What is Multi Level Marketing and How Does It Work?

By Corrisa | Business Success Tips

Mar 29

If you’re wondering what is multi level marketing and how it works for the average person, then you’ll want to read this eye-opening revelation before you join anything...

This is going to be one of the most unusual and blunt articles you’re gonna read about MLM - and how it really works for the average person getting involved.

You see most articles you see on the 'net on the topic of Multi-level marketing are going to typically fall into three categories - i.e. those that say: 

1. Those things never work
2. I failed in MLM - but it wasn't my fault
3.They would do anything for their MLM

Hmm. This is gonna be kinda fun. Hang on for the ride!

#1 They Never Work!

Who says this? The person who doesn’t know anything about MLM but knows that ALL of them are scams because...the Internet says so. Don't laugh. 

Yep there are people who go to Google and see that people are typing in MLM scamMLM pyramid etc...- and think that Google is a crystal ball. 

Yes, they believe that the search engines are all-knowing and so it must be devine and a sign from God  and that it must be true if it shows up in Google search. Now you can laugh.

What drives the Internet is content. Anyone can produce content that says anything. Just because the search engines pick up the content, it doesn't mean that it is true. It's for the reader to do their due diligence and discern on the validity of the information that is presented to them.

Laziness.

That is probably the biggest reason why a lot of people believe everything they read and hear. These people fail to do any meaningful research on the industry - if at all.

Now that was kinda harsh. 

On the flipside, there are people who wholeheartedly believe in what they're saying and don't know that they're unintentionally spreading misinformation.

I do understand that people have a need to save other people from something - even if it's a $500 distributor kit.

However, the worst thing anyone can do in regards to this, is to mislead and misinform people all because they did not do their homework first before opening their mouth or typing something online.

If that sounds like you or something you were doing, I'm sorry to be so blunt and kinda rough with ya, but my only goal is to get people to think about what they're doing and saying to other people.

There's nothing wrong with posting an opinion, but what is that opnion based on? 

Is the anti-mlm person trying to sell you on their product or service or another kind of business opportunity? 

Do they have a bone to pick with the industry? Or are they just plain nutty or a liar (or both)? Some people just love the attention and so they will say anything - even if it's untrue.

It's All About the Traffic Baby!

There are people out there who intentionally write anti-mlm stuff because they want to get traffic to their site so they can get more people clicking on the ads on their website. In other words, they do it for the money. 

They have no desire to tell the truth because it doesn't matter to them - money does...even if it's misleading and lying to people.

So sad 🙁

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#2 I Failed in MLM - But It Wasn't My Fault!

The person who tried an MLM and failed - or knows someone who knows someone who tried an MLM and failed. These are the “I’ve tried that!” or “I heard those things never work!”

Remember a lot of people don’t take responsibility for their past failures. A lot of folks won't admit that it was their fault their business failed and/or admit that they did not put enough effort and focus into their business in order to reap the rewards.

Failure is sometimes a bitter pill to swallow, however, the only way to success is to admit where you went wrong and learn from your past failures.

Are there instances where the MLM company is to blame for a reps failure? Sure, but remember the rep chose the company - the company did not choose the rep.

Like I stated before, learn from past mistakes - even if that mistake was choosing the wrong company.

#3 I Would Do Anything For My Company

Now this is the opposite extreme of the "They Never Work!" people. These kinds of people are a complete turn-off because they look at their company as their lover and savior (and no I'm not kidding).

I've ran into these kinds of people online. You say anything less than praiseworthy of their company and products and they're ready to come to your house and disembowel you! Their company changes the comp plan and they're on the 5th floor of a building threatening to jump off. I'm sure you're getting the picture I'm painting here.

This is why a lot of anti-mlm people like to say that people in MLM have a cult mentality - and in some instances this is true.

This is the kind of person who has lost their objectivity because their whole world revolves around their MLM. They’re gonna naturally be pro-mlm because they got “skin” in the game and they're devoted as if MLM was their religion.

Now, there is nothing wrong with believing in your company and its products - you should, but it's not healthy or advisable from a business standpoint to have blind loyalty to your own detriment

You don’t want to come off as an insane cult member - in which sadly, is how some network marketing reps come off as. 

Now that I have thoroughly offended everybody (LOL), it's for me to say this...

Either extreme in any direction is not good. Let me tell you why...

Don’t Be So Skeptical - Yet Don’t Be Naive Either

Let me just get this out the way...

Not all MLMs are scams. Keep in mind that MLM stands for multi level marketing. It’s the payment structure of the company - you are paid on multiple levels.

Some people use network marketing and MLM interchangeably - like I do. In reality they’re not the same thing. All MLMs are network marketing companies, but not all network marketing companies are MLMs. Unless a company pays on multiple levels, it’s not an mlm.

