She Loves Me … She Loves Me Not
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She Loves Me … She Loves Me Not
NOTE: This article is part of the free eBook, “The MLM Files.”
Copyright © 2002. Dan Levy. All rights reserved, unless specifically granted.
Exactly What Is MLM?
Remember the old commercial that pitched some women’s shampoo. It went something like; “if you tell two people, who tell two people, and so on, and so on…” The point it tried to make was if everybody who used the product told two other people about it, soon everybody would be using the product. That is exactly how MLM, also called Multi-Level Marketing, or Network Marketing works.
It is referred to as Multi-Level, because your business consists of different levels. In theory, as you go to each lower level in your business there are more people. Each MLM has it’s own structure, or matrix.
For this example, I am using a 3 x 5 matrix. In other words, in your business, you may have only 3 people on your first level. And, your business may be five levels deep. Think of it as, “if you get three people, who get three people, and so on…”
So as your matrix fills (if it fills), you will have this many people in your business:
If you recruit 3 people then your 1st level is full. These 3 people can recruit 3 people each for their 1st level, your second level. That fills your 2nd level. This process repeats all the way down.
If you recruit more than 3 people, then these recruits go downward in your matrix to fill the 1st empty position. This is known as spillover. So, some of the people in your matrix will have their matrix partly filled by you. And, your matrix may be partly filled by the person who recruited you.
OK, so what does this mean?
When you decide to join an MLM, you are going to be selling, or marketing, some product, or service. For your efforts, the company that owns the product or service will be paying you a commission. Sell 10 products or services in a month, you get 10 commissions that month. If that product sells for $15 and you get a 20% commission, then you earn $30 on 10 sales.
But, with MLM, your efforts are duplicated. You will be earning commissions on the efforts of all the people in your matrix. Now, the commissions you earn on them will usually be less than the commissions you earn from your own efforts. And, each MLM will have it’s own commission structure. You may earn a different commission on sales on each different level of your matrix.
The key is in this duplication. If each of the 110 other people in this example matrix also makes 10 sales, then you would not just earn commission on the 10 sales you made. You would earn commissions on 1110 sales that month. In other words, if you earned 5%-10% on sales made by the people you recruit, and if they made 10 sales each, you could earn about $1300 for the month, even though you only sold $150 of products yourself. That’s the power of duplication.
Let me include a bit of a disclaimer here. This matrix structure almost never works the way it does in the examples. First, you will probably never get a full matrix. Second, you may never get many of the people in your matrix to actually make many sales. It is entirely up to you to generate the sales. You may need to motivate the others to sell.
In a MLM environment, there are three types of people. There’s you, your upline, and your downline. And, you are all three.
Your upline consists of the person who introduced you to the business. This person is sometimes known as your sponsor. The upline also consists of the person who introduced your sponsor to the business, and the person who introduced them, etc. Think of the upline as your parents, grandparents, great-grandparents, etc. in the business. Most MLMs require your upline to provide some type of training to help you succeed in the business.
Your upline will usually earn commissions on the products you sell. So, in reality, the better training, and help they provide, the more commission they will make. Also, the better they train & help you, the more sales you will make. And, the better you will be able to train the people in your matrix.
As soon as you recruit someone, you become part of an upline.
Your downline consists of your matrix, which has already been explained. Everyone you bring into the business, and the people they bring in - are your downline. You earn commissions from these people. As your ‘upline’ should have trained you, it is up to you to train them. The better you train & help your ‘downline’, the more sales they can make. They are also better able to train their downline, some of which is also yours.
Does this really work?
Yes and No.
How’s that for being evasive?
The fact is there are many bad MLMs. Most of these MLMs work only for a few people at the top of the original matrix for the company. Most of these rely mainly on recruiting new people, filling the matrix, and paying a “sponsoring bonus” for each person recruited. There is little emphasis on selling a product, if there is a real product at all.
The good news is there are also some good MLMs. The good ones provide lots of training. They also put the most emphasis on the products. The products are not leads, mailing lists, recipe swaps, or anything like that. The products are real products that anyone & everyone may use.
So the bottom line answer is, if you are in a good MLM, yes it can work. Tips on how to find a good MLM can be found in my article, “My Dad Can Beat-Up Your Dad.” You can get this article where you got this one, or follow the link at the bottom of the page.
Until next time,
