MLM Meaning – MLM Plan And MLM Scheme – Let’s Get Some Answers!
MLM Meaning – MLM Plan And MLM Scheme – Let’s Get Some Answers. Let’s dive into what MLM is and how an MLM Plan works. Then let’s see if MLM is a scheme. And then – let’s see if you can really make money in MLM. Let’s see – if it’s all a bunch of hype – or – if it’s a dream come true for you and all of the other folks who dream of working from home.
Okay – so let’s start with MLM Meaning. MLM is the initials for the term – Multi Level Marketing. And Multi Level Marketing is a some what controversial form of marketing. Now I say controversial – when in fact it’s only controversial to people who are unfamiliar with sales and marketing in general. And that’s normal – because most of us humans hate sales deep down inside.
But I’ll get to that in a minute. So back to MLM Meaning – or the meaning of MLM – which is pretty much this in a nut shell. It’s a form of marketing where the distributors share products through word of mouth advertising. They also use the products themselves. During this sharing of products with others – they meet other people who also want to do the same thing.
The distributors get paid commissions on products that are sold by them personally – which are direct sales. In addition – because they were responsible for introducing other people who also became distributors – they’re also rewarded with some form of commissions – based on the other distributors sales volume. So – those commissions that are received because of sales volume from other distributors – are basically bonuses.
MLM Meaning And The MLM Plan – Or Compensation Plan
Now here’s a very critical point. Our commissions or bonuses that are paid because of other distributors – are all based on product sales! That is critical for you to understand. When products are sold – we get paid commissions on those product sales – or what is normally called Sales volume.
It’s also to understand something else. I said that distributors “share” products. We actually do not “sell” products if you are doing the business correctly. We share them with people we meet – or with people we know. And that’s why it’s a form of “word of mouth advertising.”
But no matter how you slice it – or how you describe it – we’re ALWAYS paid on products that are purchased!
Now the MLM Plan or Compensation Plan is what describes and regulates how much we get paid. It’s also usually very difficult for new people to understand. And that’s sad because the MLM Plan can make you or break you. But I’ll share more about that towards the end of this post.
But anyway – for the purpose of using this as an example – let me give you a very generic example of how we might get paid in a typical MLM Plan.
Let’s say that you shared your products with your friend and they wanted to buy $100.00 worth of products. Well as an example – maybe the MLM Plan says that you get 30% on Direct Sales. So in this example – you might get paid $30.00. And that’s cool right?
Well – now let’s say that your friend wanted to become a Distributor as well. And let’s say that they shared the products with their friend – some one who you never met and never knew before. And let’s say that this person bought $100.00 worth of products. So – that would mean that your friend who became a distributor – who made the sale – well they got the 30% direct sales commission. So they made $30.00 in this example.
Now – how does that make you feel? Would you continue to tell your friends how they could make money with this company – even if you never made any money from it? Uhhhh……I think not!
But – what if the company said in their MLM Plan – hey – seeing that you brought this new distributor to us – and seeing that we may never have met them on our own……well what if we gave you a 5% bonus on their sales volume? Now that seems to be fair. And it also can be very motivating for you – when you consider that you may be able to tell a lot of people – how they can make money just like you.
So now consider that you had 100 people – and each of them shared and sold $100.00 worth of products. So that would be 100 x $100.00 = $10,000.00. Wow huh? And let’s say as an example – that you got paid 5% on that $10,000.00. That would mean that you get paid $500.00 – because you shared the opportunity with people that the company may never have met on their own.
So with MLM – not only can we get paid on our own sales – but we can also get paid on the efforts of other people who also share and sell the company’s products. And that’s called LEVERAGE.
And that my friend is an awesome thing!
MLM Meaning And MLM Scheme – And Why People Are Afraid Of MLM
Now when I discussed MLM Meaning – I stated that it was somewhat controversial. And I also stated that it was usually controversial to folks who didn’t understand sales and marketing. And that’s cool. Most people never get into sales. But here’s the thing. Almost every sales and marketing department or organization pays bonuses or commissions on other peoples work.