Network marketing is marketing to a network of people - usually your own network i.e. friends and family or a network you've built outside of your warm market.

So, are there bad MLM companies out there? Yes of course. No one can stop a company from using the multilevel marketing payment structure just like no one can stop a company from using a commission only payment structure.

Face It - There are Bad People in the World!

There are bad doctors, bad teachers, bad supervisors, bad men, bad women, etc…. Just because there are bad “apples” in a group, doesn’t mean the entire group is bad. With that said, there are scammy companies - that are made up of...bad people. ​

You DO need to have some level of skepticism when it comes to choosing a company. You don’t want to get all Googly-eyed when you do find a company you really like. Never lose your objectivity.

Let’s make this simple to understand. Here we go...

So, What Really is Multi Level Marketing?

Can You Advertise Your MLM on Facebook?

As I stated earlier multi level marketing refers to how you’re going to get paid - on multiple levels. In order to get paid on multiple levels you have to build a team of salespeople also known as recruiting or sponsoring.

You are paid on the sales of those you personally bring into the business and the people those people bring into the business. You are paid so many levels deep.

As you can probably guess, the percentages you are paid are small because MLM is reliant upon you building a large sales organization.

Here is the takeaway...

When you look at the compensation plan of the company you’ve joined (or plan on joining) and see the small percentages you’re going to get paid, keep in mind that MLM is designed for you to build a sales team i.e. you have to always be sponsoring people into your organization. Put another way, you always have to be "moving" products.

Now here comes the Federal Trade Commission (FTC), an organization that consists of politicians, with what they want to see. And yes, they’re cracking down on companies.

One of their chief complaints is that MLMs are primarily moving products primarily via their distributors. In other words, there is no real customer base for the products. The FTC wants to see real customers buying products - not distributors.

So with MLM you have to either sell a lot of products consistently every single month and/or build a large organization.

When you choose a multi-level marketing company, make sure you look at the products. Are there products that real people would buy? How’s the price point?

Is it competitive? Slightly higher or a lot higher than comparative products? These are very important questions you want to answer preferably before you join.

Remember you’re going to either sell a lot of products every month - which can be doable depending upon what you sell and/or build a large organization, which will take some time.

MLM=Warm Market

multi level marketing software tools

When you start talking to people outside of your warm market (friends and family), you will need some kind of marketing training. Remember that MLM (network marketing) has traditionally been a warm market type of business.

The reason being is that it was designed so that anyone can do this type of business without having any real business experience - as long as you had a warm market or network to talk to.

For example...

 * A single mom of four kids who has never worked outside of the home.
 * A 40-year old man who never graduated high school.
 * A grandma in her 70s.

You get the picture.

It doesn't matter your background or how much (or how little) education you have, you still have the opportunity to build a “business.”

This is how mlm is designed. Herein lies the problem as well...

Some People Have Great Success

I’m sure you’ve heard that everyone fails in network-marketing. Which by the way is NOT true.

There are people with absolutely no experience who roll up their sleeves and go to work. These people end up building six-figure (and sometimes seven-figure) organizations. This takes A LOT of years, a lot of hard work, and a lot of determination, and focus to do obviously - but it has been and continues to be done.

Do most people enjoy this kind of success? No. Most people won’t make the kind of money that they envisioned they would. Remember this is sales. Anyone who takes on a traditional sales business as a sole proprietor faces an uphill battle. Everyone who starts a direct sales business should know this.

In fact, there is a high failure rate among other types of direct sales businesses people start such as Real estate agents, life insurance agents, and car salespeople.

Network marketing is a reflection of other types of sales businesses. Network marketing is a business. Just because you’re able to do it from home doesn’t make it any less of a business.

Get this...

With any kind of profession, where a high income is possible, the barriers to become successful are stacked against you. The average person does not become a CEO, a doctor, the president of the U.S. etc...

In fact, only 40% of pre med students get into medical school - yet every year thousands and thousands of students still take out loans and spend countless hours and money trying to become doctors.

Why?

It’s the same reason why people start businesses and join network marketing companies. They want to achieve a goal. They want to be able to give their family a better life. They want to provide a service to other people. They want an opportunity to just better themselves.

Why are Distributors Trained to Go After Their Warm Market?

mlmipedialite

Even though MLM is touted as a business that anyone can do as long they have a warm market or network to talk to, it still takes a lot of practice to master your pitch to your friends and family and overcome the objections that you will no doubt get.

With that said, your friends and family, in general, feel an obligation to take your recommendations and look at your business opportunity (or products) - as a favor to you.

In other words, they’re easily swayed because they know and trust you - until that trust is broken, which in some cases it is when you jump from one business opportunity to the next.

The problem that comes into play is that your friends and family are not typically the right people for your opportunity or your products. In other words, you are pitching to the wrong people. 

