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MLM – A New Business Model

Multi-level marketing, or network marketing, companies have produced more millionaires and six figure incomes than any other business model on the planet hands down.” Scott Hallock. They definitely are the new business model for this century.

Myths On Network Marketing

“People around the world have their opinions about it. They have their misperceptions about it. There are a lot of myths rolling around about the network marketing profession

  • Some think only the people at the top make money.
  • choose to believe that most people don’t earn anything.
  • The fear that you have to jeopardize relationships in order to be successful in the business.
  • Worst of all, some think it’s not a real business.

“Even though this profession does over $180 billion a year in retail sales; with approximately 100 million people are involved in the network marketing profession around the world; and approximately $200 million U.S. is paid out every single day in commissions in this great profession. Inspite of these facts are out there, there’s still a lot of misconceptions on the industry. There are a lot of misplaced perceptions in the world.>

People just need to understand. People need to wake up. The need to stop being a part of the matrix and understand the realities of the new economy is more paramount today than ever before. And that’s all true because yes, people do need to do that.”-Eric Worre

The Truth

What mental images, visceral reactions, and emotional triggers does that phrase induce? Slimy, pushy sales people? Obnoxious friends throwing product parties and pressuring you to host? Acquaintances dropping the name of their brand at every chance they get during conversation?

Yes, we’ve all experienced our fair share and, yes, this is the downside to MLMs, however I want to show you the upside and then maybe you’ll see why brand representatives are so eager and passionate about their work. Remember the Avon lady? Tupperware parties? Mary Kay pink Cadillacs? Electrolux door-to-door salesmen? These direct selling companies began as single-level marketing companies but then adopted the multi-level marketing structure. MLM companies have traditionally been an excellent way for stay-at-home mothers and wives to earn a little side cash. Even if you love your spouse, your children, and tending the home, it’s always empowering to earn your own money.

Some families or individuals take on an MLM because two (or more) incomes are necessary to cover expenses and perhaps keeping the children at home is a priority. There are all sorts of life situations that require non-traditional extra income and MLMs help meet that need. A service provider (massage therapist) might take on an aligned MLM product to supplement her income.

Early MLMs were typically brands of household, beauty, and health products. Brands that appealed to women were what women were good at selling and recommending to their friends. Then along came the company Amway which changed the tone of MLMs. Its reputation is the poster child of all that’s undesirable about MLM companies: pushy sales people, disguised sales calls, cult-like pressure tactics, and over-inflated income promises. (In all fairness, I believe Amway has changed their ways under pressure of the legal system, but the stereotypical reputation has yet to be fully shaken off.) In spite of the challenges, MLM companies persist and the business model has proliferated.

Am I Safe in a Network Marketing Company?

Because the best parts about MLMs are still great. Now there is more regulation of MLM companies, there are fewer financial risks to those who sign up with a company, their commitment to the company is more transparent, and the compensation plans are easier to understand and more realistic.

MLMs, to get away from the negative connotations, have started using other phrases to describe their business model: networking marketing, direct sales, word of mouth marketing, and referral or relationship marketing. But they are all basically the same.

One thing MLMs are not is a pyramid scheme. Pyramid schemes involve the exchange of money without the sale or exchange of product or services. Receiving monetary compensation for signing up a sales person (distributor, consultant, affiliate) under you constitutes a pyramid scheme. Legitimate MLMs do not do this. Financially benefitting from signing up a distributor under you only happens when that distributor or their downline (distributors or customers under them) purchases product.

Shady MLMs are fading along with the door-to-door vacuum cleaner and encyclopedia salesmen. I think MLMs are the future of business. Why?
Because I believe that the people (yes, us) are tired of the corporate, capitalistic model when large companies profit from sales then distribute the excess to externalized shareholders. The people are very much exploited with seductive marketing, advertising, and strategic pricing. Think of Walmart, Target, Nike, and McDonald’s and how much money they make for shareholders off the common people.

In an MLM the shareholders are the internal, integrated, non-salaried distributors. As the company succeeds and rises, its distributors succeed and rise. When bringing more compassion, collaboration, and cooperation into the future of business, I believe MLM companies are using an excellent and forwarding thinking business model. MLMs who also align with charitable causes or fund their own non-profit organizations do good in the world such as social (buy one, give one) enterprises like Tom’s Shoes.

Why Should You be Part of MLM?

Do MLM company headquarters and employees want to succeed as much as corporations? Absolutely! But who benefits from the success differs. The MLM distributors who smartly and successfully promote their brand and generate income and bonuses (trips, prizes, money) do! Grand effort can equal grand reward! MLMs are not an easy and quick way to get rich. Rather, they can be a legitimate and fun way to earn money over time with dedication.

  • Good MLMs are responsive to their team of distributors, rather than driven by the demands of externalized shareholders.
  • MLMs also offer sales commissions – like in car or real-estate sales . When customers purchase product without becoming part of the company.
  • With the advent and dominance of the internet, building a legitimate business as part of an MLM for yourself while staying home or as a side venture is easier than ever offering freedom of location, flexible working hours, and a potentially global downline.
  • Now that MLMs are becoming more common and multiple companies are selling competitive products, the companies need to be more strategic and appealing in their prices, compensation plans, and product or services. This is great for the distributor and customer! Healthy competition keeps everyone honest and products appealing.

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