Consider This before Starting a Multi-Level or Network Marketing Business
At some point in life, you will have been heard of some multi-level marketing (MLM) or network marketing business opportunity.
Although incentives vary between companies, it usually offers the chance to ditch your 9-5, fire your boss, sell products you believe in, establish your own business, make lots of money, upgrade your lifestyle, potentially win a car or free trips, and make new friends in the process. And who doesn’t want these?
People like MLM because of its low barriers to entrepreneurship. You’ll access training, an established system, support, and ample encouragement along the way. And the overheads are low with no large capital requirements or specialist qualifications required. Being a home-based business can also provide tax advantages.
Sounds exciting, right? But like any investment of time, money, and energy, you need to be aware of what you’re getting into and do your homework.
How MLM works
A sponsor or mentor will teach you how to sell the product and earn a small commission from your sales. MLM compensates you for the sales you make, and the sales of others you recruit this creates a “downline” of distributors and a hierarchy of compensation levels. So, the more people you recruit, the more commission you make.
Why do companies choose the MLM structure?
- No advertising. It’s challenging for companies to get their products and services “above the noise” using traditional, expensive advertising. MLM distributors sell the product through word-of-mouth to friends, neighbors, colleagues, and others online.
- No staff benefits. Distributors are a sales force that works without benefits-for example, superannuation and health insurance. And of course No retail outlets and overhead costs.
Four success tips
- Keep your current job while slowly making the MLM transition. MLM is not a get rich quick scheme and success is not easy. You need to embed success habits like discipline, hard work, organization, self-motivation, and daily actions like hard sales. Treat it like a business and listen to those who’ve succeeded.
- Believe in the product. Don’t just do it for the money or the chance to create a business. It’s unsustainable. Ask yourself these questions:
- Do you have a passion for this product or service? Has it genuinely made a difference to your life?
- Is the product superior to a cheaper but comparable retail product?
- Can you talk about this product in your daily life such as picnics, the hairdressers, barbeques, and even when you’re tired?
- Are you comfortable mixing business with friendship? People may not want to hang out if they think you’re always going to pitch them. (My website is positioned to attract people who are interested in my offer. I try to build trust and give value by providing high-quality free information. So I don’t feel the pressure to pitch people at social events.)
- Are you comfortable with the long game? Many MLM companies promote a three-to-five year plan towards financial freedom. But it could take ten years. And success is not guaranteed. Are you comfortable with that?
- Have the time and focus on it. MLM won’t work if you’re busy with young children, already busy with another business or a demanding career. MLM is ideally suited to someone without a job or who wants a career change but has been unsuccessful in finding alternative work.
4. Running more than one business is not a good idea. The old proverb says, “If you chase two rabbits, you’ll catch none.” Unless you’re Richard Branson-who has a huge team of support specialists-success normally comes from doing less but better. The difference with Branson is that he has the funds to invest in strong teams throughout each business.