For example. I used to be a Marketing Representative for an aerospace company. And I would “sell” maintenance and interior modifications to customers for our facility. Well later on – I put in for a Regional Sales position and I found out that those guy’s – were paid bonuses – on how much I would sell. And their boss – would get paid a bonus on what the Regional Sales guy’s would sell.
Now – when I was a Marketing Rep…..I had no idea how the others got paid. But guess what – that’s how the world works when it comes to sales. And it’s not surprising that the general public is not aware of this. Because they are not into sales.
But here is another example. I also worked for a popular insurance company who has a Duck as their spokesperson. So when I sold a policy – I got a direct commission. But – my regional manager – also got paid a bonus on my sales. AND – the District Manager got paid…..and the guy above him….and the guy above him. All from my sales!
In ADDITION – I could recruit other sales people and when they made sales on new policies – I would get paid on their sales as well – in the form of a bonus.
So you see – when we talk about MLM Meaning and MLM Plan – we are talking about sales and how it works in the real world. The only difference is that MLM is generally made up of work from home types of folks – who never worked in sales before. And – it seems strange to them.
It may even seem like a scam or a scheme to them. But in fact – it’s just a typical sales type of business – that uses word of mouth advertising – and average work from home types of people.
So why do people think that MLM is a scam or a scheme? Well like I said – generally they have no idea how sales and marketing works to begin with. In addition – when we sponsor or introduce others to our MLM company – the resulting organization takes on the shape of a triangle or a pyramid. So it looks like something that we heard may be illegal.
Well – pyramids are illegal! But remember – I stated that we get paid commissions on “products that were sold” – or sales volume. Just like that Aerospace company – or that insurance company. We don’t get paid on the people – like in a pyramid – we get paid on the product sales!!!! So that’s the first misconception that people generally make.
But here is the real reason. You see I also stated that most humans hate sales. And – most humans would fail miserably if they got into sales. In fact – probably more than 95% of people who tried to do sales – would fail at it.
So if you are thinking of getting into an MLM – and to do sales……most likely you’ll fail. And because so many people do exactly that – and fail at it – their only explanation as to why they failed – was because it had to be some sort of a scam – or a scheme.
When in reality – it was just because they were part of the majority of people – who stink at sales. So is there any hope for all of us who are interested in MLM?
Well yes there is. And here’s the secret. DON’T SELL ANYTHING! We SHARE – and we build the business – meaning that we show others how to do the same thing that we are doing. In the process of doing that – products are sold. Also – those folks who don’t want to build a business – usually become customers instead.
And that brings us to the other reason why people fail! Sponsoring and recruiting other people – is like sales!
MLM Meaning And Vertical Affiliate Marketing – What’s The Difference?
That’s right – when we try and sponsor people or recruit people into our MLM – we’re basically doing sales. We may not be talking about the products – but we are talking about the opportunity. And people who are new at MLM – they don’t usually have the understanding or the confidence – to go about that task correctly.
In fact – statistics show that the average person in MLM only sponsors 1 to 2 people into their MLM. And quite frankly – based on how many people quit too soon – it’s just not enough.
Now if you’re new at this – and most likely you are if you asked about MLM Meaning – or if your are looking around for the definition of MLM for that matter. So if that’s the case – well then I am sure that you have no idea what Vertical Affiliate Marketing is.
And that may just be a much better deal for you. Actually – it works really cool along WITH your MLM! After all – where will you put all of those people who say NO to your MLM?
Anyway – in Affiliate Marketing – we also get paid for Direct Sales in the form of commissions. BUT – it’s so much cooler than MLM when it comes to building an organization.
And that’s because we have the option to go straight DOWN!
That means – everyone above you – and everyone below you – is also helping you. Everyone helps each other build a team. And because it goes straight down…..everyone shares in the profits and the success.
So – we talked about MLM Meaning……MLM Plan…..and even MLM Scheme. Now let’s take a look at Vertical Affiliate Marketing – if you want help in building that income that I know that you’re looking for. Click here on The Best Affiliate Marketing Program to see what I’m talking about.