the business world.
If you are looking for an entry level job your networking skills might be more important than the quality of your CV.
|
- 4). Beware - Borders and Boundaries By : Jeffery Glaze
Have you ever had someone get right up in your face when they are talking to you? So close in fact that a letter "S' results in an unwanted shower? Often when we are out networking, we find ourselves in a loud environment as people try to talk louder to be heard over people trying to talk louder to be heard. This results in a roar that makes regular conversation difficult.
|
- 5). 8 Tips to Help You Become a Networking Guru! By : SME Grow
Effective business networking is the bringing together of like minded individuals who, through relationship building, become walking, talking advertisements for one another.
Keep in mind that networking is about being bona fide, building trust, and seeing how your relationship can genuinely help others.
1. Always figure out before you even walk into a room, what your specific goals are in attending each networking meeting.
|
- 6). Finding Networking Opportunities Is Easy By : Leni Chauvin
Copyright 2006 Leni Chauvin
Business networking is all about forming strong relationships built on mutual respect and trust. Those relationships are the basis for the single most important tool that we all need if we want to survive in the competitive 21st century.
I'm talking about referrals.
And today's savvy business professionals know that--just as night follows day--networking leads to referral business.
|
- 7). How to Write a Letter of Reference By : Kathy Swann
Have you ever been asked to write a letter of reference for a co-worker, employee or former employee? Generally, a letter of reference is used to help obtain employment, apply for higher education, or as a character reference for those seeking a government position. This is an important request, as a well-written letter can be the reason the candidate receives the offer he or she is hoping for.
|
- 8). The Art of Giving Business Cards By : Natalie Aranda
Giving business cards is an art, not only because they are needed to be considered successful or because, in fact, they represent your corporate or professional identity, but also as an opportunity to impact your existing or prospective customers, and stay in touch with them, helping you to deal confidently.
The scope of business etiquette includes.
|
- 9). Professional Networking Tips For IT Consultants: Part II By : Joshua Feinberg
Professional networking works. Last time we discussed five tips to improve your professional networking effectiveness. In this article you'll learn five more tips to make you a professional networking guru.
Don't let one person monopolize your time.
Try to spend about 3 to 5 minutes with each person. This is generally more than enough time to figure out if the person is a good fit with your company and if you have enough information for future discussions with them.
|
- 10). MLM Training: How to Help Your MLM Downline Get Over the Fear of Calling Prospects By : Tim Sales
Call reluctance is a term used in sales and network marketing to mean that the salesperson or the network marketer hesitates or procrastinates making calls to prospects. So to help a person get past this we need to figure out what caused this "reluctance."
As I commonly do, I'll define the main word - which is reluctance. It means: unwillingness; offering resistance; opposing.
|
| New Networking Articles |
- 1). Social Networking for Business By : Sharon Housley
Copyright 2006 Sharon Housley
Associations and trade organizations are great places to meet individuals. Usually organizations have a common theme, and it is an understood implication that all members participate to improve themselves and their businesses.
Whether it is a chamber of commerce or a trade association, members have common problems, issues and concerns.
|
- 2). How To Build a Duplicating Downline By : Cedric Aubry
Regardless the controversy that the term Multi-Level Marketing (MLM) or Network Marketing brings to mind when mentioned in a conversation, the success of such an industry cannot be denied at the moment.
The long existence of multitudes of MLM organizations is a wonderful indicator that network marketing is here to stay and flourish. As such, additional people are trying to join the bandwagon, building their own MLM .
|
- 3). Plant a Seed and Watch Your Business Grow By : Cynthia Morse, CAP
Do you have all the business you could possibly want or need? If you're like me, you're still growing your business. Marketing is an ongoing item on my agenda, and I'm always looking for new ways to market my services. Where do you begin the process of attracting more business? How do you get the ball rolling in the direction you want your business to be heading? Well, it's really simple.
|
- 4). Top Networking Marketing Opportunities – Is There Such A Thing? By : Vita V.
Top networking marketing opportunities, also known as multi-level marketing opportunities, run rampant on today’s Internet. You’ve no doubt received some kind of solicitous e-mail or seen some kind of advertisement in the margins of a web site you’ve visited that talks about amazingly easy ways to earn thousands of dollars with a simple home based business.
|
- 5). Hottest Business & Social Networking Site for South Asians By : Robert Palmer
DesiMySpace.com is an excellent portal for South Asians who are on the lookout for new friends and to increase the network. It is easy to find people who have the same tastes and likes as that of you. Some of the search features in this site enables you to locate people who are like you, as quickly as possible. To make use of all the features you have to become a member and becoming a member is free!
While you create your account you have to add your profile to your account.
|
- 6). Finding Targeted MLM Leads By : Jimmy Sturo
The objective of multi-level marketing (MLM) is to sell the product or service and to encourage the client to become an independent distributor, who then sells the service or product as well. Leads are vital for any business to grow, and in order for the business owner to have the greatest success, the leads must be curious enough in the business opportunity to have expressed an interest.
|
- 7). Taking The Vampire Out Of Online MLM Business Networking By : Stacy Slayer
You just got started with a new online MLM business and you want to tell everyone online about it. So, you sign up for all kinds of message boards, email groups and other business networking websites.
Before you do anything, please realize that you are dealing with REAL PEOPLE. The Internet seems like this anonymous place where you might feel people won’t really notice you if you engage in any vampirish behavior, but realize that the Internet is no different than dealing with people offline.
|
- 8). Network Marketing the Simple Way By : Cedric Aubry
But it network marketing could be tricky. A lot of persons are aware that they could be scammed or could be webbed into something they could not get out of. But of course, this all depends on the legitimacy of your network marketing business. Provided that your business is 100% permitted, then here are various tips to do network marketing in a very simple way.
|
- 9). 7 Traffic Techniques for Network Marketers By : Amber Barth
Network marketing is a numbers game. The more people you introduce to your opportunity, the more money you’ll make. To start generating a steady stream of traffic to your site, try these 7 creative techniques:
1. Write and Distribute Articles, Reports and Ebooks. Internet users are all interested in one thing – information. Use this to promote your business by creating high quality content and allowing others to reprint it for you.
|
- 10). 8 Tips to Help You Become a Networking Guru! By : SME Grow
Effective business networking is the bringing together of like minded individuals who, through relationship building, become walking, talking advertisements for one another.
Keep in mind that networking is about being bona fide, building trust, and seeing how your relationship can genuinely help others.
1. Always figure out before you even walk into a room, what your specific goals are in attending each networking meeting.
|
|
|
