Multi Level Marketing (MLM): Understanding and seeing

Multi Level Marketing (MLM): Understanding and seeing
Multi Level Marketing (MLM): Understanding and seeing

What is it mlm business? MLM or Multi Level Marketing is one form of marketing which are now widely cultivated by many people. In the country, companies that implement business Multi Level Marketing is a lot, ranging from nutrition to cosmetics. Another term that is often used for business Multi Level Marketing is the marketing of a pyramid or network marketing.

Multi Level Marketing (MLM)

What it is Multi Level Marketing?

MLM or Multi-Level Marketing is one marketing system that leverages the customers as a distribution network. If taken from the origin he said, multi have the meaning of a lot, the level has a meaning level, and marketing is the marketing, so that Multi Level Marketing is a marketing system that is tiered and more. Multi Level Marketing is a system of marketing are used in a way to give bonus on consumers or customers to be directly involved as a seller and can profit on the line of the partnership such.

Members who joined in the MLM will be referred to as a commerce partner, distributor or member. Furthermore, the commerce partner will be invited other parties to join to become a member, so that the network customer or the market could be more wide and big. The success of the commercial partner in the invite and add members will be able to increase the turnover of the company, so it will give the maximum profit. Therefore, the company will provide advantages at partner merchant in the form of incentives in the form of bonuses.

What Is The Difference Between Multi Level Marketing With The Ordinary Business?

Clothier (1994), explains that there are a few things that distinguish business Multi Level Marketing with a conventional business, namely:

  • Fleet sales. In the MLM system, power marketers is the distributors themselves, so the distributor will be the boss and employ herself. While for the conventional business, the goods must pass through the party manufacturers-distributors-retailers-and consumers.
  • The distribution of profits. On the MLM system, the distributor will get a reward from a direct comparison of the efforts they are doing. Whereas in conventional business, those who profit is the owner, director, and distributor. The parties retailers will also benefit, but with a margin that small.
  • Sell the product. All sales MLM will be carried out directly. Whereas in conventional business, the new customers will get the products they want with shopping in certain stores.

Type-the type of Multi Level Marketing

Setiawan (2017) explains that there are several types of systems of Multi-Level Marketing, the following are the types of MLM is:

  • System Binary Plan

System binary plan is a system of Multi-Level Marketing is priority network on the two legs of the course. Bonus that will be obtained will be greater if the network can be more balanced. On the contrary, if there is no balance, then the bonus-the bonus will instead flowing into the company. Multi Level Marketing system with Binary plan is usually applied by various companies in Indonesia. Those who apply the MLM system is relatively fast growing, and its partners also will get a bigger bonus. To make it easier to get the bonus, usually the partners of the companies that apply the MLM system this will apply the rules in it will give you the money as a bonus result of the recruitment of partners who have them bring. Such a system is seen as trade people are fine. In general, this kind of just give you a huge bonus on the initial stage of the career course as a form of decoy and proof that running a MLM business type binary is very easy. But in fact, this system is even more favorable to those who have joined in the early stages.

  • System Matrix

MLM system matrix will develop the network by using the concept of three frontline course, similarly to kebawahnya. Type of MLM is embossed to overcome binary MLM system which is considered as a money game.

  • System Break Away

The MLM system type Break Away it will develop its network with emphasis on the width. Bonuses earned by partners will be even greater if the frontline of his more and more. However, the disadvantage of this system is the officer agents have to arrange everything yourself. In addition, this system also allows the downline to overestimate upline him. In the beginning, the bonus will be in the can by the partners will be small, but this bonus will continue to increase if it is in the top ranking. Typically, companies that apply the MLM system will do the lure of bonuses recruitment because of the bonus early in his career is very small.

Advantages and disadvantages of Multi-Level Marketing

  • Advantages Of Multi Level Marketing
  1. MLM can bring in passive income, which turns out to be quite promising as an additional fixed salary every month.
  2. MLM training every members to hone the skills of communication with your downline him, so that will form the soul of personal selling is very strong.
  3. Expand business relationships.
  • The Weakness Of Multi Level Marketing
  1. Each member MLM is not a businessman, but just a follower that exist in a system of hierarchy that are complicated, where they only have control of which tends to be a bit. So, they will be controlled by a system that is applicable at that time, and could not smoke.
  2. MLM will have a negative effect on the real sector. If already a lot of people are tempted with the MLM, then all the activities in the real sector will be disrupted, because the velocity of money in MLM is only within the scope of the company only and will certainly reduce the productivity of the community to work hard.
  3. MLM will make a lot of people do not want to strive to play their capital in business activities in the real sector. Whereas, the required capital in the real sector is quite large.
  4. Money pre member that rotates in the MLM business will not be guaranteed by the government in terms of security. So the money belongs to the member, there is the possibility can not be returned.

Conclusion

If taken from the origin he said, multi have the meaning of a lot, the level has a meaning level, and marketing is the marketing, so that Multi Level Marketing is a marketing system that is tiered and more. To make it easier to get the bonus, usually the partners of the companies that apply the MLM system this will apply the rules in it will give you the money as a bonus result of the recruitment of partners who have them bring. Your task is to only sell products MLM companies and start looking for new business partners as much as possible to join as a member, to later be able to form an extensive network.

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