What is 'Multi-Level Marketing' (MLM)?


Multi-level marketing is a strategy that some direct sales companies use to encourage their existing distributors to recruit new distributors by paying the existing distributors a percentage of their recruits' sales. The recruits are known as a distributor's "downline." All distributors also make money through direct sales of products to customers. Amway is an example of a well-known direct-sales company that uses multi-level marketing.


History of 'Multi-Level Marketing'


The origin of multi-level marketing is often disputed; but multi-level marketing style businesses existed in the 1920s, 1930s California Vitamin Company, (later named Nutrilite) or California Perfume Company (renamed as "Avon Products").Network marketing and multi-level marketing have been described by author Dominique Xardel as being synonymous, and as methods of direct selling.Other terms that are sometimes used to describe multi-level marketing include "word-of-mouth marketing", "interactive distribution", and "relationship marketing". Some sources classify multi-level marketing as a form of direct selling rather than being direct selling. The Direct Selling Association (DSA), a lobbying group for the multi-level marketing industry, reported that in 1990 twenty-five percent of members used MLM, growing to 77.3 percent in 1999.By 2009, 94.2% of DSA members were using MLM, accounting for 99.6% of sellers, and 97.1% of sales. Companies such as Avon, Electrolux, Tupperware and Kirby all originally used single level marketing to sell their goods and later introduced multi-level compensation plans.


Types of 'Multi-Level Marketing'


According to the modern Multi-Level Marketing (or) MLM Strategies, there are number of MLM Compensation Plans you can choose from. Each Plan has its own advantages and limitations. Before getting into actual network marketing environment, it is vital to aquitaine the current and varying trends in Multi-Level Marketing. For Multi-Level Marketing companies, choosing a MLM Software will be quite easy as they know about the current Network Marketing plans. But in the case of a beginner, it takes a lot of time to study and understand how each MLM Plan will work.


The MLM Binary Plan is a most popular plan among MLM companies, network marketers, part-timers and members who want to earn through MLM business. MLM (multi-level marketing) companies where new joiners introduced into Binary Tree structure i.e. one on left and another on right sub-tree. Generally, one side sub-tree is referred to as Power leg while other is Profit leg. Power leg grows with new member placement, even introduced by previously enrolled or ancestors. New members in the power leg placed under a leaf available node of the binary tree, when a member works to grow his Profit leg, some compensation distributed calculated by a formula using certain value matched with Power leg that may be 1:1



Board Plan is one of popular amongst different MLM plans which is also known as Revolving Matrix Plan. MLM Board Plan is called because a group of members works in a team (Board) and whenever a board consists a set number of members, the Board splits into two sub-trees. The top one member promoted into next higher board. In MLM terminology the company can set how much promotional board to be introduced and how many members can be in a Board.



This MLM Uni-Level Plan is one of the simplest concepts in MLM industry. Every individual or company can easily convey and explain this Unilevel Plan to new comers and MLM Business affiliates In Uni-Level MLM plan each affiliate can recruits new comers in the front line. Each affiliate can introduce new comers in any width and the commission distributed up to a fixed limited depth as per MLM compensation plan. The MLM Company can become the Uni-Level Plan more attractive by introducing some rewards, bonuses, incentives on a particular level achievement or a fixed number of frontline.



The MLM Generation Plan is purely products selling, motivational MLM business plan. This Generation Plan best suited for the company who manufacturer of consumable products and want to sale their products directly to the end users.In present competitive market company needs to give ads in different advertising media like TV, news papers to increase product selling. The Generation Plan Software offers you an opportunity in which there is no need to expense for advertisements.



In multi-level marketing business there is a well known International MLM plan, Matrix Plan which is also known as Forced Matrix MLM Plan or Ladder Plan. The MLM tree organized in a pyramid pattern in fixed width and depth. The member who joins into the matrix plan gets compensated when they recruits new members according to the level set by the MLM plan. The MLM Company can set the tree structure that may be 3 in width and 5 in depth i.e. each member can recruits 3 new members in their width front line and get benefited up to the 5 levels. In matrix MLM plan the width is limited so the upline need to motivate their downline to get benefited and the network grows drastically. The MLM Company can set their level bonus structure according to their MLM business compensation plan to motivate or attract customers for sale of products and increase network structure.



Here, everyone can be considered as a distributor. Sales leaders are not present here. We get paid on the distributors down X number of levels. Then the company pays an extra amount based on other criteria besides the classifications of the sales force. This depends upon the fact that how long a distributor in the downline has been with the company. There is a period of time where if we sign up people, we can make more as new recruits and less on them when later. These programs can also pay higher commissions to a new recruit for the specified period. In the case of Hybrid Uni Levels, sponsors can achieve the monthly qualifying volume with the help of total organizational volume or with the help of volume within a specific number of levels. Sponsors will not lose their breakaways here.



In present scenario of marketing strategy to highlight their products and services needs advertisements in various advertising media like television, new-papers, websites, web-portals etc. The key features of MLM Repurchase Plan are:

1.Franchise Repurchase Management.
2.Product catalogue management.
3.Inventory Management.
4.Various product sale and purchase reports.
5.franchise stock exchange management.
6.Receipt and billing printing.