I am calling this post MLM Marketing 101 because it is going to be somewhat of an introduction into the world of multi level marketing and network marketing.
If you are new to the industry or are researching it this post is going to be a big help to you. I am going to explain exactly what it is, how it works, how you make money in it and what you need to do to become successful. 
I truly love this industry and absolutely believe it presents the greatest opportunity for the average ordinary Joe to be able to create a tremendous income and lifestyle.
You can read about my story, however long story short the MLM industry changed my life forever back in 2005 when I first got involved.
Is it for everyone? No it’s not. However if you decide it is for you anyone including you can have tremendous success with it if you learn how to do it correctly and then go to work doing so.
Alright let’s get this 101 overview rolling…
The Basics of MLM Marketing
It is first and foremost a business model. A model that is 100% unique and different from any other form of business on the planet.
It is a model that is dependent on the sale of the company’s product through distributors.
The distributors of the company sell the product directly to their network of contacts and in many cases these distributors also recruit other distributors.
The distributors are responsible for all of the sales of the MLM companies products and in return the company pays a commission to the distributor for each sale made.
The company will also pay a commission to the distributor for any sale of product made by other distributors they personally recruited into the business. Entrepreneur has a good definition for this business here.
Many companies will also pay commissions back to a distributor multiple levels deep in their organization.
Meaning if the distributor they recruited recruits more distributors the original distributor is paid a commission on any of their sales as well. This goes on for multiple levels deep and why the business is often referred to as Multi-Level Marketing.
Companies that choose to use this business model do not have to worry about marketing or advertising their products to the public as the distributors do all of that for them. They harness the power of word of mouth advertising which is the most powerful form of advertising.
They also do not have to worry about the logistics of retailing their product in stores; they are able to skip having to do this because they ship their product directly to the customer. Which is why this industry is also referred to as direct sales.
Learn more about how the industry works here:
Network Marketing How Does it Work?
The Different Types of MLM Marketing Opportunities.
There are countless companies in the MLM industry and as a result it can be very difficult to figure out which is the best company for you to join.
Company Example #1 – There are companies that have none of the multiple levels we discussed. With these companies you sell directly to your contacts and typically earn a larger commission for your sale then you would with the companies that pay you on sales made on multiple levels.
Typically the products you sell here are larger, more expensive one time sale items. Water purifiers, vacuums, and juice machines come to mind when I think of these companies.
Company Example #2 – Other companies are what we refer to as the party planner companies. Mary Kay, Avon and the Pampered Chef are examples of these types of companies.
You become a distributor and are encouraged to host parties where you invite people over to try out the products. You make a commission on the sale of the products from the party.
You then attempt to get all of the guests who attended to host a party of their own for you, where they invite all of their friends to come try the products.
There is typically the opportunity to recruit other distributors with these companies however the focus is centered primarily on you selling products directly to customers.
Company Example #3 – Then there is my favorite type of company which are typically referred to as Network Marketing opportunities.
With these companies you share the business opportunity or product with people. When they buy the product you earn a commission.
When they join the business opportunity as a distributor they will buy a large amount of product to help them build their business, you also earn off of this sale.
The power and beautiful aspect of network marketing is in the multiple levels we talked about. This is where the walk away serious residual income checks are built.
Your goal is to build a team of distributors often called a downline. Together you and your team go to work sharing the opportunity with other people. As sales are made and people sign up as distributors you earn a commission on all of the product sales.
You could have thousands of people in your downline making sales and you earn a commission off of them.
You will end up not evening knowing the majority of these people and you will be earning off the sales they make. As will they and everyone else who’s team they are on.
It is a tremendously powerful business model that evens the playing field and allows everyone in the business to create tremendous success and wealth.
You can learn more about the different types of companies here:
How to Become Successful in Network Marketing
So as I have just shared, network marketing is my favorite business model in this industry. It is the difference between building a small business and a big business.
If you want to simply earn a few hundred dollars here and there then the other models we looked at may be for you.
If you want to create a six or seven figure income then you will want to join a network marketing company.
If you want to simply play store, buy some product and sell it to friends from time to time the other models are for you.
If you want to build a huge organization of thousands of people around the world and earn significant commissions then network marketing is for you and I am now going to show you how to build a successful business with this model.
Step #1 – Get Your Head Right
First understand that this is a business, it is not a get-rich-quick opportunity. It will take time to become successful. You are going to have to study and learn new skill sets. It is going to take work and effort and you are going to experience frustrations and setbacks.
All successful business people understand all of these things.
If you can get your head right about this and go to work in my opinion it is a very difficult thing not to become successful.
Step #2 – Choose the right company.
There are many companies you can choose to partner with. Some of them are great, some of them are good and some of them are terrible.
You need to do your due diligence and not just jump into the first opportunity that you come across. Take your time and do your homework.
Make sure the company is a good fit. Make sure the product is something you can get behind.
