What is MLM? or Multi-Level Marketing

What is MLM or Referral Marketing?

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MLM or multi-level marketing is also known as Network Marketing or Referral Marketing is a commission based system in which you can earn in 2 ways.  Firstly, you can earn from the sales you generate yourself and secondly from the sales that are generated from the people you recruit into the system.

Multi-level marketing is popular on the internet and many people use and promote this kind of work.  Many people may also refer to this as a pyramid system.  Pyramid systems are illegal, however Multi-level marketing systems can be very similar in many ways.  There is a very fine line and companies need to be very careful not to cross this line and jeopardize the business.

So by joining a Multi-level marketing network you are firstly and foremost becoming a salesperson.  You will be in charge of generating your own sales, placing these orders and distributing them to your own clients.  You will be, in effect, your own boss and responsible for generating your own income.

So what you are in effect doing is buying into a business distribution model.

Two of the biggest names at the moment that many people will recognize or have heard of that use this business model are Herbalife and Juice Plus.  Both of these companies do very well in this sector and have many thousands of distributors working for them.

How Does Multi-level marketing Work?

With many Multi-level marketing systems when you join you first must buy a kit or start-up package from the person who referred you.  This will be your own personal kit that you can use to promote and drive sales.  Kits can be actual products that you will demonstrate, catalogues that you can distribute to friends or family or around the neighbourhood and derive sales from (this is mainly done online nowadays), or information that you can sell.

Once you have your kit you will now be keen to start your business and get those sales in so you can make your first sales.  The person that referred you to this business will often be your mentor, team leader or use other such terms.  They will at first help and coach you to make sales and place orders.

This is the first and often most important aspect of your business.  The second is to recruit others that will possibly buy a kit through you and start doing what you are doing and you will become their mentor or team leader.  It is important that if you do chose this work that you concentrate on your own sales and really get to understand how this business model works before finding your own referrals.  You need to be confident and enthusiastic if you are going to bring in referrals and keep them.

What is a Compensation Plan?

A compensation plan is a way a chosen company chooses to structure payments and commissions for those employed by them.

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So you will have your commissions from the sales you make directly to your own clients.  You will also receive commissions from sales that people you recruit or refer into the company make, these are referred to as your downlines. Often this process of commissions will continue as your downlines refer people onto their downline.

The tiered commission system is what you will hear being referred to as the compensation plan. For every company, this is different so you should always take great care to look into these in depth for any individual company that you look at joining.  ensure that compensation %’s will provide you with a decent income for what you are doing.  In other words please do your math and ensure it is worth your time and effort.

MLM Work Lifestyle.

As a multi-level marketer, you will be your own boss and have your own distribution company.  You will be working from home in your own time, at your own pace.  This can be great as it allows you to set your own objectives and goals. You can set the hours that you work and which days you work or even which days you have free.  You WILL need to be self-motivated and focused to make this work and for it to become a steady income for you.

You can, however, grow your business to a size which suits you at your own pace.  Only you can make it work.  As with any job you will need to work at it, especially in the beginning.

Can I Make a Full-Time Income From This?

Some people debate greatly about this.  The short answer is yes.  If you are good at sales and can manage your business well, be focused and driven there can be some good money to be made within a good company with a good compensation structure.$100 bill

At first, while you start to grow or scale your business your income may not be that great and you may also have bad weeks or months where commissions are lower.  These are all things that you need to consider. As with any new business it takes time to grow your income so where possible this could be started alongside your existing job.

Some people debate this as the whole pyramid scheme like business comes under great scrutiny. Pyramid schemes and shoddy Multi-level marketing schemes tend to advertise great earning potential but often this tends to be for the people high up in the business.

If you do wish to pursue this as a business I suggest that you really do your research and make sure that the earning, commission or compensation plan is worth your while.  Ensure the company you are joining is reputable and pays on time.

Most of what you will earn will be from sales that you make to your clients. Another small percentage will be from those people that you recruit into the business.  Always be aware that you can and probably will be pushed to recruit more and more people.  It needs to be up to you if this will be worth the extra effort to make the desired amount of income.


No matter which online business you decide is right for you my greatest advice is to do your research thoroughly before jumping on board and parting with any money.


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