Networking
MLM means multi-level marketing. Some call it pyramiding; some call it networking. Pyramiding has a notorious connotation. For that reason, networking and MLM have inherited the bad reputation of pyramiding.
In general, networking is building your community. Social networking sites like Friendster, Twitter, Orkut, WAYN, MyHeritage, Multiply, Facebook, etc. have a purpose of building your circle of friends and family. In politics, networking is building your constituents. In business, networking is about building your business community or widening you market niche. So. there's nothing actually wrong about networking.
Multi-Level Marketing
As the name implies, multi-level marketing is a system of marketing that involves a method of building a market niche where each member (called an upline/downline) is designated at different levels. A downline is either a partner or a customer or both who can enjoy the benefits of the system depending on their designated level. A member is a downline of the member who recruited him. He becomes an upline once he has recruited at least one member.
MLM is actually a network of networks because each member builds his own network, and at the same time, he is a member of his upline's network. As an upline, a member can enjoy many benefits depending on how many downlines he has or how many networks he has under his group or team. The more members he has, the better. A larger network means greater sales.
Binary MLM
The most common and acceptable type of MLM is called the binary method where each member of an upline recruits 2 members only, called the left member and the right member. Visually, you can look at each network in the form of a pyramid in an increasing size (exponential) at the base. As each member recruits two members, the size of the network doubles (1 x 2 x 2 x 2 x 2, etc.). In binary MLM, the upline's position is promoted by the number of levels he has in his network. Common level designations are consumer, distributor, manager, director, etc. Some call it bronze, silver, gold, diamond. Depending on the upline's designation, he receives a commission for every product his downlines make. Commission rates vary depending on the designated level.
A simple illustration
Lets say U recruited J and K. J recruited A & B. K recruited C & D. A,B,C,D recruited 2 members each. That's 8 new members. There are now 13 members in your network. The last 8 members recruited two each. That will be a total of 16 new members. And, the 16 new members also recruited 2 members each. That's additional 32 members. All in all, there are 63 members in your network. Let's say each member can make a sale of $10 a day. That will be $630 a day for the entire network. In a month, the group's total sales is $18,900 ($630 x 30 days). Quite a lot!
The question now is how does each member receives a fair share of the networks income. That will now depend on system devised by the MLM company. So, pick a MLM company wisely. Make sure that each member in your network receives a fair share of the income.
MLM means multi-level marketing. Some call it pyramiding; some call it networking. Pyramiding has a notorious connotation. For that reason, networking and MLM have inherited the bad reputation of pyramiding.
In general, networking is building your community. Social networking sites like Friendster, Twitter, Orkut, WAYN, MyHeritage, Multiply, Facebook, etc. have a purpose of building your circle of friends and family. In politics, networking is building your constituents. In business, networking is about building your business community or widening you market niche. So. there's nothing actually wrong about networking.
Multi-Level Marketing
As the name implies, multi-level marketing is a system of marketing that involves a method of building a market niche where each member (called an upline/downline) is designated at different levels. A downline is either a partner or a customer or both who can enjoy the benefits of the system depending on their designated level. A member is a downline of the member who recruited him. He becomes an upline once he has recruited at least one member.
MLM is actually a network of networks because each member builds his own network, and at the same time, he is a member of his upline's network. As an upline, a member can enjoy many benefits depending on how many downlines he has or how many networks he has under his group or team. The more members he has, the better. A larger network means greater sales.
Binary MLM
The most common and acceptable type of MLM is called the binary method where each member of an upline recruits 2 members only, called the left member and the right member. Visually, you can look at each network in the form of a pyramid in an increasing size (exponential) at the base. As each member recruits two members, the size of the network doubles (1 x 2 x 2 x 2 x 2, etc.). In binary MLM, the upline's position is promoted by the number of levels he has in his network. Common level designations are consumer, distributor, manager, director, etc. Some call it bronze, silver, gold, diamond. Depending on the upline's designation, he receives a commission for every product his downlines make. Commission rates vary depending on the designated level.
A simple illustration
Lets say U recruited J and K. J recruited A & B. K recruited C & D. A,B,C,D recruited 2 members each. That's 8 new members. There are now 13 members in your network. The last 8 members recruited two each. That will be a total of 16 new members. And, the 16 new members also recruited 2 members each. That's additional 32 members. All in all, there are 63 members in your network. Let's say each member can make a sale of $10 a day. That will be $630 a day for the entire network. In a month, the group's total sales is $18,900 ($630 x 30 days). Quite a lot!
The question now is how does each member receives a fair share of the networks income. That will now depend on system devised by the MLM company. So, pick a MLM company wisely. Make sure that each member in your network receives a fair share of the income.
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