- MLM or Network Marketing: Worth It, or Too Good to Be True?
- Is MLM a Bad Word?
MLM or Network Marketing: Worth It, or Too Good to Be True?
6 Questions to Check Out an MLM/Network Marketing Opportunity
“Make Money 24 Hours a Day”
The headlines are certainly enticing, especially in today’s troubled economic climate. The idea of making money right away without any special skills or major investment appeals to the immediate need, while the promise of residual income appeals to the desire to not end up in your current financial position ever again. And some highly reputable companies have been built on this marketing & distribution structure…
Avon, Mary Kay, Excel Communications, and more. But then there’s the downside… “Do I really want to pitch this to all my friends?” “Can I actually make money at it?” “How do I know it’s not a scam?”
If you’re considering an MLM, CDM, or network marketing opportunity, ask these six questions to determine whether a network, multi-level, or consumer direct marketing is worth your while (and your money).
Who is your upline?
Take it all the way to the top. What do you know about the person who introduced you to the opportunity? Can you trust what they tell you? Are they willing to divulge exactly how much they’ve been making? And what about the founders of the company (assuming it’s a newer company)? Have they been successful and reputable in their previous businesses? Investigate your entire upline just like you would a business partner you’d never met before.
What is the product?
Is it something that would sell well in a retail store or via other traditional marketing and distribution channels?
When will you start actually making money?
Don’t fall for the line that it takes months or even years to show a profit.
You should be able to recoup any investment and start earning income within just a few weeks if there’s really demand for the product. Making a living at it is another story. You need to be able to work it part-time in addition to other steadier income sources. Will you realistically be able to do that with this company?
Where is the product being promoted and where can you promote it?
Is the company doing advertising and publicity of its own to help create demand for the product? And what restrictions are there on where and how you can promote it (advertising, websites, etc.). There’s not a right or wrong answer to that question – a wide open policy is more flexible for you, but for everyone else, too. If you’re prepared to be highly competitive, that’s fine, but if not, you may prefer to work with a company whose policy is more restrictive.
How were you recruited?
Were you recruited primarily as a customer, with just a mention of “income opportunity”, or was the primary pitch about the business opportunity? The ethical way to build a downline is to sign people up as customers first, and then if they like the product, they’ll be drawn to become a rep. A hard-sell on signing up as a rep right at the outset should send up a red flag for you.
Why are you doing this?
This is perhaps the most important question of all. If you’re doing it because you think it’s going to help you out of a cash crunch, forget it. If you’re doing it because you think you’re going to be rich in a year, well, it’s fine to have a vision but don’t bank on it. On the other hand, if you really believe in the product, that gives you the best likelihood of success with it.
There are no absolute right and wrong answers to these questions. The point is to make sure that you’re going into it with your eyes wide open. Many people have made a lot of money in network marketing, MLM, and consumer direct marketing, but many more have ended up wasting a whole lot of time and money chasing a pipe dream.
Ever been confused about how a “home business” works? Of course you have, many of us have. Most people have heard the term MLM (Multi-Level Marketing) and usually at the end of that the word, “scheme” is added – giving the whole business model a bad name. Well…let’s change your negative perception and tell you how your Great Aunt Joan, actually earned that pink Cadillac from Mary Kay ! It’s brilliant really…
Not only are “home businesses” or “MLM’s” very interesting,
They are successful.
Many of the longest standing organizations in this country have this business model. MLM is a marketing strategy in which the sales force is compensated not only for sales they personally generate, but also for the sales of others they recruit, creating a downline of distributors and a hierarchy of multiple levels of compensation. Most commonly, the salespeople are expected to sell products directly to consumers by means of relationship referrals and word of mouth marketing. Sounds legit right – so why the bad press?
MLM Target of Lawsuites
Well MLM companies have been a frequent subject of criticism as well as the target of lawsuits. Criticism has focused on their similarity to illegal pyramid schemes (hence the “scheme” reference), price-fixing of products, high initial start-up costs, emphasis on recruitment of lower-tiered salespeople over actual sales, encouraging if not requiring salespeople to purchase and use the company’s products, potential exploitation of personal relationships which are used as new sales and recruiting targets, complex and sometimes exaggerated compensation schemes, and cult-like techniques which some groups use to enhance their members’ enthusiasm and devotion. Eesh!
However, as aforementioned, you may know people that sell products from Mary Kay, Avon, Advocare, Tupperware and the like (see more companies in our Featured Home Businesses section). You know people who sell these types of products because they believe in the products and the companies that stand behind them. These companies empower those who sell their products to actually establish their own businesses, selling the products. This is very attractive to many entrepreneurial-minded people who do not want to have a boss watching over them but also want some pre-established structure and support. Most MLM organizations provide a very robust infrastructure and great training as well as impeccable rewards (hello free cars and trips!).
Passion For Business and Teamwork
I recently spoke with San Diego based, Vicki Martin, about her experience with Rodan + Fields. Here’s her take on her home business and why the opportunity was so appealing for her and her family, “The decision to join Rodan + Fields Dermatologists came easily. Since 2008 the construction industry [which I was previously in] has been hit hard by our economic downturn and my income has been greatly affected. We were working harder for less like many of our friends. Being part of Rodan + Fields Dermatologists is allowing me to work with highly educated people who share a passion for business and for teamwork. Building a recurring, residual income that grows month over month is going to give my husband and I the peace of mind and financial freedom that is so vitally important to our future. My skin looks better than ever. And, I get to work my job around the rest of my life instead of the other way around.”
So, the next time you meet someone who runs a “home business” or “MLM” give them a high five for taking their career and life into their own hands and becoming an entrepreneur.
Thanks TheBalance, Forbes and for reading MultiLevel Marketing MLM