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Expansion: Five Paths to Business Opportunity

5. Multi-level marketing

Multi-level marketing involves the recruitment of distributors who sell directly to retail customers and also recruit other distributors. They are compensated through percentage commissions for the products they sell, as well as the sales made by the distributors they recruit. Usually this percentage varies according to the number of recruits a distributor adds to the network.

The advantages of expanding your business through multi-level marketing include:

• This method is very effective for companies that wish to focus predominately on sales and marketing.
• The company can expand quickly into new territories.

The investor joining a multi-level marketing company assumes financial risk for establishing the new offices.

The disadvantages of this method include:

• Complying with state laws and regulations can be difficult and costly.
• The company has little or no control over the commitment of each member, which forces them to continually recruit new people to replace those who leave.

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