Multi-Level Marketing (MLM) is a distribution-based marketing network that contains two or more tiers. Two other types of network marketing strategies are marketing-driven networks and name-driven network marketing. Some MLM programs allow you to make money five or more tiers deep, so there may be incentives for recruiting. Examples of MLM businesses include LuLaRoe, Magnetic Sponsoring, and Amway.
Network Marketing as a Business Model
If you are thinking of starting a business that will rely on multi-level marketing of any kind, be sure you have a solid marketing team at the very core of your organization. The stronger your base of marketers, the better your chances for long-term success.
Not everyone who wants to sell something will be good at it, but if you have someone excited about your business who might not be a perfect fit for your sales team, find another spot for them. Marketing is critical to the success of any business, but don't forget that sincerity and genuine enthusiasm about a company or product is a form of marketing in and of itself. If your only incentive to your sales team is money, they may cut corners or mislead others in an attempt to earn more for themselves.
You should also take the time to research your own state's laws regarding network marketing to make sure that your business is fully compliant. Deceptive marketing practices and pyramid schemes can land you in legal trouble if you are not careful.