How do distributors earn income?
Distributors working for MLM companies earn income slightly differently than a typical employee. Here are two basic ways that distributors earn income in MLM:
1. Retailing – They buy products from their companies at wholesale prices, sell them at retail prices, and keep the difference. Or, they simply take orders and receive commissions. This is basically the same compensation offered by conventional marketing companies, except that independent distributors for network marketing companies are not merely employees. Instead, they are their own bosses – the owners of their own business.
2. Sponsoring – For sharing the marketing opportunity with others, distributors build their own sales organizations and receive bonuses or override commissions on the sales of the distributors in their organizations. Network marketers can multiply their earning potential by creating their own sales forces and helping the distributors within their networks do the same.
What’s the Difference Between Sponsoring and Recruiting? Watch this video to learn more.
Learn more about how compensation plans operate at mlmlegal.com.