MLM's or Multi Level Marketing is a viable business model for the everyday individual looking to make a little bit extra cash or build an organization for a residual income.

The structure is designed to create a marketing and sales force by compensating promoters of company products not only for sales they personally generate, but also for the sales of other promoters they introduce to the company, creating a downline of distributors and a hierarchy of multiple levels of compensation in the form of a pyramid.

The products and company are usually marketed directly to consumers and potential business partners by means of relationship referrals and word of mouth marketing.

MLM's or network marketing has received a bad name over time. Some of the Giants in this field are Amway, Avon, and Mary-Kay. There are a lot of others but those 3 are some of the oldest and are directly responsible for negative reputation MLM's have received over the years.

When Amway first got started back in the 70's, some of the distributors actually started to trick their prospects by inviting them to a "party." When the prospect would show up, they would be greeted and this "party" would suddenly turn into an opportunity meeting. Needless to say, this was not the most effective way to market they could have used.

This kind of marketing actually started to have a very negative affect on the people around them. People quit trusting them and soon their whole downline started to disintegrate very quickly.

One key fact that I believe has been overlooked in most MLM company's is before someone should be building any kind of organization, they should learn how to retail the product easily and effectively. This creates a customer base of individuals loyal to the product you are selling giving the distributor monthly retail commissions that could support their new business venture.

Once they have developed their customer base, they would then be able to start training other people how do create their business in the same form creating a downline. A customer base and a downline is what gives a distributor their residual income.

This is how I build my business. First retail to cover the overhead of the business. Then teach others. How simple could that be, but there are a lot of people out there promoting the latest and greatest with no idea how they are going to cover their overhead.

Don't get stuck with an opportunity with no way to cover the basic cost in business, overhead... What it costs someone to keep a business up and running. Ask questions and make sure it's a type of product that can be sold for a retail value and that the product is actually in demand and not a new line of products you have to convince people about.