Multi-Level Marketing is one of the more well-known online business models. They’ve made some people rich, but they’ve also left more than a few people frustrated and disillusioned. Therefore, it’s important to look into the pros and cons of multi-level marketing before getting involved. Especially the cons!
First, what is the definition of a multi-level marketing company?
A multi-level marketing company is one that relies on average people to advertise and sell the company’s product. Although companies shell out money that has made many rich, it’s much cheaper for them to do so rather than to pay expensive retail staff and professional advertisement agencies. Each company’s product is different, but the overall ranking structure is similar no matter which company you choose. The phrase “multi-level” refers to the ranking systems and the benefits and responsibilities that come with each rank.
The rank structure is similar for most all multi-level marketing companies. Each person in the company has Uplines, Downlines, and Crosslines. Uplines are those people above you. Your Direct Upline is the person who brought you into the company. Your Downlines are those you’ve recruited into the business. These include not only Direct Downlines, but those people whom they’ve recruited. Crosslines are people on your team or in other teams who are on your ranking level. Each team is defined as a branch from the source of the system, or the first persons who became part of the company. In essence, the structure is very similar to a family tree.
The function of the system is to ensure that everyone is properly trained and has a coach to help them along. The more help a downline gets, the better his/her business will be. The wealth of individual’s business will help the team and thus benefit the Uplines. Some companies reward everyone’s efforts with money. Uplines will get training bonuses if their Downlines make certain benchmarks in their business, and the benefit of each Downline’s personal coaching will help them meet those benchmarks. In this way, everyone benefits, and the company avoids the messy business associated with pyramid schemes.
Each individual can use this structure to make money. Each person you bring into the team increases your chances of earning income as the coaching you give them helps them along. Any sales they make will also help you to degree by giving you a check of some amount each time the Downline successfully sells the products or recruits a new team member. This money does not come out of the Downline’s check, which is significantly larger than the Upline’s. As each person progresses up the ranking system, they get a larger check for each sale or recruitment than they did at lower levels. To ensure the continuation of this process, companies hold competitions between teams so that Downlines make that business which benefits Uplines, and Uplines continue to train their charges. Movement up the ranks often occurs as a reward for this process.
I will post some more on this tomorrow!
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