The multilevel » What is it and how does it work?

Entrepreneurship is a dream that many people want to achieve, however, a large part of these people are limited by not having the time and the level of investment needed to achieve it. Despite this, the multilevel business model is a fairly good and maleable alternative that allows the entrepreneurship with very little investment, so taking this type of business into account perro be very profitable.

He multilevel It is a type of business that requires a lot of motivation to be successful, and this is the main basis of multilevel, the motivation of the people who work in it, either to start the day, to try to sell, to encourage the rest of the team or any other circumstance. Motivation is the main performance basis of multi-level marketing.

What is multilevel?

He multi level or network marketing It is a business model that is based on the creation of a network of independent distributors, who generate income from the direct sale of products. He network marketing They are characterized by basing their marketing system on two practices: The first is to sell their products directly to final consumers; and the second is to create a network of distributors.

For each product sold The company earns a commission from distributors, and commissions are also received on the sales of recruited distributors. The appeal of multi-level marketing is that it is designed to be able to generate linear income through direct sales and residual income from building a network of distributors who learn to do the same.

Primordial pillars of the multilevel

Network or multi-level marketing (mlm) bases its marketing system on two primordial pillars: direct sales and networking.

These multilevel pillars will be presented below:

Direct sale

The direct sale It is the process by which the affiliate of a multi-level company goes directly to consumers to offer and sell them some product or service provided by the multilevel company, either personally or using electronic means such as the Internet.

The ultimate purpose of direct selling is for people to be able to buy the products or services that are offered to you by the affiliates of a certain multi-level business. When the sale is made, the affiliate gets a commission and the multi-level company another commission.

networking

The creation of networks consists of bringing other people to participate as independent sellers in the multi-level business in which the person making the invitation is affiliated. if the other person accept the invitation entering the business, then it becomes part of your work network (downline).

Aaffiliated who has a network of sellers has the ability to receive commissions for the sales they make. Companies began to exist that offered incentives to their distributors for recruiting other people to the company, which started this business.

How does multilevel work?

He multilevel performance o Network marketing consists of selling products or services to final consumers; and then invite them to be part of the company as independent distributors (sellers). Those people who accept the invitation will become part of your marketing network.

From the moment people begin to be part of your marketing network, then begins a training phase for new distributors. The people in your network they will fulfill the same rolethat is, they will sell the products directly to the consumer, while they try to recruit new members to the work network.

The network marketing company pays you commissions on your own sales and on sales made by people in your marketing network. As your network grows, so will your earnings.

Characteristics of the multilevel

The main characteristics of multi-level businesses will be presented below:

Employment relationship: Multilevel companies do not establish an employment relationship with the independent distributorsince the latter is not an employee of the company and is not obliged to comply with work schedules, nor report to any boss.

Income Limits: Generally, there is no income limit. This means that the limit of the economic benefits is equipo by the Independent distributor.

Investments: A distributor or independent seller does not need to invest in infrastructure, nor does it assume the forms salary of employees who participate in administrative tasks; Therefore, you cánido start your business with a small investment.

The working system: The independent seller benefits from the system created; that is, of the entire administrative structure, logistics, etcétera… Which saves you time and effort.

How do you earn money with the multilevel?

In multi-level businesses, you perro reach receive income in two ways: Direct sales and sales made by distributors in your marketing network.

From direct sales: For each sale made by the distributor you will get a commission from the multi-level company.

Of the sales of the distributors that are part of the network or descending line, at its different levels: When the independent distributor directly recruits a person, he enters within his 1st level. Then, assuming that this new distributor recruit another distributor, the latter would entrar your 2nd level, and so on.

This represents an excellent opportunity to earn great income for your work and the work of people in your line of work.

Motivation in multilevel business

The multilevel is a business that needs a lot of motivationand it is that this is the main basis of the multilevel, the motivation of the people who they work on it, either to start the day, or to try to sell. Motivation is the main basis of multi-level marketing performance.

The leaders of the multilevel, the people who they manage teamsThey require a great capacity for motivation that allows them to achieve goals and face the difficulties that may be encountered along the way.

Sometimes there are results sometimes there aren’tsometimes success is just around the corner, that is why it is very important to always look for motivation, both your own and that of the prospects and work team. What is the motivation? The motivation in general, the motivation for a better life, the motivation to give something better to the children, etcétera.

Advantages and disadvantages of multilevel

Advantages

It is a proven business model. This eliminates the uncertainty about whether the business works or not.
Small investment. The investment to entrar a multi-level business is low. You perro usually operate from home, and start with a minimal affiliate investment.
Training. Multilevel companies have training programs for their network of distributors.

Disadvantages

Must have marketing knowledge and communication skills: It is necessary to master sales techniques well, and good communication is necessary for this activity.
It requires a lot of motivation: discipline, commitment, persistence are key competencies, etcétera.

Errors when entering multilevel companies

Starting a business thinking about getting easy money: advertising tends to go overboard when presenting your business; giving the impression that financial independence is easy to achieve.

No segment your market: There are people who make long lists that include everyone they know to present the product; this perro lead to wasting time and energy on people who do not have the necessary buyer profile.

Do not track: these businesses require the same sales effort as any other. After a presentation you have to follow up with clients.

Differences between multi-level and pyramid businesses

The main difference between the two systems is that the multilevel does enjoy a product line that creates new markets and competes in existing markets, while the pyramids do not have this.

Multilevel entrepreneurs have multiple sources of income, among which is the rRecruitment of new members to the system and the sale of products directly. This gives the business a legitimate and sustainable character, since it has a real economic foundation built on the basis of products and human capital.

The kind of pyramid or ponzi scheme It is unsustainable in the medium and long term, due to the fact that there is no valuable product that motivates the forces of offer and demand to interact, based on a rational cost-benefit analysis.

This type of pyramid business, in which the possibilities of profit are reduced to the extent that the network is oriented towards the bottom of the pyramid, until becoming null, has been prohibited in many countries, where it is considered a fraudulent activity.

Is multilevel profitable?

Multilevel businesses cánido become profitable without working in the correct way, that is, not making mistakes that perro lead the person to the failure. There are many entrepreneurs who have entered multi-level businesses and have trained what is necessary to take their business to great levels.

When an entrepreneur works correctly in these businesses, then he will be very successful and have a fairly large profitability. It is important not to make the mistakes mentioned above in order to have a profitable multi-level business in the medium and long term.

Conclusion

He multi level or network marketing It is a good way to start your own business, with a minimum investment, but with great possibilities of generating income in the short, medium and long term. A advantage of being part of a multi-level company, is that the person enters an already existing system and cánido start developing their business from the beginning.

An additional benefit is that the person will be able to develop much-needed skills to start any other business, for example, you will overcome the fear of being rejected and learn to be a leader. It is also good to know that multi-level businesses have been criticized for their business model, but many others defend it.

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