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MLM - 10 Things You Need To Know

If you’re like me, you probably get dozens of emails a day offering the next greatest program that’s just been released touting the newest method to ‘get rich quick’ on line. If only this were true. While dedication and a lot of hard work can result in your earning commissions – any program should be reviewed and investigated before moving forward . . . particularly if it requires an initial monetary investment.

Affiliate programs are probably the most well known and easily understood; however, if you’ve been tempted by the promise of quick bucks and having ‘recruits’ work and earn money for you – you’ve probably been looking at an MLM program. (MLM – Multi-Level-Marketing). Some of the more recognizable MLM are Mary Kay, Watkins, NuSkin, and Pampered Chef to name a few.

How an MLM Operates

There are two ways the MLM independent distributor, sales person, agent, etc. develops their organization:

  1. Building an active customer base who in turn buy the product directly from the company – typically one level
  2. Recruiting a network of independent distributors contained under their ‘distributorship umbrella’ who in turn sell the product – multi-level

How Money is Earned

  1. Monies are earned from commissions based on sales, and from sales made by the agents inside the distributors ‘umbrella’. These agents in turn can solicit agents to work ‘under them’. You can see how this program can easily be labeled ‘pyramid’ with individual distributors at multiple levels receiving royalties from one person’s sales.
  2. Making sales from products purchased wholesale from the distributor

While MLM companies have received their fair share of attention regarding controversy and their similarity to pyramid schemes – which are illegal – not all MLM programs fall into this group.

So, how do you decide which MLM is the best?

  1. Review the product or service offered by the MLM making sure that it fits the MLM model. In most cases, consumers will need – and want – a little information and explanation before buying a product. You also want to make sure that you are generally impressed with or inspired by the products and/or services you will be selling when you join a particular MLM company. Your enthusiasm is a big contributor to how successful you will be.
  2. Take time to talk to other distributors. Ask questions… do they have any complaints? are they paid on time? do they receive support?
  3. Know and understand any restrictions or Terms of Use.
  4. Do some homework. Look at the residual income you expect to be earning. Top MLM companies will not offer just single-sale commissions on products and/or services but instead will offer you recurring commissions. They will also offer you recurring commissions on the members that continue to come into the company under you.
  5. So now you’ve found a great company which has a compensation plan that fits what you’re looking for. . . next, check to see if the company also has worldwide presence. This doesn’t have to be a tip-top priority but MLM companies with vision for the future should have going global at the top of their list.
  6. Regardless of the company you choose, at some point you will need training and support – there’s always a learning curve. This time can be reduced if there is timely support from the company. A good MLM should also provide the tools and training that you need in order to get a quick start growing your business. Look for an MLM sponsor that has good feedback on resolving disputes and technical issues right away.
  7. The initial investment and start-up fees vary greatly from company to company. The important factors to consider is how much money do you have to invest without creating a burden on your budget. You also should consider how fast you are able to get your investment back. Check out incentives, bonuses, etc offered to new members.
  8. Treat your MLM business like you would any job. Be willing to make a reasonable time commitment. Most affiliates and MLM programs understand that new members are probably busy with other jobs and family priorities early on. Look for an MLM that can provide help and information from the beginning that allows you to get started at your own pace . . .not at theirs.
  9. Make sure the MLM you decide on tracks all of your sales and sponsorship data so that you can have it at the tip of your fingers. This information should be easily accessible so that you can see what’s happening, where you need to improve and how you can set goals for yourself . . . and your team. In the long run, having this all of this information at hand will save you time.
  10. Finally, don’t be in too much of a hurry. Take time to investigate every aspect of any MLM business you consider. You may even want to consider using a close friend as a sounding board – sometimes an objective opinion can be very insightful.

Scam Alert:

Received a letter in the mail last week from an independent company trying to sell me the .net and .org versions to one of our .com domains. Problem was that they were offering to sell them to me at $50 per domain. Yes, each.

Don’t be scammed by those that would use scare tactics to sell you a domain – .com, .net, .org, etc. If you want to expand your Internet presence, do it the easy and cost effective way through a legitimate registrar such as Go Daddy.

Final thought to this situation – if someone other than yourself registers your domain, you are leaving yourself wide open to having that domain being held hostage in the future.


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