MLM stand for Multi Level Marketing means marketing or sales of goods directly to the end user consumer using word of mouth publicity, display and/or demonstrations of the goods/products, and/or distribution of pamphlets. Companies can open pick up points and delivery points for maintaining effective delivery system. It is a strategy for direct sales business while encouraging existing distributors to recruit new distributors by paying the existing distributors a percentage of their recruits sales force by recruiting, motivating, supplying, and training others to sell the products or services. The recruits are known as a distributor's "downline". All distributors also make money through direct sales of products to customers. This is the best marketing way in which the sales force is compensated not only for sales they personally generate, but also for the sales of the other salespeople that they recruit.
Their are few steps which is very important to start the business and you must follow -
First : It is recommend you to setup a Private Limited or Limited Company for Multi Level Marketing (MLM) business in India which required minimum two directors who are setting up a Multi Level Marketing Company Business.
Second : Apply for IDSA (Indian Direct Selling Association) Membership. It's not a government body but it's a private body setup by well reputed organisation of India who is trying to govern the whole Direct Selling Companies in India with their problem and to stop unethical and illegal MLM companies and Multi Level Network marketing Business practice to operate and destroy the MLM Business route.
Third : Apply for VAT / Service Tax / TAN No. and all necessary license and registration required for manufacture and selling your product.
Forth : Appoint a Legal Advisor and a Chartered Account to create rules and regulation forms, printing materials, other company related legal documents and stationary materials. Please does not cut copy paste other company's print materials as it may not be applied on your product or MLM Business modal?
Fifth : There are various kinds of MLM plans some of popular MLM plans are Binary Plan, Matrix Plan, Uni-Level Plan, Board Plan, Generation Plan, Australian Binary Plan/Tri Binary Plan etc. After finalizing the plan you must discussing with your Chartered Accountant for certification and other formalities to establish a MLM business Company. Create a commission structure (also called pay plan, incentives, or rebates)
Sixth : When you complete the entire formalities one most important task is to develop fully featured, secure and reliable MLM Software with advanced tools. It is also advisable to develop exclusive website content and information related to company written by legal advisor of the company to counter legal laws of the Land.
Seventh : Hold periodic events that get people excited and recommitted to the MLM. Since almost everyone fails, this could begin to be somewhat of a downer. These events are needed to parade around those few success stories and to pump everyone up about the company.