Network marketing (sometimes called Multi Level Marketing, or MLM) is a low cost, low risk way of having your own business. Most people join network marketing for an extra income, though it is possible to earn a substantial income, even on a part-time basis.
Before joining a network marketing opportunity, we recommend that you do your research and join a good company. Here's some important questions to ask yourself:
- Products / Services: Are they reasonably priced? Are they decent quality. Is there a large potential market? Are at least some of them consumable? Is there a guarantee?
- Company: Have they been around for a long time (at least 5 years) and have a good track record through various economic conditions?
- Is there a support system in place for new distributors?
- Is the startup cost reasonable (shouldn't be any more than £200).
- Can you make profit quickly (within your first couple of months)?
- Does the person you are considering joining with have some success? Will they be available to help you get started and provide you with the information you need to be successful?
- What is the growth potential? Local? Nationwide? International?
Pyramid Schemes
- Principal income comes from from recruiting. Income from retailing is incidental or spurious
- Distributor is locked into a position in the Pyramid. Usually they can’t pass their sponsor
- People at the top make the real money — until the Pyramid collapses. A “Ground floor” opportunity really means a “downhill” opportunity… everyone who joins has less opportunity than the person who recruited them
- Income from products is based on discounting on a sliding scale. In reality, this means that prices get higher and higher until impossible to sell
- Products are not important. They may or may not work well. In reality, this acts as ‘bait’ for the recruiting ‘hook’. Usually there are no guarantees, products are non-returnable, no investment refunds. In fact there may not even be a real product
- There is real financial risk here, especially for those at lower levels, as non- returnable products become harder to sell to your downline or at the retail level to customers
- Main appeal is for selfishness, greed, envy and laziness.
Network Marketing
- All income is earned from the retailing of products. No income is made from recruiting
- Distributors are not locked into organisational structure. They can pass their sponsor and upline distributors based on personal achievement
- Anyone can earn top money — based on personal achievement, not their position in the organisation. The business opportunity improves with time and exposure. Based on sharing an opportunity for genuine financial independence through co-operation and teamwork
- All income is derived from product sale commissions and bonuses according to personal effort. In the best MLM plans, all distributors buy products at the same price. Performance bonuses reward higher achievement
- Products are all important because repeat sales are the key to success. Products are guaranteed to perform and satisfy or money is refunded. The distributor’s stock can be returned for a refund in most companies
- No financial risk. No money is paid for recruiting and the products are returnable for a full refund
- Appeal is to nobler attributes — sharing, helping are among the better aspects of MLM companies. Top achievers typically help others and rewards follow naturally
To view a list of Network Marketing business opportunities, please click here .
