Network, consumer direct or multi-level marketing or directselling refers to a business approach where individuals receivepayment for sales by their recruits into a distribution network.In the US, about 20% of adults have reported direct sellingexperience, while 55% say that they acquired goods or servicesthrough such channels.
However, some have also reported negative experiences, makingabout 70% of those who tried network marketing decide to leavethe industry.
The system allows a marketer to generate higher earnings throughhis own sales and through a percentage of sales of his recruits,or downlines. The recruiter, or upline, provides new recruitswith the needed assistance and training until he can workcomfortably and independently.
Some of the more popular and successful MLM or network marketingstories include Avon, Mary Kay Cosmetics, Amway and Tupperware.
One major industry concern is that some so-called pyramid orPonzi schemes masquerade as MLMs. One way of distinguishingbetween the real thing and the scam is that MLMs do not entailhuge start-up costs, while pyramids ask for a significantinvestment for new recruits.
Legitimate MLMs also offer to repurchase unsold product orinventory for as much as 80% of a distributor's payment. An MLMwill also consistently refer to a target market for its productor service, while a pyramid will focus only on pushing a productor service without any clear consumer preference.
A potential marketer should also be wary if a program focusesmore on recruiting than selling; intense recruitment effortcould be a sign that the scheme aims to make a quick profit onunsuspecting individuals, especially if one is offeredcommissions for each new member he adds to the network.
Ethically, the MLM should focus on building downlines by seekingindividuals first as customers instead of promoting the incomepotential of the business. Once the individual accepts orbelieves in the product, the company will no longer need anyhard-sell for recruitment.
Interviews with consumers who have experience with the companyand its offerings and securing a Better Business Bureau profileof the MLM will also help establish if the business is alegitimate one.
Before joining an MLM, one should be decided on selling thecompany's product or service and have reasonable expectationsfrom the business, particularly in terms of earnings.
Ideally, an individual should have access to his upline'sstatus, including his earnings from the venture, background, andtraining support.
The new marketer should also ensure that he profits from hiseffort and investment into the MLM within weeks of joining thenetworkm particularly if demand for the product or service isstrong. Pyramid schemes often preach patience and say thatearnings will come only after months or even years of work.
It would also help a recruit to establish how much marketing oradvertising support the MLM is giving for the product. The newmarketer should decide if he is keen to joining a company thatexerts much effort into promoting the product throughtraditional advertising and new media such as the internet, orif he prefers a network with a more restrained approach.
The beauty of MLMs is that it offers low entry costs and highrevenue potential, with evidence that such investment andprofits are possible. However, these same qualities have madenetwork marketing attractive to unqualified individuals withpoor backgrounds from previous employment or businesses, havelimited capital and unrealistic expectations.
Although more of the exception than the rule, these are thetypes of individuals who tend to destroy the reputation oflegitimate distribution networks. MLMs run by such charactersoften oversell the business, place excessive emphasis onrecruitment and unfortunately, offer inaccurate or misleadinginformation on the venture.
Legitimate network marketers take time to work on their businessfundamentals and are not content resting on current success.These companies are also open to learning and adopting newmarketing or sales approaches, networking strategies and otherideas for further business development.
In a sense, MLMs are knowledge-driven. This view recognizes thefact that in the so-called new economy, people and money areknowledge - extending the reasoning, this means that oneenhances his chance of success the more people he has on thenetwork.
About the author:
Daegan Smith the owner ofNet MLM Articles and the leader of the fastest growing teamof successful home business enterpernuers on the net. Find outhow we're creating financial freedom all across the globe andhow to get in on the action FREE =>http://www.comlev.com
