Most people look at joining an MLM (or Multi-Level-Marketing company) for a few important reasons:
- the desire to own a business within the structure of a larger organisation
- the desire to create a residual income
- the desire to have time freedom to work part-time or choose their own hours and finally
- the idea that you can create a decent second income in these economically challenging times.
I think these are all great reasons, they are all the reasons I got into MLM to begin with! But it’s not been without it’s challenges, I can tell you. I am constantly amazed by the negativity I have to face when I speak to people not involved in Network Marketing or MLM’s.
MLM has been around for decades, many of the original MLM companies were founded in the nutritional arena and of course, many of the big MLM giants (Neways, Amway, Avon) still market their products using this business model today.
As long ago as the late 1800’s some forward thinking creative entrepreneurs (such as David McConnell of California Perfume Company and Henry Heinz of the famous beans!) were thinking up ways to exponentionally increase their marketing efforts and looking at ways to reduce their own work hours through employing others to take on the marketing of their products. These people were then allowed to have their own businesses and were paid commissions based on their efforts.
This has since developed to be one of the bedrocks of the corporate world today.
So where has the perception gone so horribly wrong?
Well, many suspect that it is the success of the system that has been it’s worst enemy. While many people market products that they believe in and many companies deal ethically and correctly with distributors and customers there is a darker side to the coin. As with all successful businesses MLM has attracted a huge amount of attention and profiteers have spent a long time hijacking the business model. Think of MLM and you probably also think of the Pyramid Scheme. Many people view them as one and the same thing which is a mistake as they are very different.
So, what really is the difference between MLM and Pyramid Schemes?
An MLM is a form of network marketing and a system that allows indepentent distributors or business owners to market and sell the products of a company to other people and get paid commission for it. The keyword here is PRODUCTS. Pyramid Schemes are illegal because they ask people to outlay cash without delivering a specific product or service. This can be incredibly dodgy and is a magnet for unscrupulous characters, as history has proven (look at Bernie Madoff and his Ponzi Scheme – it’s just another Pyramid version).
So why do companies have MLM as their model?
Quite simply, it is a ton more efficient. They don’t have to invest in expensive advertising, they don’t have to outsource to PR companies, advertising companies or pay loads of sales and marketing staff. They save millions of pounds in traditional advertising and marketing budgets and some of this saved revenue is paid out to their distributors in the form of commission but only after the product is brought or sold – it’s a pretty clever idea!
There is an absolute wealth of proof that MLM is a successful, thriving business model and there is nothing to fear from taking the plunge. In fact, it’s the best way to develop a business that allows you to plug directly into a business, receive the right kind of support and training and develop a true residual income where you aren’t trading your time for money.
If you’d like support, have any questions or would like to comment on the above, I welcome it – please do feel free to contact me.
