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How Multi Level Marketing Works

A Look at How Multi Level Marketing Works:

Multilevel marketing or network marketing continues to spread in all countries like a wave. It is very likely that a friend or acquaintance or a colleague will approach you to talk with you about this fantastic opportunity to earn additional income without any investment. Each individual who hears the explanation provided about network marketing and income generation will be perplexed and wonders if everything is true. The main question that people will ask about the realistic chances of someone earning the kind of money shown in the explanatory literature. Let's try and understand the concept of how MLM works very briefly from a macro point of view.


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First, an existing distributor will approach you to try to recruit you. By registering, you will sign a contract with the main company for which you will sell your products. The distributor that presents it will now be called your sponsor. The sponsor or the Company will provide extensive training on product lines, as well as sales methods and other processes associated with the sale, as well as the recruitment and development of its network of distributors. You will have to invest a small amount (approximately $ 100) to buy a starter kit for use in the sale.

Retail sale

In MLM businesses, you will essentially have two main agendas that you will focus on. First it would be to buy the products for the consumption of you and your family. At this stage, you will notice that if you buy, for example, goods worth $ 100 per month, you will be entitled to a refund of 15% of the maximum retail price. Therefore, you can save $ 15.00. In addition to buying products for you, you can also buy for your family and friends and increase your sales volumes. As the volume of sales increases, their discounts continue to increase also according to the slabs and you can end up claiming up to 45% off case by case.

Recruitment and construction dealer network

The next activity you will focus on will be to recruit other distributors under you. When you start talking to known and unknown people and have them register as distributors, you will become their sponsor. As you begin to develop your network, you can earn revenue from sales generated by your online distributors in the form of incentives, discounts, bonuses and royalties, etc.

Let us say that you have developed five distributors that place orders worth $ 500 with you. You will buy your sponsor's products at a 30% discount and each of your distributors will buy you at 20%. Therefore, you can retain 10% at the expense of each distributor. As your network grows and the turnover of your distributors and their networks under them grows, you start earning with greater discounts on irons. However, there may come a time when your top-level distributors and their network grow to a volume where they begin to claim the maximum discount that they have been buying from their sponsor or directly from the company (when it grows in size, it separates from your sponsoring and dealing directly with the Company), it is time for that group to separate from you and your next level distributor starts buying directly from the Company. At this stage, you will start earning royalties or bonuses in a certain percentage as determined by the Company in the business volumes that each of your distributor groups have separated from you.

Although it seems very easy on paper, you should remember that to achieve higher sales volumes and develop dealer networks, you must invest a lot of time and dedicate yourself to this work. At this stage, you are very likely to choose your priorities and decide if you want to obtain full-time and dedicated MLM. Those who have advanced and invested their time in MLM full time have become millionaires.
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