What is MLM:It refers to a strategy used by some direct sales companies to sell products and services by encouraging its members to promote and sell their offerings to other individuals and bring new recruits into the business from which the new recruiters earn their rewards.One of the fundamentals of MLM is for members to earn through saving made without commercial marketingPointers on MLM
- Members earn by referral or getting new members
- The top earns first and more & it trickles down; The winners are usually the promoters & early members. Thus, be be the pioneer members of the company
- In MLM, the element of saturation is imminent over time. If the MLM is already in the market for more than 3-yrs, their product should have captured the easy clients/members leaving only the tougher ones.
- For MLM to succeed, the product must be worthy; quality, price and product accessibility
- MLM needs a good value chain system; Most often the value could diminishes with every additional sales level coming up; The chances of the new member making more money than his referrer is usually lesser.
- Generally, MLM fits the bill into business of earning money from another; and not from the noble means from creating additional value.
- Many MLM schemes are legal, but there are also illegal operations run as pyramid schemes. This has cast negative light on legitimate MLM businesses.
- From the thousand's of MLM created, there are only few successful MLM like Amway; while the Herbalife Nutrition is still surviving
- To start an MLM company, it need huge capital, in millions $$$
But this can be resolved with investors if all relevant matters (above) are in order.
However, a successful MLM biz, U need ...
- worthy product of quality, price and good accessibility.
- have a good system that's reliable, motivating, benefiting the hard-workings members
- avoid pyramid schemes & that enrich by merely logging new members.
- develop a capable, committed & hardworking team knowing sufficient product knowledge & company process for customers
- have a capable promoter having all the business acumen, smart thinking & good PR that able to select & motivate downline members
Negativity
- recruiters usually say they are helping others; usually it's not the case; more likely the reverse is true.
- Its more often a scheme of referral than product sales
- Unlike claimed, MLM is not uplifting of the poor.
The best it does, is giving opportunity to those few who took part initially. Uplifting another should actually be by either giving a job to a deserving person, education guide for a suitable career path, skills, opportunity to a business channel, etc
References:
https://www.investopedia.com/terms/m/multi-level-marketing.asp#:~:text=Multilevel%20marketing%20(MLM)%20refers%20to,percentage%20of%20their%20recruits'%20sales.