How does mlm and residual income work

What does words like MLM, Residual Income and Pyramid Systems mean and how does it work.

Many uninformed people believe that mlm (multi-level marketing) or network marketing is a pryramid system and that it is illegal.

The structure of a mlm payment system looks a lot like a pyramid and therefore they think that only the top people make money. This could not be further from the truth.

People also believe that it is wrong to pay money to make money.

If you are invited to join a program and only have to pay once you must be careful. Ask the person who invites you where the money comes from to pay the other people.

Why? If there is no money coming into the system from sales of a product, where is the money coming from...have you asked yourself this question.

The only source it can come from is from new investors who are told that they can make huge profits by investing a large amount into a specific system...and they only have to invest once.

MLM is nothing else than sharing commission on a product that is sold. There has to be money coming into a system on a regular monthly basis...that can be from sales or membership fees, etc.

This is the big difference between a legal MLM and an illegal Pyramid System...

When you have a product that can be sold independently without the mlm system you can investigate it further because that will already be proof to you that the product can work without the mlm payment structure and that is a good sign.

The mlm payment structure gives the owners of the product the opportunity to save on big advertising costs in the media, television, radio, etc because they make use of the oldest and best advertising method there is and that is word of mouth...people telling people.

Let's look at an example....

Direct Selling
John is a sales rep and sells product A. He gets 10% commission on every product he sells. At the end of the month his sales gets calculated and he gets paid for all his sales. In the new month he has to start selling again because if he does not sell anything he will not earn anything.

Product  A   10% Commission
R100.00            R10.00

MLM

You get Product A to sell but instead of only you selling, you get other people to help you.

John joins the mlm program (Level 1) and gets somebody ( Mary) to help him (Level 2). Mary gets somebody to help her...(Scott) Level 3.

In the meantime you get somebody else to join as well (Peter) (Level 2)

Example

Level 1                                                       i  John
Level 2                                           i Mary           i (Peter)
Level 3                                           i Scott      i              i
Level 4                                           i           i        i            i
Level 5                                           i     i      i         i    i       i
Level 6                                           i    i   i    i     i   i   i   i   i

Now the commission is split into the different levels and depending on the product owner (company) who decides how much commission is paid on each level you can earn a lot of money from the people below you...depending on who works and who does not work.

You will earn a residual income from all the people below you. This is where a lot of people think residual income, sometimes referred to as passive income means you do not have to work....please wake up....there is no such thing as a free lunch.

Passive Income means you have worked hard to refer Mary.  Mary is also working hard and pays her monthly fee for the use of the product. That fee is then split up in different ways. The cost of the product is deducted...overhead costs (just like any other business) are deducted and the commission is split into the different levels.

That is in short how mlm works. You get paid every month for the work you put in the beginning because as long as every member who join, pays their monthly fee for the use of the product (whatever it is) you will receive an income from the members you referred as well as the members they referred for several levels below you. This mean you can receive a substantial income from several members over a period of time without doing the same work every month. It also means that your income does not start at zero every month but grows as the amount of members in the levels below you, grows.

It also means that you do not have to do all the work yourself but if each person does their little bit of work and refer only one person per month you will have a group of people of more than 2 000 below you in 12 months....imagine the amount of income you will receive from that amount of people.


 

Why do I have to Pay money to make money with MLM

It's funny isn't it.

When you get an offer where somebody offers you a million bucks by doing nothing or something like, just share this photograph or post on FB and you will receive a brand new BMW....most people will say the following..if it's sounds too good to be true...it probably is "too good to be true".

Ironically, a lot of people saying that, will secretly still share that link or photograph in the hope
of getting that car or a million bucks.

We have all seen those posts stating that some super rich millionaire has decided to share his millions of $$$'s with everybody on FB...?

Do you really believe it....have you shared something like that in the past. People do this for the same
reason they buy a lottery ticket...in the hope of becoming an instant millionaire.

Let me share a secret with you quickly...this is how people get's hold of people's Fb profiles and email addresses...and they start sending them spam...unwanted ads and messages...Think twice before you share those opportunities again.

Now, on the other hand, somebody makes a post and places an ad in one of the groups on FB offering people an opportunity to "work from home".  This requires that you sometimes need to pay a registration fee as well as a monthly fee.

Wow...red lights...everybody in that group shouts at the poor guy trying to rob people of their hard earned money by scamming them with registration costs as well as a monthly fee.

My question is, what do people want...everybody wants to earn extra money but nobody is prepared to do anything for it or put in any work to earn it.

