Multi Level Marketing
Multi level Marketing, or also called as MLM, is a system for selling goods or services through a network of distributors. It is also sometimes referred to as Network Marketing or Direct Sales.
MLM is a strategy that some direct sales companies use to encourage their existing distributors to recruit new people in the business as distributors also. It starts by paying the existing distributors a percentage of their recruits’ sales. The recruits are known as a distributor’s “downline.” All distributors also make money through direct sales of products to customers.
In multi level marketing, individuals sell products to the public — often by word of mouth and direct sales. Typically, distributors earn commissions, not only for their own sales but also for sales made by the people they recruit.
Is Multi Level Marketing Legal?
Multi level marketing is a legitimate business strategy. In the United States, it is legal. It is also regulated by the Federal Trade Commission (FTC). While in Canada MLMs are also legal as long as they do not conflict with the Competition Act.
Not all multi level marketing plans are legitimate. And they are not all created equal. If the money you make is based on your sales to the public, it may be a genuine multi level marketing plan. If the money you make is based on the number of people you recruit and your sales to them, it’s probably not legal. It could be a pyramid scheme. Pyramid schemes are illegal, and the vast majority of participants lose money.
By and large, multi level marketing companies are unregulated. The existing laws regarding MLM practices are vague or poorly defined. As such, prosecutions of MLM companies with offenses are long, difficult, and relatively rare. Bigger multi level marketing companies can easily afford powerful legal representation to ward off prosecutors.
How Does Multi Level Marketing Work?
The typical Multi level Marketing program works through recruitment. You are invited to become any of the following:
- consultant or
It could sometimes be through another distributor of the company’s products. And sometimes through a generally advertised meeting.
If you choose to become a distributor with the direct selling company, you’ll earn money from the sales of the MLM’s products. Another, through recruiting other distributors, as you receive a portion of the income these distributors generate. And when those distributors recruit distributors of their own, you’ll also earn money on the income they generate.
The distributors that you sign up with your multi level marketing plan and the ones they sign up in turn are called your downline. The distributor that originally recruited you and whoever is above him or her in the recruitment chain is called your upline. Usually, the distributor who recruits you will give you some help getting started, including training.
What Makes Multi level Marketing Trending?
Multi level Marketing is trending for almost decade now. The main reason is is that MLM programs operate on a “sky’s the limit” promise. And some comes with a nice bit of “easy money” thrown in. If you work hard, the MLM sales pitch says, there’s no limit to how much money you could earn. And through your downline, you will actually make money doing less.
The cherry on top is that multi-level marketing is usually very inexpensive to join. But compared to starting your own business or buying a franchise, becoming a distributor is much cheaper.
What to do if you want to enter multi level marketing?
If you’re considering buying into a multi level marketing plan, make sure to get the details.
Many companies that market their products through distributors sell quality items at competitive prices. But some offer goods that are overpriced. Some may have questionable merits or are downright unsafe to use.
First, know more about what will you be selling. Make a quick research if there are similar products on the market. Is the product priced reasonably? Is it safe? Can your distributor support the claims about the product’s performance? Make sure you get answers to these top questions.
Almost any product or service could be sold through multi level marketing. These may include health, beauty, and fitness products or services that aren’t available on groceries or department stores. Apply a healthy dose of skepticism before buying or selling their products. You could check with a health professional before using or selling them.
If you decide to buy into the program and promote the products, you must be sure your marketing materials are factual. Another, that there’s a solid evidence to back up the claims you make about the products. Before you repeat any claims the company has made, verify that there’s competent and reliable research to support them. That’s the standard the FTC uses when evaluating advertising claims.
1. Learn More About the Company
Find and study the company’s track record. Do an internet search with the name of the company and words like review, scam or complaint. Look through several pages of search results. You also may want to look for articles about the company in newspapers, magazines, or online. Search for answers about the following:
- How long has the company been in business?
- Does it have a positive reputation for customer satisfaction?
- What is the buzz about the company and its product on blogs and websites?
- Has the company been sued for deceptive business practices?
- Does your state Attorney General know about complaints regarding any company you’re considering?
