MLM or Multi-Level Marketing is one form of marketing or marketing that is currently being cultivated by many people. Domestically, many companies implement this MLM business, ranging from nutrition to cosmetics. Another term that is often used for this MLM business is pyramid marketing or network marketing.
What is Multi-Level Marketing?
MLM or Multi-Level Marketing Business is a marketing system that utilizes customers as a distribution network. If taken from the origin of the word, multi means many, level means level, and marketing is marketing, so Multi-Level Marketing is a tiered and many marketing systems. MLM is a marketing system that is used by giving bonuses to consumers or customers to be directly involved as a seller and can make profits on the partnership line.
Members who are members of MLM will be referred to as trading partners, distributors, or members. Furthermore, the trading partner will invite other parties to become members, so that the customer network or market can be wider and bigger.
The success of trading partners in inviting and adding members will be able to increase the company’s turnover so that it will provide maximum profit. Therefore, the company will provide benefits to its trading partners in the form of incentives in the form of bonuses.
Multi-Level Marketing System
The following is an MLM work system based on Setiawan’s opinion (2017):
- Initially, you will be sponsored by a member or distributor of an MLM company. Your sponsor is a distributor who has previously joined an MLM company. Your job is to only sell the MLM company’s products and start looking for as many new business partners as possible to join as members so that later they can form a wide network.
Pay the entry fee/registration. Everyone who wants to join must pay a certain amount of money, the amount of which has been determined by the company. This registration fee will later be handed over to the nearest stockiest party as well as providing a form that has been registered and filled out by prospective members. After paying a certain amount of money, the distributor or member will get various facilities to help sales and recruit other members.
- Sign an agreement or contract. A member who has paid the entry fee is required to sign a contract that is binding on the company and the member. A member must comply with various regulations that have been previously set, while the company must provide products, provide commissions, services, and guidelines so that members can run their business smoothly. Each member has the right to obtain various company products at wholesale prices or distributor prices.
- Carry out product sales activities. Furthermore, the members must carry out the activities of selling the company’s products to other potential customers. Most of the sales will be done directly or face to face, starting with a specific recommendation or direct approach. Usually, each member will explain the company’s various products and convince consumers of the benefits, advantages, or quality so that potential consumers are willing to buy the product.
- Develop a network. In addition to being in charge of selling the company’s products directly to potential customers, members must also develop the widest possible sales network. To increase the network, the members must be diligent in looking for prospects. Some strategies that can be used to build prospects are to develop the widest network, explore the entire market, meet many people, and appear as an agent.
Thus the discussion about the multi-level marketing business, hopefully, this article is useful.
