Age-Old Question: Is MLM a Viable Membership Model?
If you think you want to get involved with MLM, do your research first. The challenge with MLM businesses is that people at the top are most often the winners. The biggest majority of people at the bottom end up spending money and time to get involved and end up losing whatever they put in. Multi-level marketing (MLM) is a marketing and distribution structure. People at the top sell to those below them, who in turn sell to those below them. The higher up you are in this structure, the more money you can make. Be sure to check with at least a few other people who’ve entered at your level (who you identify on your own, separate from people the MLM promoter refers you to), and see what they have to say. Find out what they have to say on how – and if it’s possible – to be successful.
There are advantages to Multi-level marketing. First, the start up cost is usually very low and that is a big plus to the work-at-home mom (for example) who has limited funds to launch an online business. It is a way to get started in an online business with a very small personal investment and that is a very appealing thing for many people. Pre-packaged tools and products are provided and that saves a lot of money and relieves the need for warehousing.
Also, sales techniques are given and for the newbie to Internet marketing this is a very attractive advantage.
There are also disadvantages to Multi-level marketing. Many (if not most) people lose money in MLM activities, because they can’t sell the product as effectively as they thought they could. And then there is the problem of credibility. It can become an issue, especially if you start treating friends like they’re customers.