2. Evaluate the Plan
Don’t instantly pay or sign a contract in an “opportunity meeting.” Take your time to think over your decision. Your investment requires real money. So don’t hurry into it without doing some research in the first place.
Ask your distributor for the terms and conditions of the plan including the following:
- The compensation structure
- your potential expenses
- support for claims about how much money you can make
- the name and contact information of someone at the company who can answer your questions
Get these information in black and white. Avoid any plan where the reward for recruiting new distributors is more than it is for selling products to the public. Presumably, that’s a time-tested and conventional tip-off to a pyramid scheme.
Keep in mind that when you recruit new distributors, you are responsible for the claims you make about how much money they can earn. Be honest, and be realistic. If your promises fall through, you could be held liable even if you are simply repeating claims you read in a company brochure or heard from another distributor.
If you don’t understand something, ask for more information until it is perfectly clear to you. Your distributor and other distributors should be willing to answer your questions. Remember that your distributors and others above your sponsor’s level will make money if you join the program. So take your time. Hold off pressure in joining. Be aware of shills. Don’t fall into fake references paid by the company or distributor to pretend they were earning big money through the plan.
3. Find out about refunds.
Get the company’s refund policy in writing. Make sure it includes information about returning any unused products, including restrictions and penalties. It may seem like you’re minimizing your risk if you can return products for a reimbursement. Be that as it may, policies vary on whether you’ll get a full refund and how long it may take. Many plans require you to buy training or marketing materials. Or some may require you to pay for seminars if you want to get product discounts or create your own network of distributors. Find out how much other distributors spent on training, marketing materials, and seminars when they joined the plan. And know whether the plan requires you to participate in periodic training. Also, know what happens if you opt out of the training.
4. Think about whether this kind of work suits your talents and goals.
Of course, nobody else knows you but you yourself. Ask yourself whether you would enjoy selling products to the public. Find out how many hours a week your distributor and others spent on the business when they joined. And know how much time they spend now. Remember that no matter how good the product and how solid the plan, you’ll need to invest sweat equity and money for your investment to pay off. Consider the other demands of the business. Consider for example, going to training, recruiting new distributors, managing paperwork, recording inventory, and shipping products.
5. Ask Questions
Ask your distributor and other distributors tough questions. Dig for details. Don’t think you’re becoming too nosy or invasive. Your only objective is to check out a potential business deal that will require your money and your time.
Their responses can help you detect false claims about the amount of money you may make and whether the business is a pyramid scheme. Here are some questions to ask before making any decisions:
- How long have you been in the business?
- What are your annual sales of the product?
- How much product did you sell to distributors?
- What percentage of your sales were made to distributors?
- What were your expenses last year, including money you spent on training and buying products?
- How much money did you make last year, that is, your income and bonuses, less your expenses?
- What percentage of the money you’ve made, income and bonuses less your expenses?
- How much time did you spend last year on the business?
- What percentage of income came from recruiting other distributors and selling them inventory or other items to get started?
- How many people have you recruited?
It’s important to get a complete picture of how the plan works. It’s not just how much money distributors make. Nevertheless, also know how much time and money they spend on the plan. At the same time, know how long it takes before they get to earn. Also get some knowledge on how big a downline is needed to make money.
One sign of a pyramid scheme is if distributors sell more product to other distributors than to the public. Another is if they make more money from recruiting than they do from selling.
6. Ask advice from an expert
Above all, the best step to take is to ask an expert. You will need someone who can contribute necessary information for you regarding the matter. Moreover, it is preferable if that someone who has proven himself or herself in the field. In fact it is also important that the expert can provide training in the long run.
Get The Best Help in Your Multi Level Marketing Startup
Get ready to reach the peak with Rick Billings. He can mentor and help you understand what multi level marketing is really all about. Rick will help you carry out your goals when growing your own business.
Learn how to recruit more people and make sales without having to pressure your loved ones. You will also learn how potential clients reach out to you instead of you reaching them. All things considered, the best thing is that Rick Billings will mentor you for free!
For more information on what is network marketing, feel free to contact us anytime!
To Your Success,
The Marketing MLM Online Team