What You Need To Know About Multi-Level Marketing

Multi-level Marketing can make you a lot of money, but it can also cost you a lot of money as well. It really depends upon the MLM  and you. I will tell you about my personal experiences and you can decide for yourself if MLM is really for you.

The definition of an MLM or Network Marketing business is simple. Each of these two types of business models require that you sell the business concept to others and build what is called a downline. In theory your downline can then build their own downline and that downline can build it’s own downline and so on. It’s viral marketing at its best. If you are a good networker then this could be a great business for you. If, however you are not a good networker then it really isn’t a good business for you.

That’s really only one facet of the MLM business model. The other pieces are sales quotas. Even though a company may not require you to buy inventory, if you don’t you won’t make it to the next rung or level. This is important because your Product costs are based on your level. You really need to be both a good networker and proficient at sales.

Here’s my story. I purchased a product for my own personal use. The sales person then asked me if I would be interested in starting a home business selling these products. In order to join this business I would need to buy a starter kit to be a full fledged dealer of this product line. I really hadn’t been looking for a home business but I was intrigued with the concept of a tried and true product with a pre-made structure around it.

None of this seemed strange to me, at the time, and I dove right in including the purchase of a quick start product package that cost well over $2,000. Thinking back on this I should have listened to my wife who thought the sales-person was a little too pushy. And so the disaster began.

Once you’ve indicated that you have bought into the premise you get bombarded with additional sales items such as brochures, motivation tapes, display items and a whole bunch of hogwash about why these products are superior to anything else on the market. You could spend a small fortune on all of these business accessories, not to mention sales meetings and conference calls. You spend a lot of time doing all of the so called required components.

I gave the business about 18 months and lost about $25,000 in the process. Frankly I couldn’t afford it anymore. My sales were never extraordinary as I had heard that they would be so many times on the tapes and motivational materials. In fact I think that the only people that made any money were the people who sold the motivational tapes and my upline management.

As I look back now I realize that I didn’t ask the right questions at the onset. One of the big drawbacks that I was not told before I signed up was that I could not sell the products online, which is a distinct disadvantage, although there were many “illegals” selling the products online. I suspect that they were all of the heavy hitters that were not playing by the rules. I was told repeatedly that they were under investigation and that once they were identified they would be banned as dealers. Phineas Barnum coined the phrase “There’s a sucker born every minute.” I guess that was me.

I hope this article will help anyone thinking about MLM or Network Marketing, and ask the right questions first.