Anyone who’s considered a home-based business has probably come across multi level marketing or MLM. Also known as network marketing, MLM offers people a commission not only for products they sell, but also for those sold by those they recruit into the program. Multi level marketing started in the U.S. around the 1940’s, and has since gained a mixed reputation as either a lucrative business or a high-profile scam.
Much has been said about the risks of multi level marketing, especially in the news. But while there are some bad apples out there, most MLM opportunities are NOT scams. Read on for a quick guide to the multi level marketing business and how to play it safe and achieve the success you’re looking for with the right company and the right sponsor.
How it works
To get started in multi level marketing, one first has to invest in the products or the supplies needed to sell them. Often, these are health supplements or weight loss products. For every bottle you sell, you get a commission, and so does the person who referred you. Likewise, when you refer a person, you get a commission every time they sell something.
This means that to make the most of multi level marketing, you don’t just have to sell-you also have to get as many people as you can to join in. In fact, many say that this business model places more importance on recruiting than selling. If you get enough people to join, you can make more money from their sales than your own.
Pros and cons
Many people who get into MLM are drawn to the prospect of fast money. Indeed, once you reach a certain number of recruits, assuming they all sell successfully, your commissions can add up effortlessly. Most MLM programs also offer bonuses to those who do well. It also doesn’t require any training or experience, as the products are ready-made and all you have to do is make the initial investment.
The biggest risk to multi level marketing is getting recruited by a scam company. These companies may require people to make a large initial purchase for products that won’t sell, or offer ridiculously small commissions. Even with a reputable firm, however, there are certain downsides: you may need to spend a lot on transport and meals and have trouble making sufficient sales and referrals. Studies show that rejection rates in MLM sales are around 75 to 80 percent, so one must also be ready to face failure.
However, with the proper training and mentoring and correct activities under the guidance of a Network Marketing Professional, your potential for achieving success in MLM is greatly enhanced…just remember if you apply NO WORK EFFORT you will have NO RESULTS.
Things to remember
When properly planned and well researched, multi level marketing can be profitable, often times even enough to earn a full-time living. It’s just about taking the right precautions. The U.S. Federal Trade Commission (FTC) advises people to do their homework, get to know a company, and weigh the financial pros and cons before joining an MLM program. Check the Better Business Bureau website to see if a multi level marketing firm is on the right list before signing up.
Like any business venture or investment, you should do your due diligence and make sure that the person introducing or sponsoring you into that particular MLM company has the correct integrity, posture, respect of their peers and can be a guide and coach to you during your MLM journey to financial success and freedom!
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