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Demystifying The World Of Multi-Level Marketing

Updated: Sep 25

Multi-level marketing and business-minded folks have always shared a strong love-hate relationship.

It’s hard to resist the opportunity to make 6-7 figures every month simply by networking with people. At the same time, the widespread rumors about people getting scammed for hundreds of thousands give us cold feet.

It’s not a myth that people have set up thriving businesses at cost through multi-level marketing (MLM). Honestly, if networking is your forte, then MLM is your golden ticket to career success.

But then what’s all this negativity about? Is MLM really a big no-no as everybody says, or a no-nonsense model to change your life forever?

Let’s find out.

What Is Multi-Level Marketing?

Multi-level marketing isn’t rocket science — although it’s widely proclaimed to be just as complicated, if not more.

MLM is one of the various forms of direct sales with a small, yet pretty significant twist.

Here, instead of being a salaried employee, you’re working as an independent marketer who sells a business’s products/services to different customers.

Many established companies, including Amway and Oriflame, use MLM as a primary distribution channel to sell products and grow their business.

How Is MLM Different From A Regular Job?

Working as a multi-level marketer introduces you to a brand new lifestyle.

You’re working with multi-million dollar businesses as a sales representative, so why not? There’s always the advantage of working at your comfort from home, simply by networking with people online or in person.

Here are more insights on how MLM differentiates itself:

  • As an MLM rep, you’re an entrepreneur who’s purchasing inventory from third-party companies to do business with.

  • You can recruit subordinates anytime without worrying about salaries; they can also establish a separate business.

  • You’re rewarded with attractive commissions every time a subordinate closes a sale.

How Does MLM Work?

Glad you asked.

Most of the representatives are recruited by previously associated marketers via social gatherings or sales events. Or even if you’re a continual user of X brand’s products and love the experience, the salesforce will most likely offer you a position.

If you accept the offer, you’ll be further invited to various sessions where the salesforce teaches newcomers about how this program works. Once you’ve covered these basics, you’ll be contractually obligated to purchase inventory from the company.

This is where your journey begins.

Now that you’re an independent sales rep, it’s your responsibility to sell the inventory to earn profits and repeat. This way, you establish your very own small business — and once you begin, it’s your turn to recruit more folks and continue the cycle.

The Benefits Of Multi-Level Marketing

Here’s a detailed breakdown of how you can benefit from being an independent sales rep:

1. Comparably Low Risks Involved

MLM surprisingly involves lower risks, if compared with other forms of business. One of the biggest perks of this program is that anyone can participate and earn profits without the fear of failure with the right plan.

The investments are also quite low, and selling products becomes a cakewalk when you’re an amazing networker.

2. No Limit To Income

Another amazing perk of MLM is that there’s no cap on how much you can earn from selling people and recruiting people. Successful marketers usually earn somewhere between 7 to 8 figures a month.

3. Almost Zero Operating Cost

Multi-level marketing is insanely pocket-friendly.

You don’t need any infrastructure or a salaried workforce to run a successful MLM program. Compare it with alternative business models, and you’ll realize how much less you’ll have to spend every month.

The Pitfalls of Multi-Level Marketing

We’d be lying if we told you that MLM is always all rainbows and unicorns. Yes, it gets much better than expected with time, but here are some disadvantages you may face initially.

1. Low Income For Beginners

If you’re working as a low-tier sales representative, you’ll have to go into overdrive to strengthen your position. Meanwhile, your monthly income will be considerably lower than the high-tier folks.

2. Insufficient Sales Training

This being an independent program, don’t expect full-on support from the companies you’re buying inventory from.

The ones who are previously experienced in sales always get the upper hand post joining. But if you’re from a non-sales background, the lack of knowledge and assistance will sting a little.

The Bottom Line

The fear of wasting a huge amount of money and time is one of the biggest reasons why people have second thoughts about MLM programs. But let’s be honest — isn’t this risk prevalent in literally every form of business?

When you move past the insecurities of not being hired and salaried, that’s when you recognize the potential to earn more independently.

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