MLM Product: Understanding the Concept

Network marketing, or multi-level selling (the sale of MLM product, or multi-level marketing), is a direct selling method in which individuals sell products while recruiting other salespeople to build a network.

Network members receive commissions not only on their own sales, but also on those made by the recruits they have integrated into the network. This model is based on both product sales and recruitment.

In this article, we are going to thoroughly explore the MLM model products, its potential excesses, the best companies in this sector, the industries where MLM thrives, and the management software that makes it easier for MLM to operate.

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What does MLM produce?

The MLM product is a Business model Where a company sells its products through a Network of Independent Distributors.

These distributors are paid not only for their sales, but also for the sales made by the members they sponsor.

The main idea is to create a system where direct selling is combined with the development of a network to increase revenue.

Unlike a traditional model where businesses rely on resellers or stores, MLM is based on a Direct Relationship between the seller (or distributor) and the consumer.

The distributor often becomes a product ambassador, because he uses the products himself and recommends them to those around him.

MLM Product vs Pyramid Selling

Although similar in structure, the MLM product should not be confused with Illegal Pyramid Schemes, where income is based solely on recruiting new members, With No Real Sale of products or services.

In a legitimate MLM, commissions should be based primarily on product sales rather than simply recruiting others.

The dangers of MLM product

Although many MLM companies operate within the legal framework, the model can easily get out of hand and lead to drifts.

1. Excessive focus on recruiting

One of the most common excesses in MLM is the overvaluation of recruitment compared to the sale of products.

In some cases, the commission structure encourages distributors to focus more on adding new members than on marketing products.

This can lead to disguised pyramid structures, where few products are actually sold to end consumers.

2. Unequal returns for participants

In many MLM businesses, people at the top of the network receive significant commissions, while the majority of hires at the bottom of the pyramid struggle to make significant gains.

Many participants end up spending more money than they earn, especially when they are forced to buy inventory of products to stay active in the program.

3. Social and family pressure

MLM distributors are often encouraged to sell their products to friends and family, which can lead to social tensions.

The line between personal and professional relationships is becoming blurred, and some participants feel pressured to use their personal network to maintain their MLM business.

The Best MLM Product Companies

Not all MLM businesses have the same risks.

Some of them are well-structured, transparent and focus on selling quality products rather than on mass recruitment.

1. Amway (International)

• Sector : Household products, cosmetics and food supplements

• Founded in the United States, Amway is one of the biggest MLM companies in the world. It offers a diverse range of products, including dietary supplements, skin care and household products.

• Amway has a strong presence in Europe and has a solid reputation.

2. Herbalife (International)

• Sector : Nutrition and well-being

• Herbalife Specializes in nutrition products and dietary supplements.

• The brand is very popular for its weight loss and fitness products, and has an extensive network of distributors in Europe and around the world.

3. Vorwerk (Germany)

• Sector : Household appliances (Thermomix, Kobold vacuum cleaners)

• Vorwerk Is a German company that is very well known for its high-end household appliances, including the famous Thermomix.

• Its MLM strategy is based on live demonstrations to sell its products, especially through home representatives.

4. LR Health & Beauty (Germany)

• Sector : Cosmetics and well-being

• LR Health & Beauty is a German MLM company offering personal care products and dietary supplements, with a strong presence in Europe.

• LR is particularly recognized for its aloe vera-based ranges and its exclusive fragrances.

5. Tupperware (International)

• Sector : Kitchen utensils

• Known all over the world, Tupperware Uses the MLM sales model to sell its storage boxes and other kitchen utensils.

• His home meetings, or “Tupperware parties,” have been famous for decades.

6. Forever Living Products (International)

• Sector : Aloe vera-based products

• Forever Living Products focuses on the production of aloe vera-based products, including skin care and dietary supplements.

• The MLM company is active in more than 160 countries, including France.

7. Captain Tortue (France)

• Sector : Fashion and clothing

• Based in France, Captain Tortue Specializes in the direct sale of women's clothing.

