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Becoming a distributor for a multi-level marketing (MLM) organization begins with choosing the product or service to represent. The typical second step is to sign up with that organization through an MLM distributor currently working with it. There usually is an initial purchase of products required after which an individual can begin selling the company's products or services as a distributor. Multi-level marketing, which also is often called network marketing, is a type of sales and sales management career in which independent distributors sell a given company’s products and recruit others to sell as well.
The concept of multi-level marketing began in the United States in the 1940s and has evolved from selling vitamin supplements to virtually any product or service including health and beauty aides, housewares, food and wine, legal services, travel, and auto fuel, among many others. For many, the allure of the MLM model is that it allows an individual, for a relatively small investment, to build a sales team, called a downline, that can multiply by many times the income one person could earn selling the products.
A major advantage of the MLM business is that a prospective distributor can begin selling and recruiting a downline without the risk of leaving a current job. The process begins with the prospective distributor selecting a company with which to work. Typically, the prospective MLM distributor chooses a company that offers products or services he or she has either bought or would like to sell.
Most MLM companies have a similar compensation agreement in general that varies at the specific levels of cost of buying in, required sales, commission on sales, required recruiting and residual commission on recruits. Bonuses such as travel or the use of an auto are typical as well. The new MLM distributor normally selects a company where the product and opportunity combine to make a personal fit.
In almost MLM organizations, a new MLM distributor joins by contacting an existing distributor. Most network marketing companies have websites, and, typically, online inquiries to become a distributor will be routed to the nearest existing distributor. The new MLM distributor then becomes a part of the existing distributor’s downline.
Usually, the first step after signing up is to buy a required minimum level of products for personal use and for resale. This cost of this can vary widely with the type of product or service offered. In some case, MLM companies require training sessions prior to selling. Some companies offer online training.
After the prospective MLM distributor has selected a company, signed up, bought in and completed training, he or she can begin selling. Typically, after hitting a given level of sales volume and consistency, the new distributor can begin recruiting as well.