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Essay / Research Paper Abstract
A 12 page paper. Called a scam by some and the 'future of marketing' by others, multilevel marketing (MLM) most likely lies somewhere in between. Of course, there are MLM scams that are nothing more than thinly disguised pyramid schemes, but there are also many reputable MLM companies, such as Mary Kay Cosmetics. Conceiving of a world in which MLM supplants traditional retail efforts is difficult, but MLM remains an alternative channel of distribution to meet the needs of the consumer. MLM appears to be a permanent alternative, but not one that will overtake the corner grocery. Bibliography lists 11 sources.
Page Count:
12 pages (~225 words per page)
File: D0_MLM.doc
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Unformatted sample text from the term paper:
Up To $100,000 Per Month" (Eisenberg, 1987; p. 136). Today, network, or multilevel marketing (MLM) ads are not quite as blatant as they were ten years ago, but many
of them still promise a future along the lines of "make $40,000 in ten minutes." There has been confusion in recent years surrounding the terms of direct sales and network
marketing. Direct sales has been around for years, with several old and reputable companies (i.e., Tupperware, Amway, Mary Kay Cosmetics) making direct sales their only means of distribution.
There have been several individuals who have made and are making respectable incomes by means of direct sales. Some companies, however, saw opportunity for get rich quick schemes by
selling others variations of those get rich quick schemes and damaged the image of much of the direct sales industry. How it Works Amway was one of the first
direct sales companies organized in a manner similar to many of todays MLM businesses. Founded in 1959, Amway is a privately held business based in Ada, Michigan. Much
of Amways product manufacturing is done at the Ada site, after which they are shipped to regional distribution centers. Overseas, there are more than 150 such distribution centers (Ettorre,
1995). With more than 12,500 direct employees, Amway also claims to have more than 2 million independent distributors globally. They engage in multilevel marketing: Distributors
sell directly to customers and make their money from the markup (typically 25 percent to 30 percent) on products and services they sell, They also earn money from a performance
incentive-- ranging from 3 percent to 25 percent--based on a percentage that increases as monthly sales volume increases. An active distributor who sponsors someone into the Amway business can
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