Multi-Level Marketing known as MLM Network Marketing is often put in the same category with Pyramid Schemes and the most voiced question out there is “What is the difference, or is there really one?” There are so many people out there today who have had a “bad experience” with one and confusing it with the other. Maybe, you are one of them.
MLM (Network Marketing) is a legitimate way to make income and a very popular way in retailing products compared to more “traditional methods” by working in a retail store worked by sales clerks and associates. The only difference is, one is working in a store environment and the other through marketing themselves as an independent distributor for their products via network marketing online and offline. Instead of going to work in a retail store, the network marketer is generally working from a home office.
With a network marketing structure a person can manage and build their business and sales force by team building also known as “recruiting” and supplying those individuals with training, encouragement, and motivation in the sale of their products. Yes, make no bones about it your compensation (also known as residual income) does and will include a certain percentage of the sales your entire group earns as well as what you earn from your own sales to retail customers. Just as a sales associate in a store front would with commission on their sales volume of that sold product so then their company in turn makes a profit.
It is because of this opportunity that Multi-Level Marketing has become so popular in this economic crisis that is gripping our nation. This opportunity is a way of starting a legitimate home business with a much smaller bracket of start up costs than say for instance a “traditional business.” Leasing a building, high overhead costs, employees to pay and so forth.
In order to differentiate between a legitimate business and one “disguised” as one such as a Pyramid is this;
A Pyramid will push to make money off of you in a very high paced and quick manner. You will feel high pressure and fast talking to reel you in. The next thing you know, you are out quite a bit of money and once you’re “in” you virtually never hear from them again. They have made their money and now on to the next. All the while leaving you holding the bag not knowing what to do with it and set you up for disaster.
Now, in Multi-Level Marketing it is geared towards helping you make your money and assisting you in building your business and their own by selling products to the consumer. MLM Network Marketers want you to succeed in your business. It matters to them and yes it benefits both you and them in the process in building a business that will give both the financial freedom desired whatever that financial goal is.
It is extremely important and I stress this with all my might, before you sign on the dotted line with any company, investigate it very carefully and take your time making the right decision for you. If you are feeling that high pressure, or your alarms, bells and whistles are going off, follow your intuition. Learn from those who have been there and made those mistakes and stumbles along the way. Most Network Marketers want to prevent you from pitfalls via their experience.
Here’s a great way to start by asking yourself 3 simple questions:
1. How much are you willing to invest in your home business?
While you are not starting a traditional business as we spoke of earlier you are starting a business none-the-less which does require some investment. However, that does not mean breaking your pocketbook either.
Start Up Costs: Start up fees in Multi-Level companies are generally small and often for a sales kit so that you are prepared to show your product and start selling to make money as quickly as you can for your business. Most of these companies want to make it easy and as inexpensive as possible for you to reach your sales goals. Some will also offer you more than one option in helping you get started.
A Pyramid Scheme on the other hand will make most of their profit off of signing up new recruits. That is not the case with MLM.
2. Does the company buy back any unsold inventory should you decide it’s not for you?
Legitimate companies that require inventory generally will “buy back” any unsold and unused products/merchandise if you decide that you no longer wish to be in the business.
Note: Many states have laws that require company buy backs for at least 90% of your original cost.
3. Does the company you signed up with sell their products to consumers?
This is a main key element and network marketing distributors rely on their sales to consumers and establishing a customer/distributor rapport for repeat sales. In turn, this requires quality products that are affordable for the consumer and be competitively priced.
A Pyramid Scheme on the other hand have no concern with sales to consumers of products. Their profits are made on the volume sales of their new recruits, who in turn buy the products, not whether the products are useful or even priced affordable or even competitive in the market. This is because their new recruit must purchase the products in order to “stay in the business and therefore they make their money off of what you spend not a consumer.
When purchasing inventory keep in mind it should never be more than you can realistically be expected to sell at any given time. A good, legitimate business does not want to see you in debt. The goal here is for you to become debt-free. A true MLM network marketing business when push comes to shove in all truthfulness allows you to build your business as wide as you want, how you want, bring as many people into your business as you desire and still pull in income on a certain depth of your company.
A Pyramid Scheme on the other hand dictates what you can and cannot do in your own business.
With this said once again, please investigate all your options out there before going into business of any sort.
” Knowledge may be power but to learn is to Empower.” You cannot have knowledge without learning first which gives you the empowerment of knowledge over time.
Copyright © 2008 Jamie Volner
Article Source: http://EzineArticles.com/?expert=Jamie_J._Volner
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