Basic Idea

Multilevel marketing (MLM), also known as "Network" marketing, are a way of selling goods or services through self-employed independent distributors. As a networker (independent distributor) you receive commissions - for both your sales of the company's goods or services and those of other people you recruit to join the distributors. Multilevel marketing plans usually pay commissions through two or more levels of recruits, known as the distributor's "downline."

Downline is the distributors recruited by you, and you receive commissions on their sales and the sales of the distributors they recruit.

Upline is the distributors who are above you in the MLM hierarchy and who receive commissions (overrides) from your sales.

To be avoided are MLM plans that are actually pyramid schemes (so called "naked pyramid scheme") in disguise - that is, plans that focus only recruiting more and more distributors, but have no substantive product at the bottom of the pyramid. New participants pay a fee to participate and hope to profit by recruiting others into the system. Chain letters are an example.

State laws against pyramiding say that an MLM plan should only pay commissions for retail sales of goods or services, not for recruiting new distributors. However, MLM companies typically structure their payment plan so that recruiting is more profitable.

Before you start working in particular MLM, get familiar with the following mainstream websites and web magazines.

You can find top Sites about Network Marketing at www.RichTrack.com.

Typical mistakes to avoid

1. The most important part of MLM is the education system of MLM company, but not "magic plan" nor "magic leader" who will help you to get rich quick. The most successful companies usually have the most advanced educational programs which cover people management, negotiations, sales, leadership, money management, and many more. Do not get cheated by "progressive plans" and "world leaders". Marketing plan is just the part of MLM business. The small part.

2. Taking part in naked pyramid scheme. Check if your MLM Company runs a pyramid. Avoid any plan that includes commissions for recruiting additional distributors. It may be an illegal pyramid.

3. Easy Money. Network distributors who are successful know their products, their customers, the company's vision, and are ready to do that which is necessary "hard work". A distributor whose mind-set is on laying a "foundation" rather than looking for easy money will be around a lot longer.

4. Be cautious of plans that claim you will make money through continued growth of your "downline" -- the commissions on sales made by new distributors you recruit -- rather than through sales of products you make yourself.

5. Don't pay or sign any contracts in an "opportunity meeting" or any other high-pressure situation. Insist on taking your time to think over a decision to join. Talk it over with your spouse, a knowledgeable friend, an accountant or lawyer.

6. Do your homework! Check with your local Better Business Bureau and state Attorney General about any plan you're considering -- especially when the claims about the product or your potential earnings seem too good to be true.

Top MLM Companies

1. Amway Corporation - A Global Leader in Multilevel Marketing

2. Dorling Kindersley Opportunity selling children's books.

3. The Body Shop Offers skin and hair care products with information covering campaigns, values and company.

4. Golden Neo-Life Diamite International A multi-level marketing company selling nutritional products and water filtration systems.

5. Nu Skin Enterprises Corporate site. Direct selling company with three divisions, Big Planet, Nu Skin and Pharmanex.

6. Big Planet An internetworking company offering a financial opportunity to a vast network of sales representatives.

7. Herbalife International Corporate site. Independent distributor offer selling personal care and nutritional products.

8. Avon Products, Inc. Corporate site. Representative opportunity selling cosmetics, clothing, toys, perfume, jewelry, books, and videos.

9. Tupperware Official U.S. web site with products available for sale, and information on parties. Work at home career opportunities.

10. Seasilver USA Offering nutritional supplements. Includes distributor information.