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Major corporations and companies are continuously searching for better methods of marketing their services and products as cost-effectively as possible. One solution that has become very popular is MLM and Network Marketing. Both methods have advanced from face-to-face marketing and use online marketing methods now. For example, many MLM recruiters use social media to attract recruits and even use websites like SubscriberZ to help cast a wider net.
How MLM Recruiters Got A Bad Reputation
You’ve probably heard MLM and network marketing referred to as one and the same. MLM recruiters have gotten a pretty bad rep from their old-school ways of chain marketing and the way they’re portrayed in the industry as “scammers.” This has resulted in the switch over in the terms that they now use and call themselves; nowadays, MLM’ers are now referring to themselves as “Network Marketers,” but it wasn’t always this way.
These two terms started off meaning two different things. I want to educate you on the differences in case you’re weighing your options and thinking about joining in on one of these ventures.
The Businesses May Be Structures Similarly, But There Are Key Differences To Consider
Yes, it’s true that within many network marketing companies, the business structure is very much like the structure of an MLM company. The difference is the distinctive concepts of the two. When I say “Prepaid Legal,” what is the first thing that pops up in your mind, MLM, right? I’m sure it did. I’m also pretty sure that you’re familiar with the payment structure of MLM companies too. MLM’ers get compensation for recruiting new distributors. Their company pays them a percentage and continues to pay them a residual percentage as their downline grows or widens.
As they increase the number of people they have under them, top earner MLM’ers get paid continuously month after month from the efforts of their downline. This process continues until the person at the top of the line gets bumped in rank. Kind of like the owner of Wal-Mart or McDonalds. Now it’s their job to keep their team motivated to continue to recruit more people so that they all can benefit financially. As the team brings in more distributors, they all get a percentage, and the pay starts from the top (remember, like the owner of Wal-Mart) down. With the person at the top of the line getting a higher percentage and the rest is trickling down the line.
Understand Network Marketing Properly
Now that you understand what MLM is, let’s move on to the network marketers. Network Marketing consists of many components. One of which includes the MLM structure we just covered. Network marketing put simply, is the leveraging of relationships used to get customers to purchase a service or product. When you really think about it, we all network with one another.
Your best friend just went to see an awesome new movie and told you about how good it was and suggested that you go see it. You then tell your husband, wife, boyfriend, or girlfriend to come and see the movie with you; they then invite more friends, and before you know it, you’re all heading out Saturday night for a group outing. That’s network marketing. You’ve used your relationships and influence to produce a fun night out at the movies.
The same concept goes for network marketing, leveraging relationships to influence purchases of products or services. There’s no downline building required, nor is there a “fat cat” sitting at the top. There are some network marketing programs out there structured like MLM’s, but most of them are not. Top network marketers are usually very good at building and maintaining relationships with many people, and they use those strong relationships to influence purchases. The Internet is the best way to leverage network marketing because it allows you to build and maintain many different relationships with many different people from around the world via email, phone, or other creative ways. You’re doing this every day; the only difference is that you’re not getting paid for it.
