Why is multi level marketing derived by the majority of people online - feedback appreciated!?
I have been involved with network marketing on and off for a number of years with some success and some failure and as I travel the internet I observe a high level of bad press and criticism for the MLM business model. What experience do people have and what shapes your opinion?
I've been in MLM since the early 90's and my experience has been good and bad. what I have learned is that the majority of MLM companies require too large of a upfront startup cost or a unnecessary monthly fee to be involved. Also, the products are over priced. Who ever heard of juice costing $25-$50.
As result of my experience, I've searched and found opportunities that are free and provide services at normal market prices.
I have tried a couple of MLM programs but never stuck with them. Most MLM programs seem to be more about redistribution of funds (pushing money up the ladder) than about offering a quality product at a great price. I think the reason MLM programs are initially so attractive is because they seem to offer the opportunity to make a lot of money with little work. In reality, I have found most pay out little and require a lot of work trying to get new members to join.
Thank you for the responses. I'd agree with all actually - in different ways.
I believe most people join an MLM with the dream of becoming one of the small percentage who do make a significant income from the business model - either by building a very large team of distributors or by being involved with a company which has a model based on big up front commission payments to business builders. As we know this is less than 3% of people who are able to achieve this but the other 97% start out with the dream.
There are many products which are clearly over priced and these models are I believe money programs - redistributing the profit from an over priced product to distributors. It could be argued that this also happens every day outside of the MLM model in the real world too.
Go for a meal in Manhattan and you are likely to pay a lot more than if you buy a burger in a small village in the middle of Ireland. The higher priced meal is still purchased in Manhattan and the profit is much larger but distributed to an invisible shareholder and not some up and coming MLM guy from down the street and for this reason its easier for many to swallow and is never labelled as a scam - even though the meal might cost several hundred dollars?
Thanks for the comments.
I have been in and out of MLM business' for the past year and a half. I have had more failures and programs that just die out than successful ones. I think if you are wanting to get into MLM you either need to start one yourself or be one of the very first people into it to make a big impact on the financial side of the house.
Actually most of them ARENT scams. MOst people who believe that alot of companies are scams arent very educated in MLM and other types of marketing. Most companies that are to be percieved as scams actually end up going out of business because of whatever reason
found your article interesting because I’ve looked into MLM’s but decided against getting involved for a variety of reasons which have no place in this discussion.
I had to respond to your comment about a burger in Manhattan.
“Go for a meal in Manhattan and you are likely to pay a lot more than if you buy a burger in a small village in the middle of Ireland.” Of course the cost would be higher in Manhattan – the business expenses are much higher there also. What do you expect? What does that have to do with MLM’s?
The MLM business model deserves its bad rap.
With the low commissions plus the typical autoship requirements, it is hard to even break even. Why? Even if you do sign some people up, they rarely recruit anyone else and drop out within 3 months or so on average. So by the time you sign up people, you have to replace them, so there is rarely the promised growth or residual income.
Of course, what makes it worse is all the false promises and poor training. Most training programs just end up losing you more money.
Worse yet, MLM companies tout their business as being a stand-alone business opportunity. This is pure hogwash. All distributors should be building a direct marketing platform first and then plug into that platform various income streams. An MLM, if ventured into, is merely an income stream for your overarching direct marketing business.
Virtually all successful marketers have their own front-end product or at least viral marketing program or system with a training course. That way, they can recruit their own affiliates to sell their front-end product. This is important because they can seek out and find affiliates and have them join their own business for free in order to promote the front-end product. This is not possible with MLM's because MLM's generally require all distributors to buy something in order to participate in the opportunity.
And when you have your own front-end product (or just forego MLM completely) you either make all 100% or 100% minus only what you pay your affiliates.
So successful marketers build their own business first based upon their own product, training course, marketing program, etc. And if they do promote an MLM, they do it on the back end as opposed to trying to promote the MLM as a stand-alone business.
All of what I just wrote is rarely taught by MLM companies. They are selfish, horrible at teaching and inevitably lead most people to lose money.
I'm not specifically opposed to MLM, but the original premise of MLM was that it was a great way to leverage your time.
Nowadays you can leverage your time much more easily without the headaches of managing people via automation and outsourcing and without the risk of being dependent on some OTHER companies success or failure in managing their own business.
I think a lot of people still don't realize the insane level of automation that is possible online.
