MLM...Multi level marketing has been around there for last years to be considered a solution for the hecks of traditional marketing which is costly and complicated process for many businesses. Although it is easy and cost effective marketing strategy for many businesses but always has been at low level of return and sales. Many businesses think that creating a market for their product depends upon the people satisfaction and utility....which is really a troublesome job. So they thought of a marketing strategy which adds a business touch to the general utility or satisfaction of the customer. They offered the customer of the product to not only utilize their product but also gave him the opportunity of business to refer people and get their commissions down to several levels which is going to be a huge residual income in the long run.

The margin that retailers get on their products was thought to be distributed among the customers who bring more sales down to several levels.But this marketing strategy failed badly in the markets due to the following reasons:

Market Saturation:
Market saturation is the first concept that you will hit every time you talk about the failure of this policy. There is a market saturation for a product, when it is not needed any more by the people is what is called market saturation. The market is saturated with one specific product and that is not needed any more by the people, so MLM will not do any more.

Psyche of the public:
When people don't have any utility for a specific product, they need not be disturbed by offering them an earning opportunity in exchange for the product which they don't need. MLM is built for selling the product whether it is in utility or not, so when market saturates, the new incumbents are left with nothing.

Few benefit largely.... More are just fooled:
I already have talked about market saturation, so when market saturates, the product will not do any more.The few top upline people will garner all the wealth based on the efforts of their downlines, and the downliners will get either very less or not at all anything.

Top upliners lead...they are the company's own people.....so downliners are people in public, so they are just fooled to give an earning opportunity with the product they purchase.

I give you an example:
Suppose a company pays one dollar for every refferal or sale down to five levels. Person A registers and purchase the product, the business package or whatever you want to say it...He brings two people to purchase the same product. He gets $2. They in turn bring two people each.The top upliner gets $6 and his downliners gets $2 each.Continuing in this manner it reaches down to five levels after which the market saturates and the product is no more utilized or needed by people. The people in the level five are the greatest majority of the product , so they get nothing. The people in the level four also forms the second greatest majority level, who gets two dollar each if it is deemed that every one of them referred two people. The third level contains the third majority who gets only $4 and so on. So who made the great bucks? Person A and his second downliners and no one else. This is the fact of MLM.....Multi level marketing......Happy MLM to all you who are currently in it including me.