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Network marketing, also known as Multi-Level Marketing (MLM), is a business model where independent contractors buy into a company and earn a commission on the products they sell. The profession appeals to many people because they can be their own boss, set their own hours, and work towards their own success. It is a big commitment, but network marketing can be a very lucrative career.
This is awesome! I didn’t know there was an MLM company that sells wine. I may look into this. I’m still on the search for a solid company. I pretty much have PTSD with MLM companies because of past teams I signed up under. They were all about hype and money but never did explain HOW to build the business. It was so bad that I am now more cautious and aware of these type of people.
I’m truly sympathetic to this desire. A lot of folks are struggling financially out there; Dad’s salary alone isn’t enough to support the family (or he’s out of work altogether), and Mom getting a job may not be a big help once the cost of childcare is factored in. Plus, a lot of moms simply don’t want to send their kids to childcare and want to be able to stay home with their children.
But then Jim sees something in the starter brochure: Instead of just buying the amount of shakes that he needs to fulfill the demand for them among his friends and family, Company A requires Jim to buy $100 worth of shakes each month to maintain his status as a distributor. The company says you need to do this so you have enough inventory to sell to people and so you yourself can use the product.
Network Marketing is a business model that relies on a distribution network to build the business. Network Marketing business structures are Multilevel Marketing in nature, as the payouts occur on many different levels. You might hear the terms Person-To-Person Marketing or One-on-One marketing, which are just other ways of describing Network Marketing. Basically, network marketing involves the direct selling of merchandise or services. Some popular Network Marketing businesses you most likely have heard of include; Avon, Mary Kay Cosmetics, Amway and Herbalife Ltd.
Sales agents in MLM companies frequently work for commissions on sales. In addition, MLM agents typically get commissions on the sales of their “downstream.” Sales agents are able to recruit new sales agents into their “downstream,” and those sales agents can recruit new agents as well. An MLM sales agent usually makes money from each sale in their “downstream,” creating a form of passive income.
Who wants to get fit, look younger, and lose weight? Jeunesse, meet your global target market: everyone. With their crazy sales numbers, I wouldn’t be surprised if they are selling to just about everyone in the world. Jeunesse routinely make the list for the top 20 MLMs in the world, and they’re doing about $1.4 billion in annual revenue. Not only are you selling a very well-trusted product, but the sign up cost is also one of the lowest out there ($30).
Staci Cahill runs her Washington MLM company in a way many people can appreciate. She keeps her personal life separate from her business life by avoiding home parties, offering instead workshops that educate prospects on the products she offers. “I didn’t want to be that person others hid from because they thought I was going to ask them to host a party. I like to keep my business life and personal life separate.”
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Multi-level marketing (MLM) is known by a variety of names: network marketing, referral marketing—and more pejoratively (and/or when done unethically), pyramid marketing. In this structure, marketing and sales reps not only receive compensation for their own sales, but also receive a percentage of the sales generated by other salespeople they recruit (commonly known as one’s “downline”). (See also Referral Marketing)
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Two of the most important things you’ll need for MLM is passion and determination. Many people start working for an MLM company because they think it’s the next get-rich-quick scheme, and they’ll be able to make money without any effort. While MLM is an excellent way to work smarter rather than harder, it does still require effort on your end. To establish a strong team of downline distributors, it’s critical that you demonstrate a passion for the company and its products.
If Owner Two decided to expand his business and sponsors Owner Three, Owner Two would be credited for any sales volume that Owner Three produces. Lastly, because Owner One sponsored Owner Two, Owner One would also be credited for the sales volume of both Owner Two and Owner Three. It is this ability to generate revenue streams from multiple sources that has made network marketing a popular and profitable business for many.
You’ve probably encountered a situation like this. Or at least know someone who has. If you haven’t experienced this kind of in-person pitch, you’ve likely seen old high school friends or an aunt on Facebook or Instagram posting about an amazing business opportunity that involves selling eyelashes or health supplements or essential oils for something that can be described as a “multi-level marketing company.”
The Direct Selling Association (DSA), a lobbying group for the MLM industry, reported that in 1990 only 25% of DSA members used the MLM business model. By 1999, this had grown to 77.3%. By 2009, 94.2% of DSA members were using MLM, accounting for 99.6% of sellers, and 97.1% of sales. Companies such as Avon, Electrolux, Tupperware, and Kirby were all originally single-level marketing companies, using that traditional and uncontroversial direct selling business model (distinct from MLM) to sell their goods. However, they later introduced multi-level compensation plans, becoming MLMs. The DSA has approximately 200 members while it is estimated there are over 1,000 firms using multi-level marketing in the United States alone.
I don’t care where doTERRA in ranked. The oils are good, but the company SUCKS. It is all built on big bloggers. Don’t have a big blog – you’re going to make pennies while others demand you make a minimum $100 a month order. The company itself has great customer service, but try to reach compliance or tell them that your uplines are making fake accounts or ordering off multiple people in the downline just to ensure they make bonuses and NO ONE listens. It’s supposedly geared to help the underdog succeed – this is a gimmick.
That brings up another difference between traditional franchises and MLMs: When you own a traditional franchise, you’re not pressured to recruit other people to become fellow franchisees. In fact, if you did that, it could ruin your chances at economic success because you’d be competing with multiple business owners for the same customers. Also, that would be an illegal franchise pyramid scheme.