Tweet

Do MLM Companies Work For the Average Person

Guest post by: Jason Bronson

Article Overview: An incredibly wide array of products and services has been sold through the system of direct contact with a consumer, and getting the consumer to begin to market the item or service also.

Do MLM Companies Work For the Average Person

Multilevel Marketing (MLM Companies) are sometimes referred to direct sales companies or network marketing, and have been around for a long time. An incredibly wide array of products and services has been sold through the system of direct contact with a consumer, and getting the consumer to begin to market the item or service also. A chain or downline is created, with each sale benefiting the person above.

That Sounds Like a Pyramid. I Thought Those Were Illegal.

As long as what is being marketed is a product or service, and not the compensation plan itself for money, the MLM company is legal. If money is taken to buy a place in the downline and no product or service is exchanged, the plan is an “illegal pyramid”.

What Are the Advantages of MLM?

With products or services sold in a store, most of the revenue generated goes to overhead – salaries and wages, rent, maintenance, and many other operating expenses. This takes a healthy chunk out of the profit which is usually made up by increasing the price of the items. Generally the owner makes the most money because of his or her responsibility to the organization; less wages are distributed to the employees depending on their responsibilities.

Any store owner will tell you that he or she is harnessed to the business and spends an incredible amount of time just to “make a go of it”. And employees are limited to the amount of money they can earn.

MLM takes the overhead expenses out of the business by making the operation home-based. There are many advantages in working from the home, among those being tax write-offs, no overhead, small or no inventory, no commuting, and the freedom of working hours that work for you. And there is no limiting wage or compensation. Each person has the same opportunity to make as much money as he or she wants.

What is Network Marketing?

Simply stated, network marketing means helping others to be successful makes you successful. As you recruit others to sell the product, their sales add to your income. The compensations do not come from the downline sales – everyone gets the same mark up on product - but from the parent organization. Therefore, it is to your advantage to train and support those in your downline. It becomes a community effort where everyone wins.

How Do I Choose a MLM Company?

Do some research with the Better Business Bureau, an online listing of top companies is available, talk to others in the business, and most importantly, choose a product or service that you can become passionate about. Your enthusiasm goes the greatest distance, even more than the hours you dedicate to the business.

Don’t expect the glamour of the get-rich-quick stories to apply to those who do not want to dedicate the time and energy required. As in any start up company, it takes time and attention to build a successful business. It’s really up to you.

Related Articles
  Profitable Online business Ideas and the Recession; Increase Your Income
  Using Your Time
  Those With the Best Talent Win
  How to be a millionaire
  Small businesses turning to contractors

Article Tags: array, average person, direct contact, mlm companies
Referred by: http://jaykubassek.com



Related Forum Posts
2007 Goals - My yearly goals for December 2007: 1. Add 10-15 new "ideal" clients to our client roster 2. Increase revenues by $500,000 3. Average at least 1 paid speaking engagement per month.
Profiling Famous Women Entrepreneurs - Great suggestion Leanne! The PROFIT Companies are always great sources!
Re: Are Business Owners too Old School to be Sold by a blog - [quote:140e27hj]Customers Pick Static Documents over Blog Entries 8 to 1 on Average[/quote:140e27hj] Interesting study. Just as a commenter said on your post... don't call it a blog. I agree.
Re: 40 cents per dollar is spent in a franchised business - Hey Ringo, In general terms the location itself isn't even looked at until the franchise agreement is signed and the fees are paid to the franchisor. Then and only then do they start looking for a location. This is common practice and with the plethora of commercial locations that are available right now we are seeing landlords bend over backwards on negotiations to get a good tenant. That being said, the area is what the franchisor will look at on the demographics, they won't generally put a franchise in an area just because a buyer wants it there, most times the buyers have a preconceived notion of what they consider "the right spot". The franchisor has the data to support specific demographics, so that is where the help comes into play. The due diligence items I recommend looking into prior to buying are: 1. Average Expenses. 2. Average Revenues. 3. Litigation. 4. Business model. 5. Training. 6. Existing franchisees. Most of the time once you get through those things the rest is easy to get through. You need to know how much it cost, how much you can make, what is your exposure legally, is the model right, who/how are you trained and talk to as many existing franchisees as you can. You are looking for consistency. There is absolutely no way that every single franchise owner is happy with the home office, it is just impossible. You are looking for consistency, hearing the same things in general. Numbers, support, training, advertising, marketing, ongoing training, growth, industry etc... If you don't hear consistent things, most likely the model isn't working in all markets or there is something else affecting it like industry or distribution or training.
Respect?!? - Hi there, A successful business depends on ongoing series of transactions. This inlvolves people. To what extend is respect important? When one thinks of himself alone, like me, me and me, how can respect become real? How many types of respect can we come up with? I think of a few: Respect of disagreement can be one. Then there is Respect of the Customer. Respect of position. Respect of 'Older Person'. By the same token, Respect of the 'Younger ones'. etc..... Has anybody got any other ideas on this subject. Kindest Regards Beat "Unlock People's Potentials!"


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

How to Set Sales Goals that Work

Sales Courage and Resilience

The Importance of Master Data Management (MDM)

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.