Welcome to professrsavings.com, we teach finance basics.
Today we will teach you what is multi level marketing in about two minutes.
You may have heard of people being involved in selling containers or cosmetics such as makeup using the this business model.
Multi-level marketing or MLM is a business strategy that recruit individuals as sales people to sell products or services for them.
Why? Friends trust their friends!
The creative structure allows the sales person to not only make commission from selling products but also makes a fraction of the commission from other sales recruit he or she brings into the company.
So let’s say that Professor here sells jam containers on the side to make more money.
He first begins his recruiting process and tries to hire more of his friends that are teachers as direct sales people.
After all, teachers have summers off and often may find time after teaching lessons.
It simply makes sense. Friends trust their friends. Professor Savings introduces the line of microwave jam containers he sells in the faculty room.
He demonstrates the products and the other teachers are amazing at the durability.
Professor Bill is hooked and wants to sign up.
So now Professor Savings has two streams of income. One from selling the microwave jam container. The second is when Professor Bill sells microwave containers to other people Professor Savings gets a small portion of the sale.
Multi-level marketing is a legal business practice, but be warned since it is similar to illegal pyramid schemes in its recruitment strategies and business structure.
In general, MLM goods are similar in price to traditional retail outlets and have little or no startup costs.
Pyramid schemes may have expensive initiation fees and charge you for sales training and materials.
MLM can be a good source of income, however, be careful not to confuse it with a pyramid scheme so we advise you to do your research first before committing both time and money.