Is an MLM or Networking Marketing Right For You?
Is an MLM or Networking Marketing Right for You?
You want to supplement your income and you want to be able to do it from home. The first recommendation from other women and moms is often MLM. So what is an MLM?
An MLM or multi level marketing program, also referred to as network marketing or referral marketing, sells products or services through independent sales consultants. Common examples of MLMs include Tupperware, Avon, Regal, PartyLite, LegalShield, Cutco. These companies are used as examples only. Some may also refer to MLM as pyramid selling. The early entry consultants often make more money because of an expanded network of consultants below them. Money earned from an MLM business is commission based. If you do not sell or bring in new consultants, you don’t get paid – no matter how hard you work.
Making money in an MLM often comes in two forms.
Selling a Product or Service
The primary income for an MLM consultant comes from selling products or services. Many companies offer in-home “parties” where your customer invites friends to a gathering where your products are for sale. Other companies sell product or service direct to customers in one to one meetings, trade shows, catalogues or online referrals. The MLM consultant only makes money if their customers buy products or services in this form.
Signing up Consultants
The secondary income, often a residual income stream, is generated by signing up additional consultants or hosts. As you grow your team, you take a cut of their income resulting in you generating income when your team grows and sells more product. This process is why many MLMs are referred to as pyramids. If you are the head of the team, you have a greater percentage of revenue due to a larger downline of people working under you.
Do you believe in product?
If you are planning to join an MLM, it is important to ask if you believe in the product. Is this a product you would use regardless of whether it makes you money? Do you believe in the company? Does the product or service solve a problem for people? Choosing an MLM should not be like choosing ice cream – this is not flavour of the month club though some MLM consultants seem to treat it that way.
Choose one business with a product or service you love and would highly recommend to others. It may be possible to add a complementary business but it is not suggested as you get up and running. You need to focus on developing one business first.
The other thing to consider is remuneration. How do you get paid? How many items, products or services do you need to sell to make it worthwhile for you? What is the cost to run this business? Remember if you are not making sales, you are not going to be able to cover your costs. Is this business to generate revenue for you or create an extra expense?
What is the cost to join this opportunity? Do you need to buy product? Supplies? What happens if this opportunity is not a good fit for you? Can you recoup any upfront expenses? Many consultants end up with a lot of product and no revenue because the business is not the right fit or due to poor customer research.
How will you reach your audience
Regardless of what type of business you choose, whether it is MLM or other, you need to know how you will reach your audience. If you are joining an MLM so you can work from home, you should know that most MLMs REQUIRE you to work outside the home whether it is to run a party, attend a tradeshow, meet with a potential client or simply to build your network.
It is essential that when considering any business where YOU have to find the customer, that you understand your network. No network. No sales. How big is your current network and how will you expand it?