MULTI LEVEL

MARKETING

Prepared By:-
ABHISHEK KUMAR
LBSIM
PGDM(EVE.)
 HISTORY

MLM started in the US, in 1959, by business

partners Rich DeVos and Jay VanAndel, originally
with just one single product and a new and unique
business vision.

They believed that they should be paid relative to

the benefit the company continued to get from
their original work.
 MLM
Multi-Level Marketing(sometimes called Network Marketing,
Referral Marketing or Direct Marketing), multiple levels of people
are marketing a product to consumers.
A sales representative (also referred to as a distributor, member,
affiliate, partner or associate) gets customers and recruits and
trains another sales rep to get customers.
The products and company are usually marketed directly to
consumers and potential business partners by means of
relationship referrals and word of mouth marketing.
 Sales rep gets customers and trains another sales rep to get customers.

“Refer a friend and you’ll receive a discount on your next purchase,” this
is multi-level marketing.
 THE TRDITIONAL
COMPANY
In a non-MLM company, a sales manager and
sales reps are hired by the company.

Once a sales manager is overwhelmed, the

company can hire another manager or convert
a sales rep into a manager.
Traditional companies (non-MLM) use “Multi-Width”
Marketing.
 The Multi Level
Company
An MLM company “starts” by recruiting one person who gets
customers and recruits sales reps with the option to become
a manager.
The MLM company only pays commissions, not salaries.
This is beneficial to the company because of rapid
expansion by the number of trained sales reps.
This is also beneficial to the sales reps because their income
isn’t limited to only what they can sell - they can also earn
commissions for having trained other sales reps.
 MLM is Organic
Organically, the MLM industry is a fantastic
model. Here’s why:

 In its organic state one person shares a valuable

product or service with another
 A person shares a business idea with another
 The person who shares the business with
another ONLY profits IF the person they shared
the business with succeeds.

These three steps are the organic concepts of

MLM and are absolutely brilliant.
What kind of products
are sold most in MLM?
1- Products should have a authentic
presence other than mlm system
also.

2- Price should not be over for

repurchases.

3- Manufacturer of Product should

have good reputation.
 Criticism Of MLM

The Federal Trade Commission(FTC) issued a decision, in

1979 in which it indicated that multi-level marketing was
not illegal in the United States.
AMWAY was found guilty of price fixing and making
exaggerated income claims.
MLM's are also criticized for being unable to fulfill their
promises for the majority of participants
The exploitation of personal relationships for financial gain
MLM Compensation Plan

Ø Unilevel Plan

Ø Matrix Plan

Ø Stairstep Plan

Ø Binary Plan
 UNILEVEL Plan
ü As the name suggests, the plan
allows a person to sponsor one line
Click to edit Master text styles of distributors, called a "frontline.“
Second level
● Third level
üThere are no width limitations,
● Fourth level
meaning there is no limit to the
● Fifth level
amount of people one can sponsor
in the frontline.

üThe common goal of this plan is to

recruit a large number of frontline
distributors and then encourage
them to do the same.

üUse only one commission type, the

level commission type.
 STAIRSTEP Plan
§ Sales volume is created by
Click to edit Master text styles recruiting and by retailing product.
Second level
● Third level Various discounts or rebates may
§

● Fourth level be paid to group leaders.

● Fifth level

§Once predefined personal and/or

group volumes are achieved, a
representative moves up a
commission level.

§The original upline usually

continues to be compensated
through override commissions and
other incentives.
MATRIX Plan
•Matrix plans often have a
maximum width and depth.

•When all positions in a

representative's downline
matrix are filled a new
matrix may be started.

•Representatives in a
matrix earn unlimited
commissions on limited
levels of volume with
BINARY Plan
oIt allows distributors to
have only two front-line
distributors.

oThis "spillover" is one of

the most attractive
features.

oThe primary limitation

is that distributors must
"balance" their two
downline legs to receive
 MLM Companies in INDIA
q Attitue Trading (P) Ltd.
q Amway
q FLP
q Tupperware
q DXN
q RCM
q Modi Care
q Oriflame
q HLL
q RMP
 WORKING Of MLM

RMP(Resource of Money &

Power)

Choose your product among

12 different products
RMP has Binary Plan
 SALES TECHNIQUES

 Look for a prospect

 Attending Business
Meeting/Seminar

 Convince prospect for the

business profits

 Take the joining

RMP BUSINESS POLICIES
 Commission

 Incentives

 Ceiling

 Car Loan
Intellectual Distribution
Of Products
Because intellectual distribution represents the best
opportunity for network marketing companies and their
sales forces to succeed, what it is called the METS
Formula
Motivate,

Educate,

Train,

Support
 What’s wrong with

MLM…??
MLM Sales Technique: Rumors, Slander,
Defamation
 Math and Common Sense
 Learning the Hard Way(exploitation of
personal relation)
 High-pressure Selling
 "Mother, Let Me Tell You About a Fantastic
Opportunity..."
 Dubious Claims
 Motivation: Powerful but Misguided
 Exaggerated income claims
 REWARDS

Commissions based on the ongoing sales volume of

your downline group. Lots of personal
recognitions, public recognition and
 CAREER GROWTH IN
Most MLM companies MLM
provide career growth in terms of
Levels and Target is ceiling.
Commission earnings are weekl
These levels are, like:

SILVER GOLD STAR DIAMOND

PRESIDENT CLUB DOBLE CROWN CROWN

Check points for the
legal

MLM
Company must have their own branded
products.

 A good residual plan is must.

 Value for money should be there at the time of

joining.

 Products should be of daily use or must have

repurchase power.

 Quality should be good as it is word of mouth

business.
THANK
YOU