This ad is probably about a network marketing product of commonly known as mlm (multi-level marketing).

I will agree with you, there are scammers out there as well  as gimmicks but if you really do your own research you will probably find that is not a scam.

How do you know which ones are scams and which ones are legitimate (legal)

First of all, there must be a PRODUCT. Any business needs a PRODUCT to sell to make money. The owners of the business/product use network marketing to distribute and market the product because people love to talk and share their views and experiences with other people.

This is something that most people do without realising it..."networking". When you have eaten out at a nice new steakhouse you will tell your friends about it (first level) and they will tell their friends about it (second level) and they will tell their friends about it (third level) and so it carries on. This is probably one of the best forms of advertising.

The steakhouse is getting the best possible form of advertising without paying for it and you are definitely not paid for it, are you?  That is all network marketing is...telling other people about your experiences...and getting paid for it.

Now, network marketing was developed many years ago by a company who realised that they could increase their sales by getting their sales reps to appoint their own sales reps underneath them and sharing their commission amongst them. By doing this they could cover a bigger area and reach many more customers which resulted in bigger sales and profits.

This system was developed as early as in the 1920's, 1930 and 1940's with various companies and products. This has been going for so many years and still people think it's a scam?

I agree that some of them may be illegal or scams.

What to look out for...
1. When somebody offers you an abnormally high income with only a once-off payment required. Just ask yourself one question...where does the money come from to pay current members. The answer is.....yes, you guessed it...they need new people to register on a continuous basis to pay the existing members.  Sooner or later the once-off deposit required to join will be increased slightly because the organisation does not have enough to pay the current members anymore. 

With mlm you have to pay for the use of the service or product on a monthly basis and that money is used to pay the company who provides the service or product and also the sales people who get a monthly commission. If you work and grow your organisation, your income grows...not by getting new people to pay more money to pay current members.


This is one of the differences between a legal mlm system and a scam. 

If you are interested in learning more and becoming involved in a legal multi-level marketing product where you can start working part-time from home at a very low cost to:

1. Make yourself an extra income on a monthly basis to cover your monthly expenses

2. Build up a residual income which will possibly help you to retire earlier than originally planned

3. Make sure you have an income to rely on for the day you retire

click here and add me as friend on FB.

We help people to help themselves...what is holding you back.





   


 

Werk van die huis af vir Ekstra Inkomste

Ek weet wat jou huidige omstandighede is nie maar as jy hier lees het jy heel moontlik die behoefte daaraan om 'n ekstra inkomste te verdien.

Ek het iets vir jou as jy van die huis af wil werk om 'n (2e) tweede inkomste te verdien wat jy deeltyds kan begin en later jou huidige inkomste kan vervang.

Hierdie is nie 'n skema wat jou oornag skatryk gaan laat word nie maar deur op 'n deurlopende basis maklike take te verrig op 'n daaglikse basis kan jy vir jouself 'n goeie passiewe inkomste opbou.

Daar is ook, behalwe die maandelikse inkomste bonusse betrokke waarvoor jy kan kwalifiseer soos bv 'n gratis webtuiste, vakansie vir 'n week by 'n tyd-deel oord en 'n motor.

As jy belangstel hierin en jy wil gratis inligting per epos ontvang, kliek hier en vul jou naam en epos adres in om die inligting te ontvang.

Do you have a Tree

We all Need a Tree!

I hired a plumber to help me restore an old farmhouse, and after he had
just finished a rough first day on the job: a flat tire made him lose an
hour of work, his electric drill quit and his ancient one ton truck
refused to start.

While I drove him home, he sat in stony silence. On arriving, he invited
me in to meet his family. As we walked toward the front door, he paused
briefly at a small tree, touching the tips of the branches with both
hands.

When opening the door he underwent an amazing transformation.. His face
was wreathed in smiles and he hugged his two small children and gave his
wife a kiss.

Afterward he walked me to the car. We passed the tree and my curiosity
got the better of me. I asked him about what I had seen him do
earlier.

'Oh, that's my trouble tree,' he replied 'I know I can't help having
troubles on the job, but one thing's for sure, those troubles don't
belong in the house with my wife and the children.. So I just hang them
up on the tree every night when I come home and ask God to take care of
them. Then in the morning I pick them up again.' 'Funny thing is,' he
smiled,' when I come out in the morning to pick 'em up, there aren't
nearly as many as I remember hanging up the night before.'

THIS ONE IS WORTH SENDING ON.

Life may not be the party we hoped for, but while we are here we might
as well dance. We all Need a Tree!
Wishing you a wonderful day!

