May 15, 2012

MLM or Multi-Level Marketing Analysis

MLM or Multi-Level Marketing has been around for decades. MLM is when the founder of the organization or group will sell or offer a product or service to his/her direct referrals or customers and he/she gain commission for such sales. Then his/her direct referrals may recruit new members to join the organization inorder to get commission of the product or service and the founder will also get a commission from his/her referrals' referrals. In other words, the founder being on top of the group heirarchy will receive a commission from all his direct referrals as well as all indirect referrals, who are the referrals that his/her referrals refered. The product that multi-level marketing ventures sell or promote can be anything, from herbal tablets to ebooks.

What I think of MLM or Multi-Level Marketing? I think it is a complete genius only for the person that created it (founder), who is the person that is on top of the list of the heirarchy. It's a genius for the founder because for the most part, he/she doesn't need to work extremely hard to approach people to sell them the product, all his/her referrals and his/her referrals' referrals will be the one doing all the hardwork for him/her. Even if the founder only recruit five (5) people in the beginning, and then these five people recruit three (3) people each, then he/she being at the top of the heirarchy will receive commission to all twenty people (5 + 15 = 20). And if each of the recruited three (3) people will find their own recruits, and so on and so forth, can you imagine the commission that the founder of the MLM is making? And he/she don't even need to do anything anymore, all he/she has to do is go to the beach, buy his/her grande home, and let the people under his/her heirarchy do the hardwork of convincing people to join the MLM and sell the product or service.

That is why I am not a huge fan of MLM because for the most part the people that work hard in the group will not be the ones that will truly benefit the most in this kind of set-up. Most of the product that a MLM sell have similar products available for sale somewhere else without the high prices just to accomodate commission payments for the members that are on top of the heirarchy.

This article is written by Jazevox
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