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MLM/Multi Level Marketing or Direct Marketing is probably one of the most misunderstood marketing systems but is actually simple in nature.

MLM/Multi Level Marketing or Direct Marketing is where products or services are sold through a network of affiliate marketers. In exchange for marketing the product or service and for expanding the distributor base, the company will pay out commissions on a multiple number of levels within the network.

The common misunderstanding or belief is that the products being sold or the service being performed are overinflated in price. This is not usually the case but can be true also of regular retail sales as well.

In a typical retail sale 80-85% of the cost of a product is in it's distribution to the end consumer. In MLM/Multi Level Marketing or Direct Marketing the company uses that same 80-85% to pay out the commissions to the network in exchange for sharing the product or service.

MLM/Multi Level Marketing or Direct Marketing should not be confused with a Pyramid or Ponzi Scheme. The Federal Trade Commission defines a Pyramid or Ponzi scheme as the exchange of money with no product changing hands or real service being performed.

Read more: What_is_an_MLM

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12y ago

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