Multi-level marketing is considered to be a legitimate business strategy, but has been controversial ever since. One of the reasons why is the fact that it has been associated to “pyramid schemes,” where recruiters use the money coming from new recruits to pay the people on top, and often pretend that what they’re doing is a form of “multi-level marketing.”
The idea is, you have to build a team of people and being the leader, you’ll receive a commission on the sales you’re going to make and the sales of the people whom you have recruited.
Which means, YOUR sponsor, THEIR sponsor, and THEIR sponsor (and so on) create your “upline.” This is where you’re going to enjoy the commission on sales made by you, as well as your recruits.
How Do People Make Money from It?
It is a tactic that some companies utilize as a way to promote their business and encourage distributors to recruit new distributors by giving them a commission coming from their sales. These people will be classified as the distributor’s “downline,” and the distributors make money not only through recruitment, but direct sales of products to consumers as well.
The Pros of MLM
– MLM Companies Manufacture and Ship the Products
You’ll be selling goods that have been manufactured by the company and these products will be shipped by the company to your customer/buyer. This means, there’s no need to worry about anything– all you have to do is sell the products.
– Flexible Hours
You don’t need to follow a certain schedule and you can work whenever you feel like it. If you have a regular job, you can work your MLM business during your free time. On the other hand, if you’re a housewife or a full-time mom, you can do this whenever you’re not busy.
– Work from Home
No need to go to an office just to run your MLM. Everything can be done within the comfort of your home.
– Leveraged Income
Believe it or not, one of the perks that you can enjoy from multi-level marketing is the unlimited source of income from a single effort.
Basically, you’ll be earning commissions from sales generated by your recruits, not just your own sales. As long as your ‘downline’ will continue working hard, you can expect a continuous flow of income.
– Pre-existing Plan
There’s no need to come up with a marketing plan. Everything will be taken care of by the company.
Cons of MLM
– The “Warm Market”
Generally, you’ll start marketing to a so-called “warm market.” Your initial customers will be the people you know, such as family members, friends, colleagues, advisers, teachers, classmates, and so on.
Reactions to such approach may vary. Some close friends and family might think that there’s no use of joining the program, and reject you. However, there are those who will be interested in becoming a part of your team. These people should have the determination and dedication in order to ensure that both of you will earn.
– Takes a Lot of Effort and Energy
Aside from being an active recruiter, you should also stay on top as you support your downline. Remember, this type of business requires “teamwork,” and in order to earn, each and every one of you should help each other.
Who Is Best Suited for This?
In order to be a successful in MLM, you should be a self-starter and have the ability of leading others. On the other hand, if you’re someone who easily loses motivation and drive, then this type of money-making process isn’t for you.
Lastly, if you’re going to take on this role, you have to be comfortable dealing with people and be able to explain everything related to MLM– not only the advantages, but the disadvantages as well.