MLM, or Multi Level Marketing, is nothing new to mankind; possibly this form of marketing goes way back a few centuries. However, with the advent of the internet, MLM has taken the marketing world by storm. There have been many success stories in the MLM industry and there have been many hundred more stories of failure. These statistics will therefore explain how there is more bad news about MLM programs than there is positive talk. The fact, of the matter however is that, most of the marketing world believes that not everyone can profit from an MLM campaign. There has to be an end loser or many end losers; this notion of MLM is changing at a fast pace.

Understanding MLM

MLM is a technique of distributing profit and promoting a product or service. There are many levels of marketing and the compensation depends on which level of the pyramid you are on. Naturally, the people at the top earn the most. However, you can get to the top too; by starting your own pyramid. The objective of the whole program is to get as many people to market the product or service as possible. A product that is sold through MLM is usually a product that can be resold many times. There are however, some products that can be used by the MLM participant too. These products are typically consumer products, such as, body care products.

One thing about MLM selling is that the products will only be available through agents the company calls ‘Affiliates’. MLM products will not be available off the shelf. At least that is the norm, to protect the investment of the participants. When one affiliate buys into the program and goes out to market the product, he gets a commission on every sale. Then, if he refers another person who also buys into the program and decides to market it, he too gets a commission. Additionally, the person who introduced him to the program also gets a commission on every sale his affiliates make. This is not the end of the matter.

There are multilevel affiliates; when the second participant refers another participant, that affiliate is the third level. Then when the third level affiliate refers another affiliate, he is the fourth level affiliate of the first participant and the third level affiliate of the second participant. So, the levels begin to grow with each participant getting a small profit from every sale made by his down line of affiliates. This is the crux of MLM.

There can be no limit to MLM levels, however there are some MLM companies that seal the level at about 15. So if an affiliate gets another person on his down line at number 16 the first affiliate is not entitled to any earnings from sales made or affiliates joining. This is necessary to ensure the profitability and sustenance of the program.