CAN YOU ACTUALLY MAKE MONEY IN MLM (MULTI-LEVEL MARKETING)
Multi-level marketing statistics show that more than thirteen million people in the US are distributors for an MLM company. It’s more than $100 billion US dollar industry. So even if it is the minority who make money in MLM, it is a fact that people do make money in MLM. Click here to read about some of MLM Top Earners. These few may know how to manoeuvre the challenges of MLM, or they just lucky. About seventy percent of the distributors work part time and most of them are ladies. I think ladies trust other people easier than men. 99.9% of distributors make less than 150,000 US dollars per year. Mostly the 0.1% is made of the marketers at the top of the chain.
Only about ten percent of people who go into multi-level marketing (MLM) make money from it. The rest lose their investment. Mostly because they don’t have what it takes to excel in MLM. There is no shortcut to it, to excel in MLM one needs above average social skills, the ability to influence people and command a following. If you are an introvert this is not a business to engage in. The reason behind ninety percent failure rate is because; the barriers to entry are almost not there. With these, we have huge number easily joining and most of the new entrants also exit the same way. If you invest too little in a project, you don’t feel the pinch of losing your money, and there is no motivation to work hard. Others just join to please their friends or relatives, and that is no motivation for a competitive business.
There are a lot of wrong, limiting beliefs about MLM. Most people have this idea that MLM is a pyramid scheme and illegal. MLM is a legal business model that most companies have used succeed. Unlike a pyramid scheme, which is a game of money, and where the gain of one is the loss of another, MLM is a direct marketing tool, where people sell legitimate products to needy customers at a fair price. Although there are some bogus schemes that introduce a cover up product to lure the public to believe that it’s a genuine MLM. MLM relies heavily on the entrepreneur building a good network of people who can multiply his effort in distributing the same products and recruiting new distributors, and the entrepreneur earning a small percentage from this network. The more persons the entrepreneur recruits the higher his earnings from the sales of the recruits
Also MLM is not a get rich quick scheme. Anyone with that intention will get frustrated. It takes a lot of hard work, dedication and planning to make money in MLM. Also called network marketing, MLM is just like any other business model. You can’t just sit at home and expect money to find a route into your bank account. Most people who have been successful in MLM set aside some hours of their busy schedules and look for customers and way to promote their business. They network and create a team that will propel their growth and success.
A friend whom I met selling forever living products built his portfolio for more than three years. He was always on the move looking for new clients to buy his products or join the network. He had a deep understanding of how the products work. In short, he was a good sales man for forever living products. At the end of the day he was able to earn a living from his side job.
Another major criticism is that, eventually the market of MLM products saturate, and marketers are left with nowhere to sell their products. This depends on the marketing strategy of the company. If the company is not supportive in marketing their products’ as quality and affordable, support their marketer with enough training, then no number of networked marketers can change their fate. The product market will definitely be saturated.
At initial stages one has to really do through research. Make sure that the products have a genuine market, and what support mechanism the company will provide. Most of the companies do through training on the product usage and availability. Just as any other business model a SWORT analysis must be done. Know all that you can about the company, its products and market target. Just joining an MLM network just because your friend has introduced you is a sure way of failure. There are a lot of opportunities in MLM but you have to find just the right one. Something that you really believe it addresses a specific need in the society.
So to conclude, making a direct sale of a product is more profitable and has high chances of survival than MLM. Therefore to succeed in MLM you have either to join when the company is starting and work hard to build a network. Make sure you have a lot of distributors under you. This will result to more than 50 percent new recruits, are on your network. If this option is not viable, then join an MLM company that pays more commission on direct product sale, than number of recruitments you have. That is an MLM company that is closer to direct sale.
For long term successes in MLM choose a company that has a product that makes a difference in the society. A product that the company offers discounts maybe on quantity or cash discount basis. A company that gives enough support to the products, and uses MLM for distribution of its products. Then you will have a chance of recovering your costs from the profits you make in product sales and commissions received, and if you are able to recruit members, more commission.
Make a business plan and do your research properly. If you can’t use the product you are selling over and over again, why do you think others will? Look for products that can easily sell to targeted consumers. That are of benefit to them and they will buy them over and over again. In this way you are sure of making money on two fronts. That of margin from product sales and recruitments of members.