Hi, everybody Dale here and today’s topic is about MLM companies. I am writing this post for all the people who have heard the term MLM but don’t understand what it means. In the following paragraphs, I hope to explain it in more detail so you will understand what it means and how you can earn money with this type of business model.
What Is A MLM Company
MLM stands for Multi-Level Marketing and here are a few other names associated with MLM. Network Marketing, Direct Sales Marketing, Referral Marketing, and Pyramid Selling not to be confused with a Pyramid Scheme.
Did you know one of the first companies founded in the United States was back in 1886 and is still going strong today? The name of the company is Avon for those of you who wish to know. Not all MLM companies survive, but neither does a lot of other types of businesses.
Multi-Level Marketing (MLM) companies operate by having a product or service they wish to get into the market place but instead of hiring a bunch of employees they pay a salary too or spend millions of dollars on advertising they offer what is either called associates or distributors a home based business and pay people like you and me commissions for product sales and sending them customers.
Some MLM companies are free to join and others you have to pay a fee to be a member. With some companies, you have to purchase what is called a getting started package which usually has three different price points and then you have to buy products each month to resale.
Other MLM companies will give you a replicated website with their products or services that you send people to so they can purchase the products without you having to buy and resale them yourself.
Bottom line is if you are thinking about joining an MLM company I suggest you do some research about the company and find out all the ends and outs before you sign-up. It is estimated there are over a thousand companies in the U.S. alone who use the MLM business model.
Here is a list of a few MLM companies you might recognize.
- Forever Living Products
- Mary Kay
- Young Living
- Nu Skin Enterprises
- Nature’s Sunshine Products
- Telecom Plus
Is A MLM Company The Same Thing As A Pyramid Scheme
As I mentioned up above pyramid selling (MLM) is not the same thing as a pyramid scheme. With a legitimate MLM company, you earn commissions off of product sells and if no one purchases anything from either you someone on your team or your replicated website then you don’t make any money.
So, therefore, it doesn’t matter how many people you recruit if no one is buying your not earning an income.
Pyramid schemes are illegal, but some pyramid schemes try to disguise themselves as a legitimate MLM company so beware of what you are signing up for and make sure it is a legitimate business.
The U.S. Federal Trade Commission has been cracking down on non-legitimate MLM companies (pyramid schemes) and warns people to stay away from multi-level marketing plans which pay commissions for recruiting new associates or distributors.
With a legitimate MLM company, it is okay to recruit new associates or distributors into the business, but the only way you earn money from them is from product sales not signing them up.
In other words, if you personally enroll someone into your business and they make a product purchase you earn the commission. If that person enrolls someone into the company who purchases something they get the lions-share of the commission and you get a small percentage as well.
Things To Look For In A MLM Company
If you are thinking about joining an MLM company, there are some things you need to look into first; such as.
- Who are the owners and what accomplishments do they have to their credit?
- Is there any up-front cost to join the business such as having to purchase a starter package or can you join for free?
- What are the requirements of the compensation plan and what percentage do you earn on product sells?
- Do the products work, made of good quality and something you will have repeat customers for or something that is a one time sale and continuously having to promote to get new people?
As with anything else in life you are thinking about doing it always pays to do some research first.
Can You Make Money Working For An MLM Company
Can you make money working for an MLM company? The honest answer is yes, but it depends on how motivated you are as to how much you can make. You have to do the work of promoting the products to get paid.
Just don’t let yourself buy into the B.S. most all MLM companies try to sell you on. If you don’t know what I mean by that I am talking about them telling you to just sign-up three people and then help them to sign-up three and so on and you will make a bunch of money.
The truth is it doesn’t matter if you sign-up 2000 people if no one is buying any products then you aren’t making any money. The only way you earn any money is on sales so I would much rather have 2000 customers purchasing than to try to build a large team where 90% of them are probably not even buying a product.
So keep that in mind if you are thinking about joining an MLM business!
One other thing you need to understand and keep in mind is it will probably take you anywhere from 1 to 3 years or 3 to 5 years to build your business up big enough to make good residual income, and that depends on you your efforts and of course some people who have joined your company.
In closing, if you are anything like me I am not a very good salesperson so I would not be joining an MLM company where I had to buy products and then try to sell them because I would end up giving them away and lose my money. I like a company I can join for free and gives me a free website to promote the products and send customers too.
But if you are a good salesman, you might do just fine with buying the products and reselling them but just don’t let yourself end up like so many others with a garage full of products they didn’t sell and lost a lot of money in the process.
I wish you the very best in your journey to financial freedom!
Prospering With CBD