It would be a terrible thing to join a company, go to work for a couple of years and then realize you hate the company and even worse the product. All of that work would be for nothing.
Here is a post to help you find the best MLM company for you:
Step #3 – Get Trained
So many people who join the MLM marketing industry mess this up. They think they know it all. They think they do not need any training, that they know how to build the business.
Salespeople are notorious for this. They mistakenly think this is a sales business and that since they are sales people they are going to crush it and don’t need any training. 9 times out of 10 they fall flat on their faces.
This business is not sales. It is not like anything you have done before. It is unique unto itself. It is a simple business model but it does require that you learn new skills.
If you spent your life savings on buying a franchise you would take the time to go to their training sessions.
The same thing must apply here if you want to be successful. Get trained and learn the right way to build your business.
Here are some posts to get you started:
The best mlm marketing strategy
How to build network marketing online
How to invite for network marketing
And there you have it my friend you have just mastered MLM Marketing 101.
For more training and to learn how to become a professional in this industry I recommend you sign up for my Free Prospecting Boot Camp. The sign up is on the side of the blog or at the bottom if you are on a smartphone or tablet.
Cheers to YOUR Success
Robb Corbett
P.S. If you found value in this post or if it helped you in any way, do me a favor and let me know in the comment section below.
Hi Robb, you’ve shared some great information here on mlm marketing. Mlm is a great business opportunity as you don’t have to physically ship products. However, as you rightly mentioned, it’s not for everyone. You do need the right training to succeed though. I joined a well known mlm company a few years ago and loved their products. Unfortunately, I had a very weak upline with poor support. In those days you were expected to talk to complete strangers, but thankfully things are much better now! With blogging and social media making it a gamechanger.
Hi Kathy, Big time game changer indeed!
While I’ve always been wary of MLMs, I do agree that choosing the right company can actually make a real difference. Not all MLMs are the same and they’re not all PYRAMIDS!
Thanks for the thorough review.
Hey Eric, thanks for dropping by. Actually no MLM are pyramids. Pyramids are pyramids and are scams. MLM’s are legit businesses. Like any business before you get involved make sure you do your due diligence and that the opportunity is legitimate. The DSA is a great place to start.
I think that the business model where you have to organize parties takes a lot of work and planning. Besides, for these parties you also need to invest, for example food and drinks, perhaps even venues, except if you can do it at home. Another great way to host something like this could be through a workshop where you use some of the promoted products.
Like you, I like the last business model the best, because you can build your network online, although that also needs a lot of work, and I can understand why it is not a get-rich-quick scheme. Building up your network can take months, even years, and most people don’t want to wait that long when they start a new online business.
The point about sales is a good one. Many who work in retail or other types of sales think that they can use their skills for online sales but it is totally different. I have come across people who didn’t want to learn new skills because they thought they knew it all, and then the chance of not succeeding is indeed bigger. You should always be willing to learn, right?
You got it Christine. And old saying in this business is a big ego equals a little bank account! Gotta be willing to learn from those who have done it.
Thanks for providing a complete rundown on MLM Marketing. Many people get into MLM with a mindset of get rich quick opportunity…I am glad you clarified that point. Those 3 points you stated on getting started are absolutely key for any success in MLM.
Just a quick question, you have been in MLM marketing since 2005 – With penetration of internet and a worldwide reach to any audience don’t you think the opportunity to make money in MLM has become easier compared to the time when you started ?
Hey Satz, there is no question that the opportunity is greater now then when I first started due to the internet. It has never been easier to meet new people and prospect them for your business. But like anything else you need to learn how to use this great tool the right way.
Hey Robb,
This is such an informative and educational article on multi level marketing. I have struggled with mlm over the past five years and I think the reason why is, there are so many people telling us how to do it in the best way. I became overwhelmed so I gave up on it. But, there is always that niggle in the back of my mind to try it again, try it again, try it again.
Your website seems to be the best one I’ve come across, it is simple and to the point. You don’t talk about hundreds of software and platforms that we should use. You don’t tell us to put loads of money into it to earn a good living out of it. I appreciate this and I am going to take your advice, nobody else’s.
Thank you for sharing and keep up the great work.
All the best,
Tom
Appreciate the message Tom, listen to that niggle! 🙂 Cheers man.
Hi mate,
Another great post for those who are looking to get into MLM.
Some great and important points mentioned here…
steps 1-3 are vital, as you need to be focused to be able to take the opportunity seriously, if you dont then you cant expect results.
As you also mention, things take time and you have to realise that starting and growing a business takes time and effort.
If you have the drive to succeed, then you will see results. There’s lots of people out there though that want everything for nothing.
Put the work in and you’ll get your rewards.
I know people who have succeeded in MLM and it takes determination and hard work…but it can be done.
Great post as ever mate.
Definitely worth the time and effort! Cheers