Are you scared of trying MLM? The two topmost reasons why people are afraid to get into the MLM industry are number one: they do not exactly know what it is or how to go about it, and number two: they are misinformed or they think that it is a pyramid scheme. Let us first define what MLM is.
What Is MLM: Definition or Meaning
MLM stands for multi-level marketing and is often called Network Marketing or MLM Marketing (also MLM Networking). It is a particular sales scheme or structure of doing a marketing business, often with a high sales-staff turnover rate as the company gets older. And no, (legitimate) MLM businesses are not scams; they are not pyramid schemes.
I must mention that to succeed in the industry, the first step is to make sure you are in the right company. Even if you are very skilled in marketing and getting new leads, you will still not succeed in MLM marketing if you joined the wrong company. A lot of pyramid schemes pretend to be MLM companies and not all MLM companies are the same in that others don’t have the best marketing plan just enough to reward you greatly – that is a fact.
The Difference between MLM and Pyramid Schemes
Pyramid schemes have absolutely no or have only one or a few weak products to sell and would usually require their distributors to buy the products themselves. Strong MLM businesses on the other have superior products and make the bulk of its profit (at least 70%) coming from product sales and not just from the recruitments or new memberships.
How Does MLM Work
Sales people working within the industry initially earn profit from the sales they make selling the company’s products and also from the commission they make from recruiting other members or salespersons to their team. If you are able to find lots of people to signup beneath you as your “downlines” (or downstreams”), then you can make loads of money. On the other hand, that is not very easy at all and could require lots of businessman skills. It is not a get-rich scheme like some of its proponents often state it is. Yes you can become a millionaire in a networking business, but it doesn’t happen overnight. Read: Most Reliable Attraction Marketing Secrets That Crushes Any Business
How (Some) People Become Ultimately Rich Doing MLM
The truth is: not everyone in the MLM industry doing the business succeeds in it. It is a tough business, but still, there are those people who have become ultimately rich doing it. How does it happen? How do they do it?
Those MLM salesmen or “independent distributors” who have a large active network under them are usually the ones who make it big in this industry. The usual setup (not the same with all MLMs) is that the distributor earns a 25% commission from his direct referrals (from the people he has recruited directly to the company), and he earns 10% from the people referred by their direct referrals, and lastly, 5% from the 3rd level referrals and so on and so forth. You also get some residual income as your membership level moves up in the company and an override bonus from the percentage of all of your team’s sales.
You can have an ultimate number of downstreams all doing the business and each multiplying the team profit; so, if you have a particularly large network underneath you, then you could also earn big. Read: How to Build an Email List the Easy Way
Criticisms with the MLM Industry
Most distributors or marketers wrongly advertise MLM as a quick and easy method to earn heaps of cash. (They do so to encourage more signups). But not everyone who joins an MLM company is able to build his network successfully. Yes, there are some people who almost do nothing, meaning they let their downlines or downstreams work for them (without helping them) and yet they still earn from it because that is really how the structure goes. On the other hand, we cannot say they didn’t do their part at all because initially, they worked (hard) to invite the few good people whom they know are going to do well in the business. They were the ones who introduced the business to their hard-working downstreams so they are still earning some reward or commission out of it, even without doing any more follow up efforts. This is not an ideal way of doing MLM, though. If you want to maximize your earning potentials in this type of business, you also need to maximize your efforts.
How to Do MLM Correctly
The most effective way to do MLM is to constantly develop your contacts, regularly recruit new people to the company, and help and work with your downlines. Most people in networking make the mistake of letting their downlines do the business alone without any assistance. They almost immediately stop communicating with their downlines the moment they have successfully recruited them. Yes, they may have earned some money recruiting their downlines, but it would also stop there. If you fail to become a great MLM marketing leader to your team of downlines, then they may stop recruiting further members to the company and your profit will also halt. The wisest step in doing MLM networking is to mentor or train and encourage and help your downlines so you could all earn more commission through team effort.
What If Your Upstream/Upline Isn’t Supporting
It is an unlucky fate if the person who recruited you (and earned from it) suddenly stops helping you to go about the business. This is especially hard if you are still starting in the business. What matters though is that you are in the business and that you belong to a good company. You can still succeed in the MLM industry on your own, at first, as long as you just make sure you don’t lack any of the following requirements to succeed in this business:
- Support (even if it doesn’t come from your Upline)
- Sustained enthusiasm in doing the business
- Ability or Training
- Time and Effort
- Resiliency from Rejections and Distractions
- Passion to win the game
The MLM Industry, if done right, is a promising haven of great opportunities. You shouldn’t be scared. Just go ahead and take a dive.
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