What You Need To Know About Multi-Level Marketing

Marketing is an important tool for any retail business that is planning to grow. These days, there are so many channels available to market your product that it is easier than ever to get started with your own business enterprise and watch it grow. Now, there are two ways in which a company can chart its growth – organically, and through paid channels. Organic growth means using legitimate, and tried-and-tested business practices to reach out to an audience in an authentic manner so that your product gets its due in the time to come.

Then there is the other option, which involves letting someone do the work for you and could use not-so-ethical means to ensure your growth. While the organic way of growing your business might take time and some effort on your part, it will pay off in the long run. Shortcuts to growth usually end in a massive growth and then a long-term lull which will have to be boosted with more money on marketing.

What’s Multi-level marketing?

At its core, a multi-level marketing (MLM) program involves the use of multiple distributors to sell a product. It functions through a hierarchical system, where one distributor recruits other distributors and get paid for the same. Like an employee referral in companies. When a distributor recruits new distributors, they are in charge of the training and motivation of the new recruits. As a benefit of training the new employees, a percentage of their sales goes to the original recruiter, and so on.

MLM is actually helpful for small businesses since this involves very little capital investment on behalf of the company. It relies on the networking skills of distributors and how well they are able to reach out to potential new distributors and get them on board. The achieve super success through MLM you have to be immensely involved in the company, absolutely sure about the product as well as enthusiastic about promoting and selling it. The attributes of being a good salesperson and being enthusiastic is a skill that will hold you in good stead no matter which company you are working for.

MLM differs from pyramid schemes in one key way – MLM does not rely on new recruits for the benefits to be accrued. If you are running a legitimate MLM system in your company, you need a distributor who loves your product, company and is selling the product through ethical channels with no intent to scam anyone. A pyramid scheme, however, relies on new recruits to invest so that those higher up in the pyramid can make more money.


How Do You Begin in MLM?

In order to become a distributor in an MLM entity, you don’t really need to know much about the product itself. Here are a couple of key factors to keep in mind: Distributors become aware of the product through something known as an opportunity meeting, or even word-of-mouth promotions from colleagues, or friends or professional circle, or even through shows where companies talk about their product and ask people to come on board Ask if you can make money simply by selling lots of the product/service – if the answer is yes, then, you’re in luck. However, if the emphasis is on new recruits, then, you’d be better off walking away.

Since MLM is a one-to-one, personal way of selling a product, there are plenty of people who take advantage of this and couch their scams within this system and have managed to harm the reputation that MLM has gotten over the years.


How To Spot A Fraud

While MLM does involve a lot of work, and there are plenty of people who have touted plenty there are a few frauds out there, we’ve put together some pointers that will help you spot a fraud:

Don’t sign up if you have to spend on expensive stock

Don’t sign up if the plan emphasizes on your downline (the new distributors you recruit) rather than actual sales

Don’t sign up if the product offers a miracle or miraculous gains – ask for proof of concept

Stay away from shills – fake references which are paid for by promoters

Don’t sign a contract or deal when the company is hosting an “opportunity meeting”. Always get an objective, outside opinion.