MLM (Multi-Level Marketing) is based on the concept of distributing the process of selling onto independent businesspersons. Honest MLMs give everyone (and anyone) the opportunity to start and grow their own business. Consider that the MLM concept can be applied to selling every good and/or service, and that every person is a potential future representative. One can say that everything has the potential to become a MLM opportunity.
Think about where you work. Isn't it true that the boss (or company) is raking in the big bucks out of the money YOU are making for the company? Maybe you aren't in sales. You still contribute something of value to the company. If you didn't, they wouldn't pay you! Your paycheck is a reflection of that value. Whether you work in sales, for a nonprofit, or in the service industry, somebody somewhere is making money and you are contributing to that effort. If they weren't making money, the company would collapse.
There are many good examples of traditional businesses that function very much like a MLM. Examples include the Insurance business, the Yellow pages guys, your local Auto Dealers, etc. Look at a sales force. The salesman makes a commission of 12%. That's all he makes unless he makes his quota or sale goals and then he may get a bonus. The sales managers for these companies may have 10 salespeople to train, keep track of, and motivate. As reward for this extra work, he makes 3% of everything that each salesman makes plus commissions and bonuses for his own effort. He may make an additional bonus for all of his salesmen making their sale goals. And the owner of the company makes money on everyone!
Gee, that would mean Honest MLM is everywhere we just do not see it like a MLM company.
An Honest MLM versus a Pyramid Scheme?
Pyramid schemes are illegal scams involve a large number of people at the bottom of the pyramid, all of them paying money to a few people at the top. Each new participant pays for the chance to advance to the top and profit from cash paid by others who join down the line. You receive no products or services for your participation. Pyramids resemble a legal honest MLM in structure, but there is an important difference. Pyramid schemes seek to make money from you, while multi-level marketing seeks to make money with you by offering top quality products and/or services. Pyramid schemes are much like chain letters; they require mathematical gymnastics that cannot possibly work. Pyramids always collapse in the end, and only a very few (usually the con artists themselves) make any money on them at all.
Many people associate the MLM technique with pyramidal schemes. An MLM does not work this way. You must do work to earn money-it is as simple as that. The main objective of an MLM is to enlarge the area of distribution for different goods by involving as many people as possible, either as customers or as possible representatives. Each company representative earns their money through honest work. They may receive commissions for selling and may also receive a bonus for offering the business opportunity to others.
Anyone who works a conventional job is in a pyramid scheme. Every company, army, and government in the world is built on the pyramid concept. However, with multilevel marketing, you aren't held back by the people above you like you are in a conventional job.
With an MLM, you can build your business as large and as profitable as you want and you do not need to be at the top. In fact, with many MLMs, you can surpass the earnings of the person that introduced you to the business.
How Can You Tell if an MLM is a Good and Honest Company?
MLM opportunities are all around us, but only a few of them are turned into profitable businesses. Be sure to make the most out of every honest MLM opportunity.
The Direct Selling Education Foundation suggests that, before you sign up with a company, you ask yourself these three questions:
1) How much am I required to pay to become a distributor? An honest MLM company will generally charge a small start- up fee. Pyramid schemes make most of their money from signing up new distributors, so their start-up charges are often very high. These start-up fees may be called many things and you may be told they are required or are recommended purchases for training, computer services and product inventory.
2) Will the company buy back unsold inventory? Honest companies will usually buy back any products that you fail to sell. Bogus companies will stick you with the inventory.
3) Are the company's products sold to customers? Pyramid schemes gain nothing by actually selling a product and often don't sell anything at all. They focus only on gaining new investors. Be wary if you must start by buying a large amount of product. Also, take a good look at the product itself. Multi-level marketing depends on quality products that are well-priced; pyramid schemes do not.
As with any other investment, before you commit ask questions about the company, its leadership, its ethics and its earnings. Take your time and investigate any information you're given. Talk to other people who have joined and research the company. Don't act hastily!
author: Robin Rushlo
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