When I was about 18 a friend of mine told me that he had found the perfect opportunity to make some money.
He invited me to a presentation at his house and was greeted by a big burly bouncer looking fellow, that I wouldn’t much want to run into in a dark alley. The gentleman began introducing himself and then turned on the businesses introductory video that was about to transform my life.
In this video there was a lot of smiling and promises of fast cars and big homes and promises of starting a business where I was the creator of my own destiny. The company that the gentleman was trying to get me into was Amway a direct selling company founded in 1959 with annual sales of around $11bn.
I didn’t bother pursing the “opportunity” as I didn’t think that it was right for me. I didn’t know it then but this was my first introduction to Multi Level Marketing or MLM.
What is MLM?
MLM or Multi-Level Marketing also known as networking marketing or referral marketing.
As a distributor for your chosen company you will be selling their products directly or recruiting other sales people to work for you, you might have been approached by your own friends or family to join in an opportunity that is just to good to miss.
A company’s products might include health supplements, make up, kitchenware or a number of other products. Companies that you might have heard of in the UK include Avon, Tupperware and Kleeneze to name a few.
Some companies require you to pay an initial start up as a distributor
How do you make money with MLM?
This depends on the company, but as a distributor for the company you will get paid for the sales that you make and also the sales of those salespeople that you have recruited and of those sales people that they have recruited too.
Recruited you say! It is for this reason that multi-level marketing is sometimes considered to be a pyramid scheme. The products that these companies sell range in price and as such the commission that you get from your direct sales to customers might be minimal and it is for this reason these companies encourage distributors to recruit new sales people, these are known as their downline.
Multi Level Marketing companies compensation plans can be difficult to understand and it is for this reason you need to understand what you are signing yourself up to before agreeing to.
So can you make money from MLM?
Avon alone reports annual revenue of $10bn so those working for Avon must be doing something right.
I’ve never tried multi-level marketing so cannot speak from personal experience, but have known people that have and whilst they have worked hard in trying to create a business, they were probably making less that minimum wage for the effort that they put in and as a result did not last long.
The thing is multi-level marketing is not unlike any traditional business and as such takes time and effort and then there is still no guarantee of success .
Is there anything that I should be aware of?
If someone has ever tried to recruit you to their downline they might have made statements that might sound to good to be true, these could include the possibility of making lots of money with little to no effort, free cars and in some cases even unproven health benefits.
Remember the old adage. If it sounds to good to be true, it probably is.
Questions to ask yourself
1.What will be my financial commitment?
Some businesses will require you to make an initial financial commitment to get started as a distributor and then continue to make a financial contribution to enable you to keep your status within the company.
2.How long as the business been operating?
Whilst there are a few established direct selling companies, there are new businesses that start up with ideas of how they will transform the market. They don’t really offer anything different to their established competitors.
If you are going to be investing a lot of time and money into a business do you want to be joining a business that might not be around in a few years time?
Even if the business has been in business for a long time they are not immune to controversy. This was proven in July 2016 when Herbalife where ordered to pay $200m to compensate consumers who were led to believe that they could make substantial money selling their products. You can read the full Herbalife $200m settlement story here
3.Do I believe in the products that are being offered?
If you don’t believe in the products that you are selling where are you going to find the enthusiasm to promote these products to buyers and keep those in your downline enthused enough to stay apart of your team.
4.How did the business seek to recruit you?
Are they giving you the hard sell or soft sell and making unfounded promises. If they are giving you the hard sell you have to ask yourself why. If the product or opportunity was good, surely it would sell itself.
5.Can you make the commitment in time and money?
Regardless of what you are told, it is unlikely that you will be able to get into MLM with very little commitment in time and money. If it was that easy wouldn’t everyone being doing it?
Is multi level marketing for you?
Only you will know the answer to that and I’m not here to make your mind up for you. I personally won’t be joining any MLM company any time soon. The reason for this being that I don’t believe that it fits in with my own financial and personal goals
If you have have half an hour spare, I recommend you watch the video below. If after watching it you still want to try Multi Level Marketing I wish you luck and success.