Does network marketing work?
Absolutely. The distribution system is very effective regardless of there being a compensation system or not. Word-of-mouth advertising is the most effective form of any advertising. Any time you recommend a product to a friend, you’re doing network marketing (You’re just not getting paid for it).
Does MLM work?
Yes. Not everybody is successful, but everyone gets the opportunity to be succesful. Products are distributed for billions every year via MLM. It works very well.
Is it legal?
Yes! Direct sales regulations are already in place most countries. They have been almost 50 years if not longer. And by the same token, the very same regulation outlaws pyramid schemes, Ponzi schemes and chain letters.
But beware, there are scam artist who
MLM sounds a lot like a pyramid schemes?
True! There’s a bunch of confusion out there about the difference.
The distribution system is so effective that there are a lot of scam artists who don’t bother creating a real product to distribute, so they pay people based on recruitment of new people. This is a Ponzi scheme. Beware of those.
Just like in any industry: some companies sell outstanding products, other companies with no scruples try to screw you. The multi-level-structure is just a more efficient way of going about distributing goods and services.
What’s a Ponzi scheme?
Wikipedia describes it as: A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from profit earned by the individual or organization running the operation. The Ponzi scheme usually entices new investors by offering higher returns than other investments, in the form of short-term returns that are either abnormally high or unusually consistent. Perpetuation of the high returns requires an ever-increasing flow of money from new investors to keep the scheme going.
How do I choose a company?
Great question! Most people choose companies just based on the product or compensation system. It could be the biggest mistake of your career. Let me elaborate.
You shouldn’t choose a company based solely because they have the “best” product. What will you do when a new, better product hits the market?
You shouldn’t choose a company based on the single criteria of having the “best” compensation system. What will you do when another company pays .3% more in a residual global pool?
Instead, you should choose a company based on them having a product you use and a culture that you support. Also make sure the people involved are the kind of people you could consider close friends, because you might be around the same people for a long time, while you enjoy your mutual success.
Also, take a look at the compensation system and understand how it works – the compensation should be fair for the top leaders, so they have an incentive to remain in the company to develop new leaders. And the payment structure should also be fair to new distributors. They should be able to be compensated fairly from the start.
So there is a lot of factors with choosing a company, and products and compensation are just a few criteria. Our best tip is to choose a company based on the people who work with the opportunity.
How much money can I make?
In most reputable companies the payment is based on the total sales volume created. Therefore the size of the commission check is nearly unlimited.
Which is the best company?
Can’t say. Best in what area? Opportunity.
Best is often based on which type of products you use and are willing to recommend. Chances are that you have a better opportunity for success, working for a company that has a cause you believe in, instead of focusing on the compensation plan or products.