Professionals Sort, Amateurs Sell

A short while ago I was sent this letter and it changed my total outlook on internet marketing. I want to share this with you. Is this not what we are supposed to be doing...

Words To Work By.

They should be tatooed on your brain if you're going to have any kind of success in your home-based business.

It's amazing to me how many times I get "pitched" in an average week and the person is almost always selling!

My friend, if you'll remember and apply what I'm about to share with you, it will set you miles apart from the multitudes of home-based business owners out there, desperately trying to recruit new people.

Here it is:

We Sort and we Market, we do not SELL!

Want to know one of the quickest ways to fail in your home-based business?

Become a sales person.

I've seen it happen. Someone comes into your business and he signs up a ton of people. He signs up 30 people in one month! This guy is a natural born salesman and is surely going to take you to the top of your company's comp plan. You've finally landed your "heavy hitter." 

Then what happens?

The people he signed up, within a couple of months, start to fall out and quit.

And your new golden boy can't figure out what's going on because it was so easy for him.

Why did they join that networking witness protection program?

They couldn't duplicate what the sales superstar did.

You see, people can't be duplicated.

That's why a good system should be in place that can be duplicatable. That system involves "sorting and sifting" through the numbers of people you pile into your "pipeline."

Sorting does not mean selling. That is why you need a good autoresponder that can do the work even when you are sleeping .

How do you know if you're selling when talking to a prospect?

The moment you start to explain anything about your product or service. If you say anything more than the name of your company, you are selling. If you tell them the price of your product or service, you are selling. If you start telling the prospect about how the compensation plan works, you are selling!

PLEASE DON'T DO IT!

Your job should be merely to sort (interview) as many people as you can. Choose the candidates that qualify for your time and then use your company's marketing tools to do all of the selling and telling for you.

That is why you need a good autoresponder.

The marketing tools could be a website, CD, flash presentation, a LIVE conference call, whatever. Just make sure it's a persuasive 

sales and marketing tool that does all the "heavy lifting" for you. 

Don't waste time with people who insists that you tell them "what's IT all about?" on the first call or introduction.

You don't become attached to any one person on the phone.

The person on the other end of the phone is a "nobody" that must qualify for your time. So until they qualify (by answering your pre-screening questions to your satisfaction) they are just a voice and a phone number.

You're not attached!

Again, "Professionals Sort, Amateurs Sell." 

Let this system sort the important people and then you can start selling to those that are really interested

Free Traffic to your blog

We all want traffic, right? Whatever the reason you want visitors or traffic...without traffic there is no reason to have a website or blog, correct. It is there for other people to see. The more the better. 

I think the time has come to formally introduce you to the VIRAL SPIRAL.

Some of us spend a lot of time on the net posting and making new friends but if you can get a system which wil spread your blog all over the net all by itself for FREE, would you do it? You can then sit back and do the things you want to do. Make new friends and spend time to chat with those that you want to.

This wil not cost you a dime. There are three websites to join where you fill in your details and then you tell all your friends about it so that they can do the same. I have put the 2nd website address to follow the first one and so on. Once you have a complete downline you change the address on all three websites to your blog address so that the visitors will be visiting your blog instead of the 2nd viral website you are advertising. By doing this you will receive thousands of visitors to your blog each and every day.

Do you have anything to lose....Noooooo.

Can you get something out of it? I think so! Thousands of visitors for FREE. It could be worth a try. 

Let's do it then. Just click here for your first link.

Becoming Financially Independent or Successful

Self image causes limitations on performance

Everybody has a self image. This means in short – What do you think about yourself? If you do not like yourself, how can you expect anybody else to like you? Your self image is hidden in your subconscious mind and it houses your good and your bad characteristics, how you act in certain situations and towards other people (we see quite a lot of people on the internet who do not think very much about themselves if you look at the comments in some forums).

You are born with a clear self image and from the first day of your life certain images gets imprinted into your mind on how you must act in certain situations. This creates a pattern which causes you to act in a certain way without thinking and if you allow a lot of negative situations to get imprinted into your mind you will start to act negative. That is part of the reason why it is said some people are accident prone or attract negative things towards them.

Your self image is therefore how you see yourself and is not necessarily the truth. It can therefore be changed. You act according to the image you have of yourself in your mind. If you change the self image of an individual you change his complete personality and actions because his personality is dependant on his self image.

If you are taking part in a sport and you think you have reached your limit in high jump or you think you cannot run faster no records will be broken. Luckily there are athletes with good self images who believe in themselves and always try to improve on their previous best and records are broken every year. I f they can, you can also do it.

