BONNERS FERRY — Although Multi Level Marketing (MLM) has been around for a long time, with the advent of Facebook and other online venues, it is now enjoying a resurgence. It is a controversial system that allows a company to sell products or services through a consultant or distributor.
Many relate this system to the illegal pyramid system companies, but there is a difference. It is a similar concept, but what separates the two is MLM provides compensation for sales, where the pyramid system does not. The pyramid system requires the distributor to buy a set amount of product and make revenue through recruiting other distributors, which has a high fail rate. The MLM system may also require a payment of start up costs and products, but the distributor makes compensation on the sales as well as recruitment.
Looking through internet articles, one may see negative and positive comments on the different companies that utilize the MLM system, but the success of a distributor’s role in the company they choose to represent relies solely on how they feel about the product or services that the company they represent provides.
Most people have been approached, or heard about a product or service utilizing this method of distribution through a friend or local resident. Speaking with a couple local distributors, not only are they passionate about the products they provide, but they are allowed the freedom of time that having an hourly job takes away.
“We decided to do this because we wanted more freedom. I was a new mom,” said Tasha Swisher about herself and her husband Dayne Swisher, who are owner/distributors of an MLM company. “We loved the idea of working for ourselves, from anywhere! We caught the vision early on.”
Participating in a company that utilizes this method opened the door for these distributors to be home with their families and still make an income.
“I wanted to do something that I could do on my own schedule and on my own terms and that I was passionate about,” said Amanda Merrifield, who is also an owner/distributer of an MLM company. “I wanted to be able to work as much or as little as I wanted and still be able to be home full time.”
Network marketing opens the door for people to not only make an income and free time, it can be the opportunity someone needs to supplement an income. With the advantage of a much lower start up cost, and little training, this method of business ownership is the least risky and most inexpensive to begin.
The main goal for any business owner is to keep customers, which keep profits in the positive margin, and generates income. In addition, obtaining new customers is equally important as they increase revenue and allow the business owner to make more profit.
With network marketing companies, they rely on word of mouth and social media instead of paid advertising, which lowers the cost of obtaining new customers, and increases profits. Being a representative of a company like this has the additional advantage of the fact that there is no cap on how much money they can make.
The distributor uses personal experience with the products or services they sell to convince their family and friends to try it, and depending on their experiences, the news spreads about the company. Those that may share a passion about the product and wish to tell their friends and family about it may also become a distributor, which increases the initial sellers profits, and the ripples continue to spread.
However, not everyone sees MLM businesses in a good light, as there are risks. A new distributor may come into a company with all good intentions, but didn’t market enough or maybe didn’t have the right financial situation to continue with the overhead costs, and gave up, creating a bad reputation for the idea. One needs to weigh the pros and cons of any business venture before taking the leap.
“The common feature which is found across all MLMs is that the compensation plans theoretically pay out to participants only from the two potential revenue streams,” states Wikipedia. “They are incentivized to recruit others to join the company as fellow sales people so that these can become their down line distributors.”
Not every MLM company is for a person and the pros and cons of being affiliated with an MLM company is also important to consider. Conducting ample research of the companies that a potential distributor is interested in is key to the success that individual will have.
“It all sounds good on paper, yet there is a seemingly endless debate over whether these companies and programs are legitimate business opportunities or not, so I dug in and got the real scoop. As a result, I believe that the entire industry is poised for explosive growth and can be one of the most significant solutions to America’s current retirement savings crisis,” states Robert Laura in his article: ‘Would you join a multi-level marketing company for retirement income?’ on Forbes.com. Laura goes on to talk about how these companies may be beneficial to retired people.
Morebusiness.com states in their article about multi-level marketing, “The initial costs to start would be low. There would be dynamic leadership, providing motivation and catering to healthy team competition. They would have a successful marketing plan and a strong support system. There would be attractive incentives and bonus plans for those who excel. Because seventy-five to eighty percent of your contacts may result in rejections, you must be able to not take rejection personally. When done the right way, MLM can be an extremely profitable and rewarding experience. Just make sure that you have done thorough research before embarking on this venture.”
Finding the right company to represent, having the drive to get the word out about the product or service, doing ample research before making the decision to be involved with an MLM company, and having a network of potential customers, are all key to the success of the business. The Swishers and Merrifield are prime local examples of how being involved in this type of company can be both beneficial and successful.