Most commonly, the salespeople are expected to sell products directly to consumers by means of relationship referrals and word of mouth marketing. Some people use direct selling as a synonym for MLM, although MLM is only one type of direct selling, which started centuries ago with peddling.
History
There is a large amount of debate as to when multi-level marketing started; some say it started in the 1920,1930s with Nutrilite, 1940 with the California Vitamin Company 1960, and even as late as the 1970.
Setup
Independent non-salaried participants, referred to as distributors (or associates, independent business owners, dealers, franchise owners, independent agents, etc.), are authorised to distribute the company's products or services. They are awarded their own immediate retail profit from customers plus commission from the company, not down-lines, through a multi-level marketing compensation plan, which is based upon the volume of products sold through their own sales efforts as well as that of their down-line organization.
Independent distributors develop their organizations by either building an active consumer network, who buy direct from the company, or by recruiting a down-line of independent distributors who also build a consumer network base, thereby expanding the overall organization. Additionally, distributors can also earn a profit by retailing products they purchased from the company at whole sale price.
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