This is why a lot of eager new MLM reps quit before they even get really started - they pitch to their friends and family, who in a lot of cases tell them they're not interested or worse yet, tell them that all MLMs are scams.

So, they get defeated and go on a mission to tell everyone they know that MLM doesn’t work because it didn’t work for them. In reality, they probably solely went after the wrong people - their friends and family. Notice the word, “solely'.

Here's the Lesson...

If you’re targeting the wrong people you WILL get mostly no’s. That doesn’t mean your friends and family shouldn’t know what you do - they should. However, it doesn’t mean you have to pitch them to death.

For example...

If you’re selling supplements and your aunt Bev takes supplements, then of course you would mention your products and how they’re better or different than what she’s taking. The problem comes when you pitch your supplements to uncle Bill who doesn’t take supplements or doesn’t even believe in supplements. He tells you "no" and you begin to doubt your products and your company.

Again, when you go after the wrong people, you will get resistance. If you get a lot of resistance you begin to think that your company is a scam and MLM doesn’t work, when in most cases, it is what you’re doing that is causing your failure.

MLM in the 21st Century

In reality, most people who come into MLM nowadays don’t want to bother their friends and family with their opportunity or peddle their products to them. A lot of people want to use social media to build their business.

Even if you’re successful at bringing your friends and family on board with your MLM, sooner or later you are going to run out of people to talk to. Not to mention, you will sponsor people who do not have a warm market to talk to or do not want to pitch their business to their friends and family. So what do you do then? 

Your team better have training that talks about how to build a business using social media (most teams have little to no training on using social media) or you must be able to point to 3rd party social media training to help them. 

If you don't help them find what they're looking for, they'll soon quit your business because they're not generating leads and in turn making sales.

Is Network Marketing Right For YOU?

The Renegade Network Marketer

Those in MLM will hate me for saying this but...

Multi level marketing is not right for everyone.

It is sales obviously, but it's not hard pressure sales. ​Think of the influencer who makes videos talking about makeup and demonstrates various products.

​They are educating and giving tips and helping people understand how their products can help someone solve a problem or fulfill a need or want. Make no mistake about it - subtle as it may be, they are selling you.

Here are some of the Cons of MLM:

 * Every network marketing company has rules you must abide by or you can lose your distributorship and/or be sued by the company. This is no biggie because everywhere you go in life there will be rules you must contend with. We're all use to rules.

 * Some MLM products may be harder to sell than others. This is why you should always be a consumer of the products you sell - even if you just try it once. It's hard to sell something you've never tried.

 * It takes years to build a solid team and it takes leadership skills in which you must develop if you don't have them.

If you're not in for the long-haul then don't join any kind of business especially a network marketing business. With most traditional businesses it takes 2-3 years in order to see a profit. In network marketing it can take a much shorter time, depending upon your business and how you work it.

Here are the Pros of MLM:

* The products are already created for you and customer service is taken care of by your MLM company.

 * You don't have to ship products or stockpile them in your home.

 * You can build a substantial business from home working just part-time - but it takes time.

 * You're part of a team of people helping you build a business - you are never alone to do it all by yourself.

So, why would anyone join a network marketing company?

Because they don't have to worry about creating their own products and dealing with customer service and employees. There is also very little to no overhead costs like rent - in fact there are deductions (in the U.S.) you can utilize as a home business owner.

And unlike a franchise, there are no royalty fees you have to pay. From a financial standpoint, network marketing makes more sense than a franchise in most instances - especially as a first-time business.

But you have to know what to do...

Why Multi Level Marketing Training is Needed

good mlm company

The difference between success and failure for a lot of people in the network marketing industry has been training - the right kind of training.

Don’t get me wrong, there is a place for training that helps you work on your motivation, your “posture”, and your belief in the network marketing industry.

However, at the end of the day, after all that rah-rah training and motivation, you have to get people looking at your business opportunity and its products if you ever hope to make money.

You are in business to make money - right?

Not to mention, the day you sign up for an opportunity and buy your products or distributor kit and get on that autoship, you’re already in the hole.

I literally spent years running around from motivation training calls and webinars - to more motivational calls and webinars. I was told by leaders in my company (at the time) that I needed to walk around shopping centers accosting people to pitch them on my opportunity.

Yucky!

It wasn't until I was shown the "how" to generate leads and build a proper business that I began to make money.

If you've been spinning your wheels and running around like a chicken with its head cut off (a bad visual I know), then know there is help available to you.

It's like this...

IF you don’t have real solid training on how to generate leads for your business or use the funded proposal model - you’re going to either end up thousands of dollars in debt and still have no clue as to how to build your business.

The Internet is littered with people who are brokenhearted and broke - because they failed to get help when they needed it. Don't be one of those people.

This is why I recommend myself and this program together so I can help you achieve better results in your business.

At least give yourself a fighting chance to have success.

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