Everyone wants to make a lot of money these days. Since the 2007-2009 Great Recession, people have been adapting to various options to make money not only to make ends meet but also to enhance their purchasing power to shop for desired goods. The philosophy of sticking to one career has become an ancient concept since adults all over the world have been exerting efforts to growing their budget by working 2 or more jobs a day. Others seek to put up different businesses while working on their careers for extra income. The recent recession has also impacted the way corporations and businesses endorse their products and services. Marketing has become a rising sector for any company because of its major contribution towards increasing revenues and more job opportunities. In order for a marketing strategy to be successful, hard work and ingenuity are the major factors. However, everything has changed since the introduction of the Internet-based and mobile advertising. The rising number of mobile phone and Internet users has reached billions, which means plenty of customers for marketers to target to sell their goods and services for revenue. The further advancements of technology have lessened the efforts required to accomplish work, which has led to the concept of effortless sponsoring. This marketing trend adopts the concept of MLM, which stands for multi-level marketing.

MLM is a promotional plan wherein the sales team is paid not only for the revenues they produce, but also for the earnings of the people they hire. This plan applies the hierarchy system consisting of multiple levels of salary allocation. Multi-level marketing is also known as direct selling and network marketing, after all the latter uses series of networks of salespeople grouped based on their rank.

The process of multi-level marketing is based on a fusion of networking and ranks. The highest-leveled marketers consist of independent unpaid salespeople, who appear as a company’s sales representatives that manufactures the goods or offering services that are sold. These salespeople are paid according to the volume of the goods sold by their own marketing efforts along with their lower-ranked marketing groups. These groups are created through either forming an active consumer network consisting of people that purchase products straightforward from the company, or hiring lower-ranked marketers who also form a customer network, resulting to a corporate expansion. The salespeople can also make money by selling goods they bought from the corporation at extensive prices.

However, MLM has been controversial due to its similarities to financial crimes and its deceiving tactics. In the United States, network marketing businesses have run all over the country and have utilized various terms, like “home-based business franchising” and “associated marketing”. The main problem is that financial con artists have used network marketing to cover their pyramid schemes, deceiving customers and stealing their money, whether online or offline, by surprise. There were also court cases that had resulted to lawsuits in companies who manipulated the prices to deceive customers into buying the products and to exaggerate the revenues declared. The U.S. Federal Trade Commission has created guidelines proving that MLM is not definitely illegal although they warn customers to be aware of people who cheat on sales by using the direct selling approach.

That’s how MLM came to existence. Whether you like it or not, this marketing strategy is here to stay. Even if this plan sells a cool product you want to use, vigilance is important in order to know if the MLM business is honest or phony.

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Category: Business
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