MULTI LEVEL

MARKETING
Prepared By:-
BHANU PARTAP SINGH
IMS
PGDM(MM)
 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 TRADITIONAL 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
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.

4- Health Products are sold most in MLM.

 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

 Unilevel Plan

 Matrix Plan

 Stairstep Plan

 Binary Plan
UNILEVEL Plan
As the name suggests, the plan allows a
person to sponsor one line of distributors,
called a "frontline.“

There are no width limitations,

meaning there is no limit to the amount
of people one can sponsor in the
frontline.

The common goal of this plan is to

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

Use only one commission type, the level

STAIRSTEP Plan
Sales volume is created by recruiting and
by retailing product.

Various discounts or rebates may be paid

to group leaders.

 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
minimal sales quotas.
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 commissions.
 MLM Companies in INDIA

 Attitue Trading (P) Ltd.

 Amway

 FLP

 Tupperware

 DXN

 RCM

 Modi Care

 Oriflame

 HLL

 RMP
 WORKING Of MLM

RMP(Resource of Money & Power)

Choose your product among 12 different products

 Get the Demand Draft

 Choose your sponsor

 Get your sponsor id

USER ID – vij0003id

TRACKING ID – RMPLKJH14098
RMP has Binary Plan
 SALES TECHNIQUES
 Look for a prospect

 Attending Business Meeting/Seminar

 Convince prospect for the business profits

 Take the joining

 Give training
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
encouragement from the entire team.
 CAREER GROWTH IN MLM
 Most MLM companies provide career growth in terms of Levels and
Target is ceiling.
 Commission earnings are weekly

 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.

 Management should not be a part of some past illegal things.

 At least a Private Limited firm should be there.