Multilevel Marketing - Benefits & Drawbacks
If you’ve ever dreamed of running your own business from home,
whether on a full or part-time basis...and are good with people
but have very little business knowledge, then Multilevel
Marketing (MLM) may be for you. This is especially true if you
have a minimal amount of start-up cash.
MLM companies provide a product or service to the consumer via a
network of “independent” distributors, who usually work from
their home.
Reputable MLM companies also provide a low start-up cost, all the
training you need, advertising in one form or another, and supply
you with a product line-up or service to sell. They also allow
you to recruit other distributors and make commissions on their
total sales.
The United States Federal Trade Commission, however, cautions
anyone from joining a MLM company that pays you for each
distributor you recruit, as opposed to only paying a commission
on the total sales they generate. This is called ‘Pyramiding’ and
is illegal.
The U.S. FTC also encourages you to thoroughly research a MLM
company before signing on the dotted line, and not to sign
anything under pressure, but instead, take time to consider all
the details. You can check out their Multilevel Marketing Caution
Web Page at:
http://www.ftc.gov/bcp/conline/pubs/alerts/pyrdalrt.htm. On this
page, they also list seven checks you should do before making
your decision whether to join or not.
Research is always an important component of any business venture
and considering a distributorship with a MLM company is no
exception.
Searching the Internet under “Multilevel Marketing” returns a
recipe of results. These range from government agencies, general
information web sites, encyclopedia type sites to a host of
disgruntled, former MLM distributors. People who are “pro” MLM
don’t write web sites on the topic because they’re usually too
busy building their network.
THE GOOD SIDE
Here are some of the benefits of finding a reputable MLM company:
- They have an established and very marketable product line or
service, and strive to improve or add to the existing line-up.
- Recruiting new distributors will be a streamlined process, and
the company will not be involved in Pyramiding.
- As a company, they will have a solid track record and good work
ethics.
- No experience will be required. A good MLM company will provide
one-on-one training, as well as motivational seminars and a full
compliment of training materials. After all, in Multilevel
marketing, when one succeeds all succeed.
- A reputable MLM company will be “Family” rated, meaning that
crude conduct is not tolerated.
- They will provide an excellent bonus plan with many incentives
for those who excel.
- Well-established MLM companies should be able to provide you
with resource material to aid you in not only product sales but
in recruiting.
- They will have minimal start-up fees.
- A strong support system.
- You will be led by example.
- Healthy team competition.
- There will be a successful business and marketing plan in place
that can be successfully duplicated by others, assuming they
apply themselves to the plan and are motivated to succeed.
- There exists the possibility of full-time or part-time
commitment.
These attributes would definitely belong to an ideal Multilevel
Marketing Company, however not all reputable companies excel in
all these areas. Some companies will be better in certain areas
than others. Do research on the company. Don’t just accept the
motivational hype used by most MLM companies in order to recruit.
Some MLM distributors are so highly trained that they have a
“come-back” for almost every statement you make or concern you
have. This would be considered a ‘high-pressure’ invitation to
join. Always take time away to cool off – especially if you’re
excited by what you heard. Sit on your decision for a while and
do research. If the company is good, they will still be there
when you wake up tomorrow; and yes, you will get a follow-up
phone call.
THE DOWNSIDE
While the MLM model can be a great tool to achieve what you want
in life, it would be remiss not to mention the downside.
- It is easy to get ‘taken’ by a disreputable MLM company. Do
your research.
- If you plan on developing a network – a “downline” – it will
cost you more money than you realize and take you longer than you
think – although this is slight compared to the cost and time
required to start up a traditional business. You will spend a lot
on resource and training materials that you will end up giving
away to prospects and to your downline distributors.
- You might spend a lot of money on fuel for your vehicle, meals
out, hotel rooms or neck surgery from sleeping in your car.
- Some companies insist on a minimum monthly order to maintain
your distributorship.
- Some companies only pay you for recruiting other distributors
and not on their total sales volume. Beware, as this is called
‘Pyramiding’ and is illegal in most countries.
- While you may initially be led to believe that the products
sell themselves and that you can make a lot of money with little
effort, beware. Most businesses, whether they are traditional,
online, or MLM, take a lot of energy and effort to make them
successful. Consider a rocket: 60 – 80% of the fuel is used just
to raise it a few inches off the ground.
- Be ready for a lot of rejection. Approximately 80%+ of the
people you contact will turn you down.
- It is easy to get caught up in the ‘dream’ and overspend
because, “Winners always find a way.” It is also easy to be
pressured into ‘willingly’ spending beyond your means.
- It could very easily become your life’s vocation, with
everything centered on it. Some distributors even refuse to
attend family weddings etc., because it falls on the same date as
their MLM seminar.
- Also, like most businesses, when you begin you will be spending
much more than you make.
The final judgment: Most business entrepreneurs face the
question, “How much am I able and willing to lose if it doesn’t
work?” That is the question you have to ask yourself before you
get into Multilevel Marketing.
And of course, what do you want from life and what are you
willing to do to get it?
If you enjoy helping others succeed so that you can succeed, are
willing to take the risks associated with being in business for
yourself, even on a part-time basis, and are willing to put in
long days, then Multilevel Marketing may just be the tool you are
looking for to achieve your business and life goals.
Here’s to success!
Author
George Whitecraft
http://whitecraftshoppingmarketing.biz/info/l/tbp
http://whitecraftshoppingmarketing.biz/info/l/pba
posted by George @ 11:43 PM
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