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The Advantages And Disadvantages Of Multilevel Marketing

Dec 2, 2007
Have you ever dreamed of heading a business of your own from inside of your home? If you've pondered this option (whether it is for full- or part-time) and you are good with people but possess minimal business savvy, then Multilevel Marketing (MLM) is a viable solution. This is also a great choice if you are low on start-up cash.

MLM companies supply a product or service to customers through a web of "independent" distributors, who usually set up shop in their homes.

Reliable MLM companies offer low start-up costs, provide all necessary training, help with advertising, and provide you with a line of products or services to offer the public. They also encourage you to recruit additional distributors and generate commissions on their total sales.

Despite all of this, the United States Federal Trade Commission tells people to approach MLM companies with caution, as some people are paid through every distributor you bring aboard (much different from receiving a commission on total sales that are generated). Beware of this practice, as it is against the law and referred to as "pyramiding."

The FTC in the United States additionally suggests that you complete a lot of research on an MLM company before signing any paperwork. Signing documents under pressure is also discouraged, as it is important to take your time with these sorts of decisions. A helpful page to look into is the Multilevel Marketing Caution Web Page found at the Federal Trade Commision's web site. Here, you will encounter seven checks you should complete before deciding to finally join a specific company.

When it comes to going into business, research becomes a rather important process, and establishing a distributorship with a MLM company certainly falls under this requirement.

Trying to locate information on "Multilevel Marketing" by using the Internet produces a hodge-podge of results. The details of this venture span sites like general information arrangements, government agencies, encyclopedia-like sites, and testimonials from former MLM distributors, who are most likely unhappy with their results. This is because the people who are excelling in MLM do not have the time to create websites on the subject, as they are too preoccupied with building up their network.

The Good Points

When looking for advantages to locating a reliable MLM company, consider:

- The company is established and offers a product line or service that is rather marketable. They also make a great effort to improve or add to existing line-ups.
- When recruiting fresh distributors, the company does not follow pyramiding schemes.
- The company is linked to a solid track record and showcases great work ethics.
- You don't need any experience. A beneficial MLM company delivers one-on-one training that may include motivational seminars and helpful training materials. The goal is to make sure everyone succeeds, which means everyone benefits.
- A trustworthy MLM company is family-oriented and doesn't allow explicit conduct.
- Decent bonuses and numerous incentives are given to top-workers.
- An MLM company is well established when they can give you resource material that furthers both the sale of products and recruiting.
- The fees to start-up are low.
- They offer a strong support system.
- Good examples help lead the way.
- The competition amongst peers is non-threatening.
- New workers are greeted by a profitable business and marketing plan that is already in place and easy to follow.
- Both full-time and part-time opportunities exist.

These are some of the characteristics that the ideal Multilevel Marketing Company should possess; yet not all reliable companies will showcase these benefits. You will find that some companies are better is certain areas than others. This is why researching companies is important. Don't just settle with the first motivational hype to come along - a common ploy amongst the majority of MLM companies in an attempt to recruit.

Some MLM distributors have been in the business for so long, they are able to spit out a "come-back" for nearly every statement or question you express. Beware of this, as this is known as a "high-pressure" invitation to become a part of a company. You always need time to soak in all of the information, especially if you've been hit by excitement. Sit down and take a deep breathe before making a decision and remember that research is key. When companies are good, they will still be waiting for your decision with patience and will probably conduct a follow-up phone call.

The Bad Points

When looking to accomplish great things in life, the MLM model seems pretty promising, however it is foolish to think no down points exist. Consider the following:

- Disreputable MLM companies are notorious for taking advantages of newcomers, making research all the more powerful.
- When planning to create a network (a "downline"), it can cost more money than you are ready to commit to and can take more time than expected. However, this is still a big difference from the costs and time involved with beginning a traditional business. Most of the money is spent of the resources and training materials that you will deliver to your downline distributors.
- A lot of money is usually spent on gas for your car, eating out, and hotel rooms.
- Some companies require you to commit to minimum monthly orders to keep up with your distributorship.
- Some companies only pay for recruiting other distributors and do not give out a commission based upon total sales. Remember - this is pyramiding and it is illegal.
- Some companies may promote product that "sell themselves," but you really can't make a lot of profit with little to no effort. A lot of energy and motivation is required for any business - traditional, online, or MLM.
- A lot of rejection comes with the territory, as more than 80% of the people you come in contact with are going to turn you down.
- Overspending is often a consequence of ventures that spiral out of control. Some companies are masters at making you feel pressured about spending more than you can afford.
- Some people make this business their entire life and as a result can cause friction with family and friends. It is not uncommon to see a worker choose a MLM seminar over attending a family wedding if they are held on the same day.
- Like all other businesses, you will start off spending more money than you are making.

The final conclusion: The majority of business entrepreneurs often ask themselves the question of how much they will be able and are willing to lose if MLM doesn't work out? This is an inquiry that you must ponder when considering Multilevel Marketing.

Also, what are you seeking out of life and what steps will you take to achieve it?

If you take pleasure in helping others find success so that you too can reap the benefits, are willing to take risks for a business (even if for part-time ventures), and are willing to put in the work (and time) that stretches across long days, then Multilevel Marketing may prove just the thing you've been waiting for to realize all of the business and life goals you have set for yourself.

Cheers to success!
About the Author
Discover Kevin Sinclair's system for making profits regardless of whether anyone joins your network marketing business.
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