This information brochure consisting of 10 parts is written to help you establish what it is that is keeping you from being successful. Identifying your fears, how to stick to a budget and how to live instead of just to exist.

How you can be happy and independent, pay of your debt, credit card, bond and live your dreams. You can work through this course and then stop dreaming and start living.

It does not matter if you are broke of just work a job (just over broke) you can be self sufficient and earn more money by being self-employed. In order to do this you must first of all be confident about yourself and have a good self-image.

If you want to work at home, become more wealthy or want to be financially independent and save some money you must take action and really change your life by going here 

Article Source: http://EzineArticles.com/?expert=Gerhard_Strydom

Viral Advertising on Steroids

The Viral Spiral : Version 2
100 percent FREE Viral Advertising System
This is a short but very powerful report on how to get the biggest amount of traffic to any type of website or blog that you want. It can be used by a total newbie or the most experienced Internet marketer alike. Everybody will be surprised by the results you can achieve by this system.

Would you like it to get 100,000 or maybe even 1,000,000 visitors to your website or affiliate programme per month?

Increase you sales with 4000 percent!

Would you be able to convert maybe, let’s say 10 percent of your daily visitors into paying customers? I am sure you would be able to convert some of them. Let’s see, 10 percent of 1,000,000 equals 100,000. Quite a nice amount of people to work with per month, don’t you think? Do you think you will get some clicks on your ads with that amount of visitors? I am sure you would.

Then why don’t you try this 100 percent FREE Viral marketing system?

What is the Viral Spiral system?
Will it require a lot of work – no, but initially you will be required to tell other people about it or else it will fail. (tip: distribute this report through butterfly marketing – just change the links below to your own, otherwise it will not work)

Do I need to sell anything – no, this system is totally free and is designed to get you traffic, traffic, traffic. (You can promote your own website or affiliate programme with the programme below)

It is a combination of Free Advertising methods, that, if applied correctly should give you a huge surge to your daily traffic. I am not talking of a wave or even a tidal wave but a tsunami of daily traffic to your site. The secret is that once you decide to participate in this free programme you must go 100 percent for it. At the beginning you will not see a huge difference in you traffic but once it has been set into motion you will not be able to stop it. The only way you would be able to stop this stampede will be to remove your website from the it’s server. Are you ready to start…

Go and tell you friends about it to get the system kickstarted and THEN you can sit back and watch the visitors stream to your website. Your hit counter will start spinning out of control . No SPAMMING please. We do not tolerate SPAM in any way whatsoever.

I have not hidden the links in any way in case they are not clickable in the PDF file…we all know how these things sometimes fail us when they are not supposed to. If the links are not clickable, copy and paste them or type them into your browser to get to the website. Change the links in this report to yours and distribute as far and as wide as you can – you will be surprised at the results you will achieve

Well folks that’s it, just a few minutes and you are on your way to the biggest wave of traffic you have ever seen – and it’s all viral and it is all 100 percent FREE!

JUST CLICK HERE

Basics of online selling

Those few letters in the subject title will guarantee you success in any venture you have whether it be blogging, selling, marketing (on-line and off-line).

They are the basics of anything that you do. Go to any good sales page of a product somebody is trying to sell and you will see those components in there.

They are the basics that a lot of people tend to forget sometimes.

If you want to see an example of a good sales page you can Click Here! to compare these componets against a good sales page and copy this in all your posts and products that you are trying to sell.

What do they stand for:

A - Attention (Get the readers' attention)

I - Interest (Create an interest in your product or post-you only have a few seconds before your client or reader loose interest and goes elsewhere)

R - Reason (Give him a reason to use you product or the info in you post)

A - Action - Get your reader to take action - he must either click on a link you give him or take out his card to buy, whatever you want him to do)

M - Measure (You must be able to measure the above actions - why do you think everybody talks about tracking links so much?)

Well, there you have it, short but to the point. The basics of selling.

Without the above you will not have success!

Comments on the above post will be appreciated.

List Building

Isn't it funny, you get so many methods and programmes on the net that tells you about all the wonderful ways on how you can make money and become an instant millionaire but very few people tell you that you need customers and a list to sell those programmes to.

Without customers who buy these products or join your programmes everything you do is worth a big fat ZERO.

Take a look here for something that you cannot do without. It also explains the "art" of list building and getting traffic.

I'd rush to get this now if I were you. Just CLICK HERE

Viral Contextual Advertising - for Free?

