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Understanding How Multi Level Marketing (mlm) Works

In recent years, MLMs have gotten into telecommunications, including local and long distance services and cell phones. Others have developed online services or website products. Today, virtually everything is available from an MLM. Over 2,000 companies in the United States are MLMs and they made over $28 billion in sales in the past year. MLMs employ 13 million people as independent sales people.

Unlike traditional companies that sell to the public, MLMs work on the principal of relationship marketing. Each distributor sells to his friends, family and co-workers. Usually, one of these individuals is interested in becoming a distributor and will sell to his friends and relatives and so on. The system works because each distributor has a vested interest in making it work. The distributor receives a percentage of the sales of the people he has recruited. As well, each distributor is also a consumer of the product being sold. Product and brand loyalty is fierce. There is no need for a store. Everything is sold direct to the consumer and the actual products are shipped to the customer from the MLM warehouse.

A distributor has only so many friends and relatives. What can be done to enhance sales and attract new recruits? One way is to purchase mailing lists or “leads” of customers who have shown, by responding to a generic business opportunity ad, an interest in becoming a distributor. These lists contain the contact information of potential recruits: names, addresses, phone numbers, email addresses and other information.

How are leads generated? Companies such as
provide leads obtained from newspaper, direct mail and Internet advertisements. They then compile the names and contact information according to phone numbers, e-mail addresses, survey data, gender specific groups, area code, and other categories. In every case, the leads represent people who have indicated they have an interest in working on their own as a distributor for an MLM. Prices of lead lists vary depending on the category and number of leads ordered. The distributor uses the lists for his/her own preferred method of contacting new prospects. Because the people to be contacted want to be contacted, the distributor has a greater chance of getting recruits than with a scatter-gun mailing to people who may or may not be interested in the product.

In addition to buying lists of category specific leads, distributors can purchase the MLM Genealogy Lead List, which provides more than 4.1 million leads with names, telephone numbers, fax numbers and e-mail and mailing addresses. This set of lists is sold to the distributor on a CD. There are also services, such as
Go Leads
, which offer a monthly access to the company’s computer database.
Go Leads
offers leads to 13 million businesses and 200 million consumers in the United States.

The Internet is filled with ideas for increasing leads and multiplying sales. There is a book of customized sales letters that can be downloaded and used in mailings. As well, there are networking events, blogs, websites, books, newsletters, forums and focus groups to share information on generating leads. There is WAHM, the work at home moms network, and the Parentpreneur Club, offering advice to mothers and parenting couples respectively. Several journals and online newsletters can be found online, including Network Marketing Times Online and the Network Marketing Business Journal. Google Adwords can also be a source of new leads.

While MLMs work on the principal of relationship marketing, the most successful distributor is one who looks beyond relationship boundaries and works hard to attract new clients and recruits.

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