Multi Level Marketing is the process of joining a business venture and then benefiting from the efforts of people you yourself introduce.

How it works

A MLM business will typically offer 2 main sources of income.

1. Income on sales of a product or service

2. Commission on the efforts of those you recruit to the business

Your commission may also be determined by paying to join at a higher earning level, in a similar way to a lawyer buying in to a partnership.

The commission you earn from successive levels below you is known as residual income. As long as those people remain working in the business you continue to gain commission from them.

This commission will vary depending on the business but a typical scheme may offer 20% on the people you directly introduce and then 5% on anyone those recruits introduce, down to perhaps 7 levels.

How much money can you make?

Say for example a member generates sales of £5 per week.

In the following table we can see a commission of 20% for Sales achieved by yourself. If we assume that every person under you achieves the same sales and introduces another 5 people, by the 7th level, in theory there should now be 78,125 people on whom you earn 5% commission. This would equate to an income in excess of £1.2m per annum.

In practise however, things rarely run so smoothly. Many recruits will leave after a short time, disillusioned by results that have not met expectations. But there will remain a hardcore of members who have faith in the system and work hard to gradually build their income.

These people realise you need to invest time and money and that patience and persistence will eventually pay off. Your task is to identify such people and get them on board.

And remember, it only takes One Key Person to change your life in Network Marketing!

How to find the right business and which ones to avoid like the plague?

You should look for 2 main criteria

1. Does the MLM business have a good product to sell?

2. Does the company have a good track record?

Well known Products

Choose a scheme with a product you understand and can relate to. For example, take an online store, selling good quality products at excellent discounts. A mature market certainly but people understand it and will readily assess whether the products are value for money. You will also find it easy to introduce others.

One of the key considerations of any business is the potential demand. If the market is limited to a few areas it is more difficult to build your downline. Choose products that have good growth potential and have global appeal. Chances are you will also receive plenty of indirect advertising.

National lotteries also have potential. Everyone is familiar with them and if the product involves selling places in public lottery syndicates, for example, then you will obtain plenty of publicity from Television and the Press.

Avoid plans that offer success and riches arising from just selling the MLM idea to others. Say No to illegal pyramid schemes.

Federal Trade Commission offers useful advice on Network Marketing http://www.ftc.gov/bcp/conline/pubs/invest/mlm.htm

Conclusion: Take care in choosing the right business. Be prepared to invest time and money. Be Patient and Persistent and MLM really can make you RICH beyond your wildest dreams. .

Chris Wigg LLCM a.k.a. Horse4course-racetips.com, is a well known authority on UK horse racing and Lottery enthusiast. Currently employed by Plymouth University, England and owner of several successful businesses.