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Multiple level marketing or MLM or network marketing is a marketing arrangement where the sales force is compensated both for the sales they make directly to customers and for the sales made by other sales people whom they sponsor. Each individual sales person can build a sales organization referred to as a “down line”. A successful sales person will build a hierarchy of multiple levels that forms a pyramid shape. A portion of the sales revenue will paid to each level of the organization. There are a variety of compensation structures among multiple level marketing companies.

The network marketing does not sell its products or services in a retail store. Products are sold directly to customers and are not sold in traditional retail outlets. The are sold without traditional media advertising. Many different types of products are marketed through network marketing. All sorts of everyday products like laundry detergents and household cleaners, cell phone plans, gold coins and just about anything you can think of are sold. There are many different compensation models and organization models. The most common compensation structures are the uni-level, stair step breakaway, matrix, and binary plans.

Network marketing is a proven and valid business marketing model. There are many stories of individual creating successful sales organizations from a very small initial capital investment. Prominent business school have done detailed evaluations on multi-level sales organization which prove the legitimacy of network marketing.

The most primitive model is the uni-level arrangement. With uni-level there is no limit to the number of people you can sponsor to belong to your front line. For example, A sponsors B, C, and D. A’s front line consists of B, C and D. A can sponsor as many people as he wants to belong to his front line. If B sponsors E, F and G and C sponsors H, I and J then E, F, G, H and I are A’s down line. If person Z initially recruited A then Z is A’s up line. “A” will receive commissions from all the sales of his down line to a certain number of levels. Typically, five to seven levels deep.

The stair step breakaway structure is one that rewards volume sales production. Shares many characteristics with the uni-level plan in that you have a single front line. Once a member of your front line achieves a predetermined amount of sales they will leave your group and form their organization. In lieu of reduce sales that your group will suffer you will receive override commissions from the break away organization’s sales.

A forced matrix plan imposes a maximum number of front line associates and sets a limit to how many levels deep will pay commissions to you. Once you have attained the maximum number of associates, new recruits are located in the next available position in the down line. This organization modal stimulates team member cooperation and organization building. The smaller the front line maximum the more attention you will get from your front line.

A forced matrix plan that only allows two front-line members of a group is know as a forced matrix plan. Forced matrix plans are growing in popularity. Once you have sponsored two associates and new recruits “spillover” to a slot in your down line.

For any company that sells goods or services the main objective of a MLM Or Network Marketing is to sell its product or services and to grow its customer base. Network marketing provides a tremendous opportunity to average people to become entrepreneurs. This opportunity is open to anybody. All that is required is the ambition and the willingness to work hard.

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