MLM (Multilevel Marketing) : An Analysis
MLM. Network Marketing.
Sounds very familiar, right?
Everyone of us would have heard about it in some way or the other.
Usually we would have heard about it through:
1. Our Friends and Relatives
2. The Net
3. The Infomercials
So the bottom line is that everybody knows about it but how many of us truly realize what MLM exactly is.
The general thought is that most people believe MLM to be pyramid schemes, which is anything but the truth.
So what exactly is MLM?
MLM is a mechanism that allows the product to be sold to the consumer directly rather than going through the cycle of warehouse to wholesaler to retailer and finally to the customer.
This results in the drastic reduction of prices of the products for the members of the MLM companies plus compensation for those recommending the company products and recruiting distributors.
But pyramid schemes aren’t the same.
They are in guise of being a MLM company and ask people to join them by promising them a huge wealth.
How do we differentiate between the two?
It’s quite simple. If the products and services are moving then it is a genuine MLM company but if a company shows its compensation plan as its main USP without much emphasis into products or services then it is pyramid scheme.
One of the fastest growing industries, MLM took a quantum leap in the 1980’s. It slowed down in the 1990’s as a lot of people developed a negative opinion about it but nevertheless it is now looked upon as a serious alternate career option.
There have been a lot of MLM companies getting established due to the success of this industry over the years.
Right now all companies have their own websites allowing their distributors to build their ebizel (i.e. business online).
Ebizel is a way more efficient way to generate consistent income, all thanks to the reach of the Internet.
So how does Multilevel Marketing work?
A person can become member of MLM by paying a small sum of money. By doing so one gets access to the products of the company at subsidized rates.
Anyone part of MLM can make money in either of these 2 ways:
1. Sell company products at retail price to others
2. Build a downline list which results in a series of continual sales
Obviously the real money is in building a downline list.
The concept behind which MLM works is very powerful.
Its biggest USP is its simplicity.
Anyone can start a home based business with a small start up amount and can expand their business to great heights.
Low starting cost resulting in huge income. Quite powerful isn’t it.
That’s not the end of it, the best part of MLM is that its income is residual (just keeps coming in after a period of time).
So just like it sounds, people thought all they needed to do was to join in and recommend their company to few of their relatives And friends and then lie back to live the life of their dreams.
But it doesn’t happen that way.
The biggest USP of MLM is also its biggest liability – simplicity.
Hard work and development of leadership skills is required to build a strong downline list.
This is easier said than done. But it is possible.
Those who spend their time increasing their worth as a leader who can help others achieve their dreams always succeed in this industry.
MLM has always had a love-hate relationship with people all over the world.
That is because of its perceived simple concept which appeals to opportunity seekers who look for a miracle to solve their problems. They never succeed in any venture because of this mental attitude.
The real fact is that not everybody will succeed in this industry but only those who are willing to learn what it takes to succeed. They are the only ones who will actually succeed.
As time goes by, the thought process of people changes.
Right now a lot of people feel that in this world of extreme cut throat competition being an independent entrepreneur is the best bet.
And there lies MLM as a perfect platform for those looking for a low investment high growth business.
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I have an internet-based home business in Illinois – how do register this with the State? Do I need to?
Do you need to register a sole propeiter-ship? Do I need a business license for a home-based business?
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