Multi-level marketing is the type of marketing model in which profit is made from direct sell or the commission from the member-recruited member. In simple term, this is the process of gaining revenue by directly selling the goods and by referral.
With the expansion of the Internet platform at rapid speed, this is gaining immense height.
Multi-level marketing is shortly known as MLM, referral marketing, pyramid selling or Network marketing.
Why is this Effective?
Unlike tradition marketing scheme that gives the bonus to one who sales or brings the customer, the MLM marketing system gives the commission to the basis of recruit. This eliminates the hiring of the individual on the monthly basis for selling product and service.
As this type of marketing gives direct credit to the individual bringing the customer. The process of hiring the employee gets eliminated thus tends to be more profitable.
The Hidden danger of multi-level marketing system can be of grave concern. Bonus incentive can be attractive for anyone willing to earn money. Any illegal activities can flourish in short period of time. There are various dupe cases in the different part of the world under this scheme.
Due to several hidden danger, many governments around the globe are against the Multi-Level marketing scheme.
A pyramid scheme is the common marketing practice in the long history. Under this scheme, the early investors receive the huge sum of money than other investors. There are rife criticisms that Multilevel marketing does not fit the criteria of Pyramid Scheme.
Do Investor Gains for Investment
It can be of great profit to the investor if the business is legitimate. This is due to the reduction in expense. The word of the mouth can be good for selling product and service.