What Is MLM

What Is Network Marketing? What Is MLM? What Is Multi Level Marketing?

So, what is network marketing? What is mlm?

How would you define network marketing?

Network marketing by definition is the business model where manufacturers and service businesses promote their products and services through the use of direct sales people instead of the conventional distribution network.

These sales people (or distributors) for mlm companies use their network of friends, family, acquaintances (plus their connections) to promote the products and services of network marketing companies in return for a share of the profit.

So, what is mlm?

MLM is the acronym for Multi Level Marketing.

So, what is multi level marketing?

Multi Level Marketing refers to the marketing strategy that pays distributors or affiliates in multiple levels. And it’s a term that is coined from the network marketing business model discussed above.

The above may seem a bit confusing if you’re new to the network marketing industry (no wonder the question, what is network marketing).

Even if you’re already a network marketer, it pays you to sit back and understand the profit approach to network marketing taught by this network marketing dictionary if you intend to succeed big time with your mlm business.

Conventional Marketing Strategy Versus Multi Level Marketing

The question was, what is network marketing? And the answer to the question was given above.

However, let’s compare the conventional marketing strategy with the multi level marketing strategy to help you understand the depth and breadth of network marketing . . . and why the mlm business model is a win-win model for the distributor and the mlm companies.

In the conventional product marketing model . . .

• manufacturers sell to distributors 
• distributors sell to wholesalers 
• wholesalers sell to retailers and 
• retailers sell to consumers 

In the multi level marketing business model . . . 

• manufacturers sell to distributors and 
• distributors sell to consumers 

From the above, it is obvious that the network marketing business model eliminates the need for wholesalers and retailers.

In simple words . . . multi level marketing (MLM) operates a flat marketing structure.

This means in practice that . . . 

1. Distributors deal directly with consumers

2. Distributors have potential to earn more since the structure is flat (wholesalers and retailers’ margins are passed on to distributors)

3. Distributors don’t keep large stock (or inventory) of products they promote

4. Distributors get paid in multiple levels . . . when they sell the products and when they convert new members of the public into distributors (that is, building a team of other distributors) and

5. Distributors are promoted from rank to rank as their level of achievement grow. The higher the rank of a distributor, the more he/she earns

In other words, the network marketing business is a performance based direct marketing business.

In fact, the rank advancement philosophy of network marketing companies is what earned the network marketing business model the nickname, multi level marketing (or mlm).

Bottom line.

Network marketing is a low cost way of starting a business of your own by becoming a distributor for a multinational company with established brands. 

If you do this right, you could earn a nice living through the multi level marketing payment system for a long long time.

Here are the questions again.

What is network marketing? What is mlm?

You now know the answers!