How to Start an MLM Company

Marketing Strategy and related words on chalkboard.
Marketing Strategy and related words on chalkboard. (Image: IJdema/iStock/Getty Images)

Starting an MLM (multi-level marketing) or network marketing company can be a highly profitable venture because of the potential residual income. The founder sits at the top of the organization, earning a percentage off everyone's sales. Those who start their own MLM businesses can sell anything from vitamins to Internet marketing tools like auto responders or email lists.

Things You'll Need

  • Business opportunity magazines
  • Wholesale supplier
  • DBA registration
  • Vendor's license
  • Website
  • Digital camera
  • Fliers
  • Catalogs
  • Price lists
  • Distributor's packet

Tips & Warnings

  • If you want to be successful in your MLM venture, you will need to get some experience closing sales over the phone. There are many tapes and instruction materials online. You can also take a telemarketing job for awhile and get experience. Finally, the matrix payment plan is one of the most common and effective payment plan for MLM businesses. A matrix payment plan limits the number of distributors that fall under each of your levels as a sponsor. For example a 2x2 matrix allows two people on level one and four on level two (two under each distributor). The rest of the people who join the business under you would fall into level three, four or further down, which can help your downline members earn more money. If you use a matrix payment structure, pay 10 to 15 percent on level one, three to five percent on level two, and one percent on the other levels.

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