Home Based Online Business Opportunity Now

Earn Residual Income From MLM Businesses

by BillStewart on May.18, 2009, under Business Opportunity Comments

If you recommend a product or service to a friend, and the friend goes ahead and buys the product or service, then you have done the job of the salesman. Generally, salesmen get paid a commission for making sales. So if your recommendation ends in a sale, it’s reasonable for you to get a commission.

If your friend then recommends to one of his friends, and that results in a sale, it’s reasonable for him to get a commission. But if you hadn’t made the first recommendation, that second sale would not have been made, so it’s reasonable for you to get a small commission on that sale too. Small, because it was your friend who did the actual selling the second time, not you.

That is the essence of Multi-Level Marketing – your initial contacts buy product, then recruit their own contacts who go on to do the same. Because each person recruits several contacts, the people higher up the chain gain a network which grows without their direct management, making sales which they could not have made themselves. The large network, generating small commissions per sale, eventually overtakes the direct sales that one person can make – you have a large number of people each generating a small amount of income for you, and the growth of the network is out of your control.

This model is obviously open to enhancement. If you set about training your direct contacts and their recruits, and train them to train their recruits, then you can influence how well the whole network succeeds. Better training gives better results, and so better leaders get a better result – that is, a better income.

There are large numbers of companies marketing their products and services this way. Some of them are household names, in cosmetics, cleaning products, health products and so on. Others, even though hugely successful, you probably would not have heard of, precisely because their marketing model is to use only the MLM approach.

What do they gain by using this marketing model? For a start, they gain a sales network that is not salaried – income is earned purely as a result of sales. Secondly, in many cases, they require the recruits to make regular purchases of the product, either for their own consumption or for resale, giving them a monthly sales base.

If you think this sounds like those illegal pyramid schemes of old, there is a significant difference – in a pyramid, each level had to buy the product from the level above, each one adding their own margin to the price. In MLM, each level has access to the product at the same rates from the company, perhaps varying according to the quantity purchased, but certainly each having the same opportunity.

Building an MLM network is a perfect example of developing an asset which will eventually deliver passive income, requiring only your guidance and not your constant management.


3 Comments for this entry

3 Trackbacks / Pingbacks for this entry

Leave a Reply

Looking for something?

Use the form below to search the site:

Still not finding what you're looking for? Drop a comment on a post or contact us so we can take care of it!

Visit our friends!

A few highly recommended friends...

Archives

All entries, chronologically...