Multi-level marketing (MLM) has one of the worst reputations in the marketing industry. Tell someone you’re involved in an MLM opportunity and they automatically assume you’re either selling snake oil and fake antiaging products or trying to involve them in a pyramid scam.
What people don’t understand about MLM is that it’s a legitimate business model. Big brands like Avon, Mary Kay, and Tupperware have been using MLM for many years.
One of the reasons MLM has such an unsavory reputation is due to companies using this method to sell fake products. It’s like the bad egg metaphor—people assume one bad egg means the rest of the carton is full of bad eggs.
However, if we judged a whole business model because of a few terrible outliers, then what business model would pass our standards? Many companies using social media marketing fail to turn a profit, but that doesn’t mean social media marketing is an ineffective marketing technique. With the proper research (check out business journals or legit MLM business review websites), you’ll be able to determine which MLM opportunities are scams and which are real business opportunities.
In this article, we break down more of the myths and misconceptions surrounding MLM. Read on to find out.
MLM is a pyramid scheme
Contrary to popular belief, it’s not the pyramid structure of a pyramid scheme that makes it illegal. If it were, then many institutions would find itself outlawed, such as the US government and the Catholic Church.
No, what makes pyramid schemes illegal is that how they run it: First, you invest money. Then, you recruit people so they’ll invest their money, which is then your return on investment. After that, you recruit more people so you can pay off the first set of recruits. And then you recruit even more people to pay the second set of recruits. This goes on and on until people start realizing that they’re never going to make a profit.
While MLM has a pyramid structure, it is not a pyramid scheme. You’re essentially becoming a retailer—you invest in products that you’ll sell at a higher price. The Federal Trade Commission makes it clear that MLM is a legitimate business opportunity. It’s true that you earn from recruiting people—you get a portion of the commission for every sale made by your recruits. However, that portion is more of an incentive than a source of income. Your main concern is selling products.
Multi-level marketers only sell overpriced, ineffective products
Certainly, there are companies who use MLM to sell fake, overpriced, and even dangerous products. There are also companies who do that but who don’t use MLM. It’s not MLM that’s the problem—it’s the people who use it.
If you’re interested in MLM opportunities but don’t want to sell shady products to your family and friends, then it’s a simple matter of research. Legit MLM business review sites like networkmarketingnow.com and organizations like the Better Business Bureau provide information on many different companies and their legitimacy.
Choose a company whose products you believe in. A safe route is always to go with an established brand; they’re not likely to risk their reputation by shortchanging their own distributors.
You can’t get rich with MLM
Not everyone succeeds at multi-level marketing. Some people discover that they don’t have a knack for direct selling when they’ve already invested in products. Others use MLM as a side business and can’t dedicate a lot of time on making sales.
It’s not the setup of MLM that’s stopping people from getting rich. Again, multi-level marketers make their income from commissions. As long as they’re selling, they’re earning.
People who are new to face-to-face marketing can be quick to give up. However, sales talk is a skill you can develop. If you want to try your hand at multi-level marketing, remember that the trick is to never give up.
As Winston Churchill puts it, “Success is walking from failure to failure with no loss of enthusiasm.” In fact, most inspirational business quotes focus on that very idea: that failure is a necessary step on the road to success.
If you want freedom over your own time and opportunities to meet new people, then you should definitely consider multi-level marketing. All these myths and misconceptions are easy to explain to anyone who doubts your decisions.
Getting people to understand that MLM is a real opportunity might seem daunting, but it’s worth it. The more you convince people to see the truth, the more they’re likely to reconsider their own opportunities for growth.