marketing levels

Multilevel marketing

Multilevel marketing is a business model in which resellers, such as sales consultants, distributors, and even franchisees and independent owners, work together to increase product sales on a commission basis. It's like a franchise agreement, where the sale of products depends on the joint efforts of each franchise and the regional manager. There are many levels of people who receive commissions. There are usually seven or more levels. Multilevel marketing is a combination of franchising and direct marketing. This concept began in the 1980s, when most companies began to address storage and distribution issues and began to pay for all involved. This increases each member's interest in promoting sales due to the opportunity to receive bonuses, and since then Multilevel Marketing has taken responsibility for receiving orders, sending items and paying revenue. With the transition to the Internet, things have become simpler. Product promotion, advertising and sales are done online, so the whole process is becoming known as online MLM.

There are several MLM payment plans. According to uni-level or stair tear-off plans, there are two types of distributors who are involved in managers and non-managers. According to the matrix plans, the width of each level of the distributor group is regulated. In binary plans, the width limit for each level is two tracks. The commission is paid when both feet reach a specific goal. In the elevator scheme, distributors pay the distribution after paying certain units. Commissions are paid in two ways, the first is that the commission is paid only when the product is sold and the second is about paying the commission, even if the customer is currently logged in, it does not require the customer to want to buy something. Due to the second method, illegitimate MLM began to emerge as an illegal pyramid. Intermediate members previously applied to proxy customers to earn a commission and used it to entice a participant to buy more products than they could sell. But because most of these companies present themselves as legal, precautionary measures must be taken. It is better to address companies that adhere to the first commission approach, where the sale is mandatory and not just picking up the customer. You do not pay for customer registration here. MLM marketing is practiced in the United States and hundreds of other countries.

In 1979, Amway Corporation was accused of price fixation. They exaggerate sales claims, while their distributors sell products at the lowest price. Subsequently, the FTC warned all multi-level companies whose commissions are based on recruitment, not marketing. In 2006, all merchants, including MLM organizations, were required to provide customers with full information in accordance with the Business Opportunities Rule established by the Federal Trade Commission to protect them from fraud. To this end, many inspirational programs were launched that hid the truth. Such programs are known as cult programs.

Laws are being strengthened. As a precaution, pyramid scheme is banned in most countries. All newly hired contractors must bear the costs of initial training and materials. They even have to buy a large amount of stock. The 70% rule is maintained for testing the legitimacy of MLM marketing. Members are stopped in congestion to increase their commissions. Only when seventy percent of the stock is sold can new material be ordered.