MLM Origins in The USA
It isn’t easy to figure out just when the Network Marketing and multi-level marketing business design first came into operation, as it has been used in several form or another for many years without the name it now has. Travelling sales people have been around since the mid to late 1800s and towards the end of the 1800s many companies gave these salespeople licence to train new salesmen for a percentage commission depending on their sales.
In 1945 an american company known as Nutrilite started the first documented Multi level markeing pay plan, where Distributors with a proven sales history could train new distributors for their own business. They would then receive commissions based on their own productivity and the productivity of the people they trained.
In a genuine Network Marketing (multi-level marketing, MLM) company your commissions are always based on the sale of products. This might be from sales you personally make, or sales made by a member of your team, or downline, but the only way to earn commissions is by distributing products. The more products sold by you and your team, the higher your commissions!
Regrettably, the Network Marketing business model has been open to exploitation by less respected organizations, or persons, who have used the industry name to cover unlawful pyramid schemes. In an unlawful pyramid you pay money and receive no tangible goods in return. Thus, the people promoting these schemes get commissions for signups and not commissions depending on the quantity of goods sold.
The function of an individual in a pyramid is to inspire people to part with money for nothing in return, that is both illegal and immoral! The function of a Multilevel Marketing distributor is to promote the benefits of an item and to find individuals who have a need for their product. They can also recruit new members into their team with a view to opening sales channels within new social networking systems. If your business has a high quality product that truly benefits the buyer, then working with a Multilevel Marketing company could be ethical, rewarding and lucrative.
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