I honestly dont understand why mlm doesnt work very easily. There are a lot of things people do wrong but when i realized that the key is everybody doing thier small part there is so little risk i just dont see why people dont just do it. the company i am with is good and the products upline support and training is good, there are no starter packages to get money from you knowing most will quit, no costly training info it is a really great company.but i got into mlm for 1 reason to make money. i need to spend 49.00 amonth to recieve commisions. once i am making 49.00 a month i am in biz for no cost, and with some tax advantages it really is costing me about 30.00 a month and i am getting excellent products. starbucks is lined up all day selling 2 dollar cups of coffee i am spending 1 dollar on a nutrition product that is 7 supplements in one all of high quality. if i get 5 others to do the same and every one who joins spends 30 and gets 5 to join, everyone will eventually make over 100k per year.it is a mathematical formula and it will work if people just do it, i have my own business and it costs a lot to be in business and requires a lot of time doing payroll taxes etc. 30 a month is nothing to get something of value and to be able to build this opportunity. i have no magical way to make this work, i just personally think it is the best biz model there is and the only reason it isnt easy is people, i really think they just cant believe it could work so easy. if you have any interest my email is email@example.com
Each business has its own pros and cons and multi level is no different than any other business. The problem with the MLM is that you are always looking for people whom you can convince to join your network. It's not easy to find people to join the network unless you have patience and persistence. Most people leave the MLM when they can't find people to join their network and then they start calling it a scam.
Here's my two cents worth...
I don't think it's the MLM/network marketing business model that's the problem. It's a proven model that makes a lot of people a lot of money.
In my opinion, there are really only three big problems with MLM:
1. A lot of people don't treat it like a business.
2. Many think of it as get rich quick -- which it isn't -- then they don't stick with it long enough to make a go of it.
3. There are a lot of unscrupulous people that seem to gravitate to MLM (probably because it's a very lucrative business model). These sharks recruit as many people as possible, squeeze as much money out of each recruit as possible, and fail to help them find their own success.
It's really a shame that this type of business gets such a bad rap... but totally understandable.
So if you're thinking about getting into an MLM/network marketing business, DO YOUR HOMEWORK.
Research the company, the products, and the sponsor that you're considering to make sure that everything is exactly what it seems. The internet makes it really easy.
Network marketing isn't always as easy as some make it sound, but it's worth the effort once you get going!
Here is my thoughts on your question and my answer results from a number of years experience.
1. People "quit" for a variety of reasons though I believe they mostly relate to a quote from Tony Robbins: "Desire to avoid pain is greater than the desire to attain pleasure". The pain being "talking to people" on the phone or warm market or "learning a new skill", such as "marketing" (especially internet marketing). The pleasure being attainment of a nice residual income.
2. People have unrealistic expectations about MLM or network marketing and do not fully understand it is a business for which skills must be aquired. People that do not have a true warm market because of location, personal circumstances and personality may inhibit them from success in mlm. Warm markets are responsible for many of the fortunes made in credible mlm companies, with the exception of those that have learned advanced internet marketing skills that allow for a great amount of automation resulting from front end and back end sales to fully benefit from target readers of ads, etc.
Trying to be succinct, but not always doing so . I hope I have made a point.
I think network marketing is truly awesome, but does get a bad rap understandably so if not just by looking at the stats.
There are many misunderstandings about mlm. Its too bad really that so many opinionated people have these negative opinions with no real basis except when applied to unethical companies (that do exist).
One is simply the description of what mlm or network marketing is ~ that is it is just a distribution methodology of goods that eliminates some costs of traditional business structures and passes this to the participants in forms of compensation or responsibity.
Further MLM is a plan that requires participants to be a consumer of the company product(s) and share with others (products/opportunity) in order to be compensated. Simple, but still there are skills to learn.
Thankful to be a Networker!
I agree with many of the replies here...I throw in my added 2 cents. When recruiting, so many focus on the "big money". Prospects are shown how much money can be made, or how simple our system is, or "by following this simple system, Joe X made 100K per month after only 6 months". The bad rap seems only natural.
I wrote a hub entitled "Always Look at the Bottom" My hope is to change the perception of MLM, help it to be the geniune business model it was meant to be, and not a get rich quick idea!
People assume that MLM is a get rich quick plan that requires little work. So when they do nothing or very little and make very little money, it is the business that is at fault instead of their laziness. Would people say that the McDonalds or Wal Mart business plan do not work? Think about it: someone from each of those companies had a plan and a product. They started a company then showed someone else how to do the same thing. And on and on the business continued. Is this not similar to MLM? MLM is a business model. Why people feel that they can own a business, not do any work, and still make money is beyond me. It also bugs me when people feel that if they have to put money up to start the business then it is a scam. What business do you know has zero start up cost? I guess paying 200,000 dollars to buy into a franchise is better than paying 200-500 dollars for a similar business model.
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