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Network Marketing
You have probably heard claims that you can make millions in network marketing! At the same time, you probably thought that you were hearing a pitch for a pyramid or Ponzi scheme. We are all now familiar with Ponzi schemes thanks to many unsavory individuals, like Bernie Madoff. Madoff’s sophisticated plot illustrates that Ponzi schemes can be very clever. So how do you tell the difference between a Ponzi scheme, a pyramid scheme, and a genuine network marketing opportunity? It’s simple: if participants are paid primarily from money received from new recruits, or if they are required to buy more product than they are likely to sell, then the company may be a pyramid or Ponzi scheme, which is illegal in most countries. A Ponzi scheme is a system whereby money from new investors is used to pay earlier investors whereas network marketing always involves a product which will generate most of the revenue. Now that you know how to spot an unsavory scheme, you can assess if network marketing is for you.
What is Network Marketing?
Also referred to as MLM or “Multi-Level Marketing”, network marketing is a business model quite similar to a franchise. Rather than moving a product from manufacturer to warehouse to wholesaler to retailer to end customer, network marketing companies use a network of independent individuals to market and move products directly from the manufacturer to the end customer. One of the most famous examples is Tupperware. Compensation plans may vary, but typically the individual earns a commission based on independent sale efforts as well as the leveraged sales efforts of a “downline.” Downline is the term given to all the individuals you recruit. Each new recruit that a distributor brings into the organization is, in turn, encouraged to bring in his or her own recruits. Eventually an active distributor develops a hierarchical substructure known as a downline that can be viewed similarly to an organization chart. In this way, there can be multiple levels of people receiving royalties from one person's sales, just like a franchise. A downline of other independent marketers are built below you and you earn a percentage of their combined sales. That being said, in a legitimate network marketing company, no money may be earned from recruiting alone.
Is it for you?
Many in the industry regard network marketing as a business education—one that you won’t find in a university affiliated business school. If you have always wanted to start your own business, you might consider network marketing as a way to fulfill your goal. Network marketing is a small business model and attracts those with an entrepreneurial spirit. Even if you do possess an entrepreneurial spirit, you still need to consider your personal skill set before diving in. Are you ready for hard work? Are you comfortable making cold calls and speaking in front of people? Are you qualified and prepared to be a business owner?
User Comments:rick
Aug 2, 2011 4:17 PM
avoid mlm at all cost... especially acn
Kim
Jul 28, 2011 4:22 AM
I've been in several mlm's and I love it. Most people that join mlms, do not realize that they actually have to WORK the business. The ones that drop out and cry Scheme, are normally the ones that put a few hours into it and stop,they don't follow the training,They don't stay in contact with their leader, They don't ask for training help from their leader,They don't keep learning/expanding their skills so that they become a top leader themselves. If they were to get a job somewhere, and show the same amount of slack in their work ethic, they would be fired, yet they cry Scam, when it comes to mlms. I would tell anyone thats reading this, if you are interested in joining an MLM, First realize that it is a JOB...Your JOB.You are the owner and if you don't do the work, then it don't get done, which means you don't make any money. If you don't work it, you won't make any money.It's that simple. You need to learn about your JOB, What are the products,when did the company launch,What about all the training and support...Everything....KNOW YOUR BUSINESS from front to back. And you need to train others to do the same. If you don't know your own business and how it works, then how can you train others on it. Make sure you can afford the costs involved in an MLM because if you want to succeed, you are going to have to pay the monthly cost for awhile. It could take you a month, it could take you a year, it could take you 5 years before you are making the BIG money. So Keep that in mind.And if your not willing to work it the right way for atleast a year, then you don't have what it takes to become wealthy in an MLM and you should rule out joining one. Also,Think about the economy...if it costs $200 to join your company, how many people are able to pay that much on a monthly basis. Always consider your prospects. Also, A big one...I suggest putting yourself on a 5 year plan to success. Don't go into an MLM and think that you are going to get wealthy within a few months.Because that RARELY happens. If you think that 5 years is too long, then just think about your life right now, and picture yourself staying at the job you have now, and the $1 raise a yr. that you might get...Now ask yourself if joining an MLM and working it with a realistic 5 year plan is better than being in the same situation that you are in now, with your JOB 5 years down the road. The difference between a successful MLM'er and one that fails at it, is simple. Its all about the mindset. Being realistic in timeframes to accomplishment,Realizing that you have to work harder for yourself than you do for an employer,Continue to learn thru personal development,And deciding that you will not give up on your dreams and that you will fight hard for them. And to realize that you shouldn't listen to friends and family members about MLM's when they don't live the lifestyle that you want. A good way to look at friends and family that say NO to you...Smile and say,Thank you very much, and move on because there's plenty of people that are interested in this world...It's just up to you to find them. Think of it this way, friends and family even tell girlscouts NO on their cookies! And yet those little girls don't give up...They will move on to the next person, SMILE, and pitch their cookies again! Most companies have training to teach you how to find them. Just stay away from buying leads Those never work and you will go broke fast buying them. Another thing that seperates success from failure in MLM's...people claiming they had poor leadership. If you end up with a leader that isn't teaching you what you need, Make friends with other people in the business and learn from them as well as on your own. And Don't let your leader's Lack of Knowledge stop YOU from becoming Great at your business. All of the training and information is at your hands, Take it upon yourself to learn it all and decide to be a better leader to your downline, than your leader is to you. Saying you failed because of having a poor leader, is a sorry excuse. It shows lack of leadership within yourself, for not taking control of your business and learning it on your own. May sound harsh, but if you listen to me, you will be an amazing MLM'er!
Mario
Feb 17, 2011 12:20 PM
You need to stay focused and work at it. It does pay off but like anything if you do not work hard you will not get anywhere. This is a network marketing program I became a part of a few months back and its going well.
http://travelworldwide.worldventures.biz/
http://travelworldwide.worldventures.biz/
JCHE
Feb 2, 2011 7:31 AM
I see MLM as anything else you get what you put in... work at it learn and grow and find a strong worthy ideal and stay focused on it and you will see success in any feild will be eveident...and this whole rant about pyramid schemes is foolish some are schams yes but every job anyone will ever "work" and i say work as in be an employee is a pyramid one guy at the top not much in the way for promotion and you can never be the top dog...
JCHE
Jan 27, 2011 2:57 PM
I see MLM as anything else you get what you put in... work at it learn and grow and find a strong worthy ideal and stay focused on it and you will see success in any feild will be eveident...and this whole rant about pyramid schemes is foolish some are schams yes but every job anyone will ever "work" and i say work as in be an employee is a pyramid one guy at the top not much in the way for promotion and you can never be the top dog...
waltsense
Nov 13, 2010 12:40 AM
It always seems like the people are the car salesman of business people. The top dogs are smooth seller, and they have to sell it like no other to the rest of the dogs. People are now promoting energy drinks, facebook ads, etc - it's all a reach except for the people running the scam. Legit MLM type businesses like Avon and the such can work, but my two cents is make your product to sell or take that energy to the workplace.
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