Multi-Level Marketing (MLM) is a home-based business that involves sales or service of a consumer product through person-to-person, away from a fixed retail location. In MLM, the salesperson marketing a particular company product becomes a part of the chain. This sales person may be called a distributor, a representative or a consultant based on the company he represents. In MLM marketing, independent distributors market products and services to customers either through personal relationships or by one-on-one retailing.

History: Multi-level marketing or network marketing concept was introduced by Amway in 1976. In a Multi-level marketing (MLM) or network marketing every sales persons is associate with a parent company and becomes an independent contractor. Compensations paid to the sales persons are based on their products sold or services. Also compensations are based on the sales achieved by those they bring into the business.

With the arrival of the Internet, MLM companies have started to go online. MLM companies newly started or even established began to use the Internet to promote their products. Many new MLM companies started to establish their businesses on the Internet, which was termed as online MLM.

The concept of MLM should be mastered in order to succeed in this filed. The concept of MLM marketing is give below. In order to create wealth follow the concepts given below:

ONLINE MARKETING TECHNIQUES :

1. Selct a product or a chain of products you wish to market and find the list of targeted and interested prospects.

2. Distribute newsletters, hodings with relevant content on the product.

3. Establish yourself as an active member of the community in which you live in. Other members of the community who come to know and respect you will often refer you to others.

4. Niche directories or search engines. Find all the highly-targeted directories and SEs for your market, and then work to get listed.

5. Advertise in Television and Radio stations

6. Build your link popularity. For example, you can trade links with other businesses in your market so that you can 'share' each other's traffic.

7. Testimonials. Testimonials reveal the to the prospects that customers are happy and helps them to make the decision to buy.

8. Use PPCs (pay per clicks) if that's within your budget.

9. Conduct quiz, offer coupons, gift certificates to all the visitors participating in the contest.

10. Make good use of referral marketing. You can request satisfied customers using your product to refer prospects to you.

11. Supply free eBooks and materials on the product.

More than 85 percent of all sales conducted in MLM are produced by word of mouth. The results is that a friend tells another friend or associate to purchase a product or service because the customer was satisfied. Therefore, concentrate on developing future and referral business with each customer. "Everything you do must be aimed at the second sale. Ask yourself: Whether this is a satisfactory experience, so that my customer will buy from me again or tell his friends"

Compensation plans:

Every MLM company follow a particular compensation plane in order to provide commission to its distrubuters. The MLM compensations paid my these companies have been devised over the decades.

Unilevel or Stairstep Breakaway plans is the most popular and oldest plan. They feature two types of distributors -- managers and non-managers -- and three types of pay:

• Baseshop overrides are overrides of managers from their subordinate non-managers, collectively called a baseshop. This is the same as any other sales organisation.

• Generational overrides are overrides of managers from the baseshop of managers who were previously their subordinate. Compensations are provided to at least three generations of such managers.

• Executive bonuses are special allowances commissioned to managers who exceed a sales quota. For example, close to 2% of the sales revenue attained by the company may go to a bonus pool that is shared monthly pro rata to managers who exceed $10,000 in that month.

Matrix Plans limit each level in a group, forcing strong distributors to pile ("spillover") their recruits over people who did not sponsor them.

Binary plans limit each level to two legs. Commissions provided in this plan is based on "cycles," where a distributor is paid a fixed amount whenever both legs achieve a certain number of sales units each.

The Consultant doing the MLM business receives a commission on each sale, and also the sponsor who referred that consultant to the company. People in MLM are making great money using a variety of methods. Some work exclusively online. Others work exclusively offline. Some lead with the products. Others lead with the business. But the common aspects that link these people are that they found something they love to do.

The fact in MLM business is, when you refer your friends and similarly they refer their friends to your business. When your reference goes on and refer other people then you are paid commissions on those orders too!

Fraud in MLM:

Fraudulent MLM schemes usually come with higher entrance fees or would require you purchase expensive inventories. The major factor for an MLM ot collapse quickly is when the merchandise cannot be resold, this leads to financial losses to all the those people in the top of the pyramid.

The Federal Trade Commission advises that multi-level marketing organizations with higher incentives for recruitment than to sales of product, to be viewed skeptically. In April 2006, Business Opportunity Rule was proposed, that require all sellers in the business opportunities sectorincluding MLMs to provide enough information that enables prospective buyers to make decisions on their probability of earning money.

There's no single magical 'secret' that will transform a fledgling business into a powerful money-maker. Every business owner ensures that the various techniques are tested and refined until a solid, effective base is developed that produces the desired results.

The MLM business secret of success in lies in networking. MLM is so much so referred to as Network Marketing. MLM marketings major catch is not getting people interested in only buying the product but also in the sales of the same. Finding such people is crucial to the business.