We all know what contextual advertising is. Google has given us one of the best methods to advertise our products by means of text ads. We all know how succesful Google Adwords is.

Have you ever wondered what it would be like if you could build a viral component into you text ads? In other words, build a network of people who helps you to do your work and spreads your ad toother people.

I have come upon this system whereby you have the possibility to advertise to a potential 1,398,100 leads and it is not a safelist system or any of the old howgwash that we have all seen a million times.

Your ads actually get read and what is even better is that you can build your own system of leads. You only get one email per week from one source (less spam). While you are building leads you are earning money as well.

To learn more about this incredible system click here if you are more interested in building leads or click here if you are more interested in making money and building an income.

This is by far the best sytem I have seen in a long time for building leads and earning an income at the same time

How to create profitable business ideas by Kenneth Koh from Leads Leap

If you want to become a member of Leads Leap, click here

October 24, 2008 By Kenneth Koh
I think it is “timely” that we talk about how to create profitable business ideas for your online business.
Why is it timely? Here’s why…
On Wednesday, I released our brand new List Builder Script, free for all LeadsLeap members. Shortly after the release, I received many emails from members asking what are the business ideas that can be used with the script.
Now, technically speaking, the script can be used for any niche and any business idea. The only problem is some business ideas may be more profitable than the others.
So in today’s blog, I’ll show you how to create profitable business ideas.
First, you have to decide which niche market to focus on and whether the niche is profitable.
If I were to start another online business tomorrow, I will have to make sure that……
1) The market has an ongoing supply of new products that I can promote.
2) People’s interest in that niche do not change too quickly. For example, I will not use the List Builder Script to build a business around “spyware removal” because once I provide them with the solution, they are not likely to want to hear from me again.
3) People in the niche are always craving for more information.
4) There are many affiliates in the niche that I can contact and JV with.
5) There are established websites where I can find lots of people interested in the niche. This is to ensure that I can easily find targeted traffic for my new business, through advertising or striking deals with the webmasters.
Examples of good niches are internet marketing, stock trading, forex trading, body building, holistic health and personal improvement.
If I found a niche that I see a potential in, I will ask myself 2 questions.
1) Can I find/create a useful product to giveaway?2) Can I find/create a high value product to sell?
1) Can I find/create a useful product to giveaway?
In some niches, you can find some PLR products that you can give away. This is by far the fastest way to kick start your online business.
Another way is to create your own product, which may not be difficult at all.
The trick is to create something that is useful to the people in the niche.
Here is one idea that I just think off my head.
For example, You can create an ebook called “Online Scam Report - A complete list of scam (or near scam) programs you should avoid before you become the next victim”. Just go to Google.com and search for “scam”. You will be able to find websites discussing about different scam programs. Your job is to compile those programs into a book or if you are lazy, get a freelancer to do it.
2) Can I find/create a high value product to sell?
This is an important part in making sure that your business idea is profitable.
A profitable business idea should be able to help you generate immediate profit so as to fund your future expansion and cover your advertising costs.
This can easily be done with the One-Time-Offer feature in the free LeadsLeap List Builder Script and a powerful strategy that I’m going to share with you now.
The idea is to create a high value product worth thousands of dollars, write a sales letter that looks as if you are going to sell it for $197, and offer it for $9. This idea has never failed to work!
If you are in the internet marketing niche, the easiest way is to compile a huge package of PLR and MRR products that worth thousands of dollars.
Alternatively, you can create a high value product on your own.
For example, I’ve seen people giving away 1 website template and offer 10 website templates for $5 as a one time offer. This is a good and profitable business idea because website templates have high perceived values. At a great offer of $5, you bet a lot of people will bite.
Creating profitable business ideas is not rocket science. Once you can identify a profitable niche, all you have to do is to think of something useful to giveaway for list building purpose and something of high value to sell it cheap for immediate profit. Together with other backend sales, it is almost guaranteed that you’ll have a profitable business in both the short run and long run.

To learn more, click here

# 1 Reason why most people fail online

Do you know what’s the #1 reason why most people fail to make money online?
The #1 reason is indecision!
They can’t decide if internet marketing is for them. They are getting mixed messages from everywhere, messages like:
“You can make a million trading the stock market.”
“You can achieve financial freedom with MLM.”
“No, I think I should be a REAL brick and mortar businessman. Internet marketing is not a career!”
One of the secrets of success is that when you make a decision, everything else will fall into places. It’s one of the secrets of the universe, as important as the law of attraction.

Do yo want to read more? Click here to get the full story