Chapter: 12th Commerce : Chapter 15 : Elements of Marketing : Recent Trends in Marketing
Multilevel Marketing
Multilevel Marketing
Multilevel Marketing is the marketing strategy
wherein the direct sales companies encourage its existing distributors to
recruit new distributors to facilitate the sale of goods and services. The
distributor is compensated not only for the sales generated by him but also
gets a percentage on sales revenue of the other distributor he recruits, thus;
a multilevel marketing is a type of direct selling wherein the distributor
sells the product via relationship referrals and word-of-mouth marketing. The
salespersons or distributor not only sell the products but also encourage
others to join the company. The recruits are called
as the participant’s “Downline” or distributor’s “Downline”. Example,
Tupperware, and Amway are the direct sales companies that use the multilevel
marketing. The multilevel marketing is also called as a network marketing,
referral marketing or pyramid selling. For instance ‘A’ sells to ‘B’ a product.
In these sales ‘A’ gets commission on sale to ‘B’ who in turn sells to ‘C’, D,
and E. A gets certain percentage commission on B’s sales to C,D, and E.
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