How companies of MLM works?

Question

- How does the money be shared across soo many downlines and yet the business can still profits?

- The economics of MLM model.

- What is their sustainability model (how they maintain their business without closing down)?

Answer 1

To gain an understanding of the economics of MLM/Network Marketing you must study the industry. Once you begin your studies you will find that most companies use the same business model characteristics to build their company. The companies and the top business builders make profits while very few in the downline can claim profits. There are far too many studies that show 95%-99.9% fail to make a profit. Even the top companies claim average income of participants under $2000 per year while most people spend far more then that to build business. There are many websites supporting facts on why this model promotes failure. Sites that are not selling you on their solution. Sites that are informational only. Many MLM'ers/Network Marketers call these critics "close minded" or failures of the "great MLM/Network marketing model." None of which can prove the claims to be false.

A great site to start studying the industry is http://www.vandruff.com/mlm.html