• Fashion consultants organize home sales, creating a solid MLM model in the fashion industry.

8. Nu Skin (International)

• Sector : Cosmetics and anti-aging

• Nu Skin is an American company with a strong presence in Europe, offering anti-aging skin care products and nutritional supplements.

• It is distinguished by its strong commitment to scientific research on aging.

9. Oriflame (Sweden)

• Sector : Cosmetics

• Oriflame offers natural cosmetics using an MLM model.

• Present in numerous European countries, this Swedish company is known for its environmentally friendly line of skin care and makeup products.

10. PM-International (Germany)

• Sector : Nutrition and well-being

• PM-International is a German company that markets dietary supplements and skin care products under the FitLine brand.

• It is one of the fastest growing MLM companies in Europe.

11. Aquasource (France)

• Sector : Natural food supplements

• Aquasource offers a range of natural food supplements, mainly based on seaweed.

• The company is well known for the quality of its health and wellness products in France.

12. Mary Kay (International)

• Sector : Cosmetics

• Mary Kay is an American cosmetics brand with a strong presence in Europe.

• It specializes in skin care and makeup products, and is based on an MLM model with an international network of beauty consultants.

13. Ringana (Austria)

• Sector : Cosmetics and well-being

• Ringana is an innovative Austrian company that offers natural and sustainable cosmetics and food supplements.

• Its MLM model is based on direct sales via a network of distributors in several European countries.

14. Youth Global (International)

• Sector : Anti-aging and wellness cosmetics

• Jeunesse Global focuses on anti-aging products and dietary supplements.

• Its flagship products include skin care and nutritional supplements, distributed through a global MLM network.

15. Stella & Dot (International)

• Sector : Jewelry and accessories

• Stella & Dot is an American MLM company with a presence in Europe, which sells jewelry, bags and fashion accessories through a network of independent designers.

• The model is based on direct sales through events or online.

These MLM companies have managed to distinguish themselves by offering quality products and by structuring their networks in such a way as to be attractive to each independent home seller.

Their success is often based on a combination of popular products and active support for their sales network.

MLM management software

MLM requires complex management of sales networks, commissions and stocks.

This is why many MLM businesses use specialized software to automate these tasks and ensure smooth management.

1. NuDE by SolidPepper

NuDE is a PIM (Product Information Management) solution, allowing companies to centralize information on their products and automate the management of product sheets.

This type of tool is decisive for MLM companies that manage a large amount of products and information.

2. Cloud MLM Software

This MLM software offers a complete solution to manage distributor networks, commissions, and sales performance.

It is ideal for businesses that want to monitor their network activities in real time and automate commission payments.

3. NetSuite

NetSuite is a powerful ERP used by many MLM businesses to manage their entire operation.

From accounting to inventory management, NetSuite allows centralized and automated management, which is particularly useful for large MLM businesses.

Conclusion

The MLM product is a sales model that, when properly structured, can offer attractive opportunities for businesses and distributors.

However, it is essential to choose businesses that focus on selling quality products rather than recruiting.

Management software such as NuDE from SolidPepper makes it possible to optimize the management of MLM networks and to ensure transparency in the monitoring of commissions and sales. If you are considering joining an MLM or creating one, make sure you understand the challenges and potential excesses of this model.

Get started for free with SolidPepper solutions and start streamlining your business.

FAQS

What does MLM produce?

Product MLM is a business model where distributors sell products while recruiting new members, with commissions on sales.

What is the difference between an MLM and a Ponzi scheme?

An MLM relies on selling real products, while an illegal pyramid scheme focuses only on recruiting without selling products.

How do you know if an MLM business is legitimate?

Check to see if the company focuses on selling products rather than recruiting. A balanced commission structure is also a good indicator.

What are the most popular sectors for MLM products?

The most popular sectors include cosmetics, nutrition, and wellness.

What tools facilitate the management of an MLM network?

Software like SolidPepper, Cloud MLM Software, and NetSuite help manage networks, commissions, and sales.

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