 | This article needs additional citations for verification.
Please help improve this article by adding reliable references. Unsourced material may be challenged and removed. (July 2008) |
| Marketing |
|---|
| Key concepts |
|---|
Product / Pricing / Promotion
Distribution / Service / Retail
Brand management
Account-based marketing
Marketing effectiveness
Market research
Marketing strategy
Marketing management
Market dominance
|
| Promotional content |
|---|
Advertising / Branding
Direct marketing / Personal Sales
Product placement / Public relations
Publicity / Sales promotion
Underwriting |
| Promotional media |
|---|
Printing / Publication / Broadcasting
Out-of-home / Internet marketing
Point of sale / Novelty items
Digital marketing / In-game
Word of mouth
|
| This box: view • talk • edit |
Multi-level marketing (MLM), also known as Network Marketing, is a business-distribution model that allows a parent company to market its products directly to consumers by means of relationship referrals and direct selling.
Independent, unsalaried salespeople of multi-level marketing, referred to as distributors (or associates, independent business owners, dealers, franchise owners, sales consultants, consultants, independent agents, etc.), represent the parent company and are awarded a commission based upon the volume of product sold through each of their independent businesses (organizations).
Independent distributors develop their organizations by either building an active customer base, who buy direct from the parent company, or by recruiting a downline of independent distributors who also build a customer base, thereby expanding the overall organization. Additionally, distributors can also earn a profit by retailing products they purchased from the parent company at wholesale price.
Distributors earn a commission based on the sales efforts of their organization, which includes their independent sale efforts as well as the leveraged sales efforts of their downline. This arrangement is similar to franchise arrangements where royalties are paid from the sales of individual franchise operations to the franchisor as well as to an area or region manager. Commissions are paid to multi-level marketing distributors according to the company’s compensation plan. There can be multiple levels of people receiving royalties from one person's sales.
