Multi level marketing (MLM) is also known as “network marketing”. It’s a way for a company to sell goods or services through distributors. The company itself has no marketing costs, because that’s done by the distributors, who receive a commission on their sales. The advantages of MLM are:
- · It can be done from home
- · You can set your own hours
- · Your income can increase based on your own efforts
- · You are provided with products by an established company
If you choose to market products using this method, you will be referred to as an “independent distributor” or “independent business owner.” You would not receive a salary; your pay would be based on commission.
The parent company will encourage you to build and manage your own sales force by recruiting, motivating, supplying and training others to sell the products. This can result in additional income based on a percentage of the sales of your recruits. But it’s not just about making money off other people. When you sponsor someone, you are making a commitment to teach them what you know.
Typically, some financial investment is required up front for the purchase of a "start up" kit. The amount can vary and will depend on whether you want to work part time or full time. Do you just want to sell products, or do you want to start your own full scale business?
Although it is possible to build a successful multilevel business with comparatively little start up capital, remember that this is not a get rich quick scheme. Successful distributors who recruit and train a large number of sellers also have to assume ongoing wholesaling and managing responsibilities as well maintaining and serving their own retail customers. Managing such a large operation can be very profitable, but requires hard work, perseverance and discipline and will be a full time job.
There is a difference between MLM and "PYRAMID" schemes. A pyramid is built from the top down, and those who came in at the beginning always make the most. The price of the products gets higher and higher as you move down the pyramid, so those at the bottom make very little money.
In order for everyone in a "PYRAMID" scheme to profit, there would have to be a never-ending supply of potential and willing participants. Obviously this is not possible, and when the supply runs out, the "PYRAMID" collapses and most participants lose their investment.
The really sad part of "PYRAMID" schemes is that they usually target and exploit people who can least afford it, people with limited means and business knowledge. Thousands of unsuspecting and trusting investors have lost millions of dollars in "PYRAMID" schemes. Many people, especially retirees, have been scammed out of their life savings.
Bear in mind that "PYRAMID" schemes are illegal throughout the United States. Please be wary when the "start up" cost is substantial. Legitimate Multi level Marketing companies usually require a small "start up" cost, whereas "PYRAMID" schemes pressure you to pay a large amount to become a distributor.
On the other hand, in MLM, everyone starts at the bottom and has the opportunity to move up through hard work. In a good MLM company, teams work together, and new members receive thorough training from those who are successful.
Multi Level Marketing is very attractive because it sells hope, by promising that wealth and financial freedom can be easily attained by working from home. Although MLM can be a powerful and effective marketing system, for every one successful distributor, there are a large number who do not succeed.
How do you find a good MLM company? Some Multi Level Marketing Companies are household names and have been in business for a many years. Before making an investment you are urged to check out the company with your local Better Business Bureau (BBB) for a reliability report. Choosing the right company can make all the difference in your potential for success.
If you want to join a network marketing opportunity, take time to research the company and check to see if it belongs to the Direct Selling Association,a group that holds companies to strict standards of operation.
