Posts Tagged ‘multi level marketing mlm

25
Jul
12

Multi Level Marketing Conspiracies Unleashed

Are Multi Level Marketing “MLM” business opportunities a pyramid scheme or a legitimate way to earn stratospheric income.  Everyone pursuing a home based business on the internet or through classified ads has seen the outrageous claims of instant riches with little or no effort.

Not too long ago MLM was a legitimate business which provided a way for companies to get their products to customers in small towns and rural areas which had no access to their goods. The MLM structure gave flexibility to distributors with little or no paid advertising.  Companies such as Amway and Herbalife utilized recruits to sell to friends, family members, coworkers and anyone else they could find to buy the product.  Inherent with this system is the need to gather a large group of recruits or a “downline” to purchase the goods and continue to this process.  This is where the pyramid aspect of MLM originated.

Who Profits?

As in most bottom heavy organizations only the top 2-3% are going to profit.  The drop out rate is astronomical.  Over 90% of recruits quit within the first 30 days.  For MLM programs or recruiters to be successful in today’s market they must constantly recruit.  Recruits will buy the product with hopes of realizing incredible gains only to end up filling up their garage with product they cannot move.

One weapon that has increased the ability to add recruits is the power of the Internet.  After recruits have exhausted or alienated their circle of close friends and acquaintances, they need to find more bodies.  All MLM programs provide recruits the ability to buy leads.  However, most people dislike calling prospects and soon lose more money on this process.  The next frontier for distributors is to mine for prospects by advertising on the Internet.  While this is a viable alternative to offline advertising, there is a great potential to lose more and more money without the proper training.

What is the answer?

As in any venture one must do their due diligence and thoroughly research the MLM opportunity.  There are many legitimate MLM companies that have built great publically traded companies that provide employment opportunities and income for many people.  However, ask yourself, why should I have to purchase then resell this Product?  If you are advertising and selling the product shouldn’t a legitimate company facilitate this for you?  Yes they should and it’s called “Direct Sales”.  In a legitimate Multi Level Marketing organization, commissions are earned on sales of services or products not from recruiting associates.

In the end it all comes down to finding the right opportunity.  Fraudulent MLM companies will require exorbitant start up fees and require the recruit to buy expensive amounts of product.  Seek transparency and filter out the losers. Do your homework, find your comfort level for losses in the beginning and be prepared for the long haul.  Anything that promises instant riches and very little work is looking to profit from a weak and unknowledgeable prospect.

Chris Benoit

www.WorkWithChrisBenoit.com

18
Feb
11

Legitimate MLM Alternatives

If you are searching for a home based business, where do you begin?  There are several factors when considering an alternative to a typical 9-5 job.  There are many different business models to consider and I want to touch upon two.  Multi-Level Marketing “MLM” and Affiliate Marketing.

Like any business venture seeing great results is dependent upon selecting the right business model and effectively applying yourself to maximize your efforts.  Network marketing is a tough environment to succeed in.  On average only 3% of business owners find long lasting success.  This fact should not deter you, it should make you prove the statistics wrong.  Literally, business owners and salespeople can determine their salary through persistence and perseverance.  Having a company determine your pay and giving little to reward you for your success is not a way to financial independence.

Multi-Level Marketing

Wikipedia definition: “Multi-level marketing (MLM) is a marketing strategy 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.”  Essentially independent contractors or distributors will sign on with a company to represent and sell their product.  The premise is to recruit others to join them in this process thus creating a downline of individuals to sell and distribute the product.  Each independent contractor or salesperson is responsible for advertising and creates income through commissions from product sales and commissions generated from sales of their downline.

There are many well known MLM franchises; Amway and Herbalife just to name a few.  Traditional methods of marketing for these firms are selling to your “warm market” i.e. family, friends and co-workers or simply throwing sales parties etc.  More modern techniques are being utilized with advertising on the Internet and through social media like Facebook and Twitter.

MLM is a viable alternative for an online home business.  As mentioned above, do your due diligence and find a transparent opportunity that you understand.  As in any sales industry there are unscrupulous companies looking to recruit salespeople instead of selling the actual product.  This can lead to recruits being saddled with product they cannot sell and just lining the pockets of their recruiters.

Affiliate Marketing

Wikipedia definition: “Affiliate marketing is a marketing practice in which a business rewards one or more affiliates for each visitor or customer brought about by the affiliate’s own marketing efforts.”  Essentially the independent contractor or salesperson earns a commission on selling or marketing someone else’s product.  The main difference between MLM and Affiliate Marketing is compensation.  MLM’s main source of income lies in creating a profitable downline for selling a product whereas Affiliate Marketing or direct sales pays a substantial amount of compensation through monthly commissions.  It is true that substantial income does exist from team members or downline with Affiliate marketing, but it does not completely determine overall success.

In summation, just trust your gut and do your research.  Marketing with an MLM or Direct Sales company is very popular today with the choices available on the Internet.  If you truly desire to change your life and income than be persistent and do not let minor setbacks derail your dream. If you want to be successful, then you must find the right opportunity and establish yourself as a leader and learn everything you can to be seen as an expert in your field.

Chris Benoit

http://www.WorkWithChrisBenoit.com