Making a simile, this scheme could call it a: Multi-Horizontal Marketing. Photo courtesy of FirstClassmlm.com while in MLM companies, what they do is recruit one or several distributors who get customers and recruit other distributors (as do traditional enterprises). But the difference is that each dealer has the opportunity to recruit and train other distributors. To others the MLM distributors are totally independent, i.e. their activities, schedules and sales strategies not dependent on the company but each Distributor.Multilevel companies only pay commissions to its distributors, not salarios(no son empleados sino agentes independientes).
This is beneficial for the company since this lets you expand quickly thanks to the large number of new dealers that are being trained to recommend (or sell) their products, without having to spend money on advertising or on wages of unproductive salesmen.This is also good for dealers because your earning potential is not limited to what they can sell, since they can earn commissions on sales of the distributors that they train, directly or indirectly: If you want to better understand why the potential of an MLM business is so appealing for many, make sure you read the business MLM article: Why they are so attractive for many? Finally, both the traditional and multilevel companies have a similar purpose: provide a product or service that in any way benefits its users or consumers. But obviously, all companies need to publicize that product or service to someone to buy it. For this they use different methods to promote and distribute his product, as it may be to rent a shop in a commercial area, advertising on radio, television, newspaper, internet, tele-marketing, or MLM (Word of mouth advertising).From my point of view, the big difference between a great MLM company and a large traditional company is the way in which your money is invested to publicize your product/service.While the Nike company for example spends $300 million each year to make a few famous few (eg. Micheal Jordan, Tigger Woods, Christiano Ronaldo) wear their shoes (tennis) in a television commercial, a multilevel company uses these same $300 million to be distributed among thousands of distributors depending on their productivity and their teams of distributors. Photography courtesy of in conclusion, MLM is a method of distribution (or promotion) that is essentially based on the power of recommendation person to person, who recommended basically 2 things: 1. A product of which feel satisfied as consumidores2. A business opportunity that they like, them is giving results or see a good potential. Jose Manuel Medina is a Networker of the MLM business online.