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Chapter: 12th Commerce : Chapter 15 : Elements of Marketing : Recent Trends in 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.

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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12th Commerce : Chapter 15 : Elements of Marketing : Recent Trends in Marketing : Multilevel Marketing |


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