Multi Level Marketing - Understanding And Avoiding The Perils

By Author: Richard van Beek
Total Articles: 26
Comment this article

Multi Level Marketing has received its share of bad press, and while some opportunities deliver exactly what they promise, many companies could not care less about the well being of those who join the business. If you are considering joining an MLM company as an associate, or if you would simply like to buy from companies who are ethical, examine each one you encounter closely so you avoid companies that rely on the following tactics.

Worst MLM Practices

Outdated Sales Approaches - If your program expects you to call on your neighbors, of whom you may only be acquainted with a few, your chances of a sale there are not good. People these days are not as friendly toward their neighbors, nor are they as receptive to marketing because they are subjected to it constantly.

Expensive Inventory Requirements and Expectations - Many MLM programs have a mandatory minimum order for their distributors. Often these associates do not make enough commissions on their monthly sales to other customers to offset the bill for the auto-shipped products or their initial starter package.

High Start Up Costs and Membership ...
... Fees- The company or those in your upline should be making money from sales of its products, not directly from the pockets of the associates.

Overpriced Products- Especially in the current lagging economy, you don't want to be selling products that are not a good value for the money. Your customers will not be happy and neither will you.

Compensation Structure that Fails Beginning Level Associates - Often those at the bottom are losing money or working for peanuts while only a tiny percentage of people at the highest levels make the huge sums advertised.

Emphasis on Recruiting Over Sales - If more and more associates are recruited without heed to market saturation, there will not be enough profits from product sales to go around. Many MLM companies promote passive income from building a downline, but there must be a strong based of customers buying the product or the business will eventually collapse.

Advantages of Multi Level Marketing

Incredibly, there do seem to be MLM companies that help their distributors make money in ways that are sound and ethical. In these cases, the distributors' primary purpose is to distribute a product at a price people can afford (yes, it is true). The best companies make it easy for you to get started and learn the business. It is often much less complicated and less expensive to market a product that you did not have to manufacture yourself. Another attraction of MLM is that it can reward you for helping distributors in your downline succeed, thereby providing you with another stream of income that is termed residual.

If you can find an MLM opportunity that gives you a fair chance of success, the benefits can outweigh the risks, so that you can experience for yourself the benefits this kind of opportunity offers.