Introduction to Multi-level Marketing
Subject: Marketing Paper 2
Multi-level marketing could even be a business model where salespersons like sales
consultants, distributors, and even franchise owners and independent owners add harmony to
extend the sales of the merchandise, on commission basis. This is often more quite a
franchise arrangement where the sales of the merchandise depend upon the combined effort
of every franchise and regional manager. There are multiple levels of individuals receiving
commission. Usually there are seven or more levels. Multilevel marketing is really a mixture
of franchise and marketing.
This concept started in 1980s when most of the businesses started handling the stocking and
distribution issues and commenced compensating all the individuals involved. This increased
the interest of every member in promoting sales due to the prospect of earning bonuses and
since then the Multilevel Marketing companies have taken the responsibility of taking orders,
shipping goods, and paying revenue. Things became easier with the transition to Internet.
Product promotion, advertising and sales were made online and hence, the entire process
began to be mentioned as online MLM.
There are various MLM compensations plans. Consistent with the uni-level or stairway
breakaway plans there are two sorts of distributors involved managers and non-managers.
Consistent with the matrix plans, the width of every level during a distributor’s group is
regulated. In binary plans, the limit of every level’s width has two legs. Commission was paid
when both the legs reached a selected target. In elevator scheme, the distributors pay splits
after a selected number of units are paid.
