There are many different types of marketing in the world these days, from email marketing to social media marketing and everything in between. However there are a few types of marketing which may not be so well-known in the general business world. That’s why today we are talking about a type of marketing known as multi-level marketing.
What is it?
Multi-level marketing is a type of marketing strategy which involves different levels of sales. It is the process where a sales company will pay their distributors a small fee to get them to recruit new distributors for the company. The fee in question is a small percentage of the new recruit’s profits from sale. This can be seen in many different forms, most notably perhaps are companies such as Juice Plus, which sees people trying to contact others through social media to get them to sell the product.
This type of marketing is a slightly controversial one because it uses the money from those at the bottom of the sales pyramid to line the pockets of those on top, however it is a very effective way of marketing and the recruits will often do so well that they don’t notice the money being taken out of their pocket anyway. Companies like le-vel thrive use this type of marketing successfully and it can really help the business grow.
One of the biggest issues with multi-level marketing is determining whether it is being used legitimately or not. For example, the company may be employing the pyramid scheme instead which is illegal and exploitive.
The identifying factor in multi-level marketing is that the money made by the company is mostly made by the selling of products to a consumer. The difference between this and the pyramid scheme is that in a pyramid scheme, the profits made by the company mostly come off the back of sales made by the recruits. It is essentially stealing money from the recruits to fund the business. If you do want to look into multi-level marketing you need to be aware of this and take action against this happening.
A Successful Example
It can be easy to feel as if multi-level marketing is too risky to go into, however in some cases it can be a huge help to a business. A great example of multi-level marketing comes in the form of a company called Herbalife. They are a company which sells weight loss aids and supplements, and they have been able to prove that 80% of their distributors do not try to recruit other sellers, and that their profits come almost entirely from the sale of the product to the public instead of its recruits.
The key to being successful with this type of marketing is to monitor your distributors and make sure that none of them try to abuse their position and take advantage of others. If you can do this then there is no reason why your company shouldn’t add this type of marketing to your repertoire.