The Truth About MLM (Network Marketing)

So, before I've gotten involved in multilevel marketing (MLM), I didn't know anything about it. I didn't even know enough to call it a "pyramid scheme" (by the way, a "scheme" is nothing more than a plan). All I knew was that when I went to my first meeting, I had to pay money to get involved. And I was always told by my mother that if you had to pay any fee to apply for anything to make money, then I should stay away from it.But, I'd paid my money -- and I don't regret it one bit!So, what is MLM anyway? Let's first clear this up: it is a LEGITIMATE way of doing business. This method has been around since the 1950s, if not sooner. It has worked very well for millions of individuals. Some well-known MLM companies are Mary Kay, Avon, Herbalife, and AmWay. And many more are springing up! With all these well-known companies, you have millionaires who made their fortunes through MLM alone!So, how does MLM work? Well, let's first talk about direct selling method. I have supplements I want to sell. You're willing to buy it. You give me money. BAM! I just made a profit. If I want to keep making the $$$, then I need to keep selling you supplements. If I stop selling, I make no money. Simple, right?Wal-Mart, Macy's, supermarkets, etc., etc., are all examples of direct selling method. They purchase items from different distribution companies at a significant discount and sell these items to customers at a higher rate to make a profit. If they close down the store for a day, they make no money. As long as the store is open, they make money by continuing to sell products.That's the basics of direct selling. Now, what is multilevel marketing? Well, it does involve direct selling. But it also involves recruiting.So, let's say that I sold you supplements. That is direct selling. I won't make anymore money from you ever again. If, however, I was involved in MLM, then there is a way that I could continue to make money from you years and years down the line.In MLM, I would sell you the supplements. Let's say they are energy supplements. You like the stuff and tell all your friends about it. Your friends want to know how to get these supplements. In MLM, these supplements are only available through independent distributors (or sales reps), so they have to come to me to get them. They bought some energy supplements. They like the results and tell their other friends about it. They all come to me buying -- and all their referrals continue to come to me years later.But that is still direct selling, right? Well, let's say that I went to you (because you're still buying supplements from me) and asked if you want to take credit from all these sales. You say sure and you sign up to be a distributor. Now, everybody that you tell about these products would buy from you instead of me. BUT, I get a certain percentage from the sales you make. So, I am making money from what YOU do.Now, what if one of your customers decide to get apart of this action and sign up as a distributor. Whatever your person makes, you would get a percentage of that. BUT guess what? I would get a percentage of that, too! So, I am making money from both of you! And it goes on and on.Different MLM companies work slightly differently, but the compensation method is generally the same: you make a percentage from whomever you signed up, and you make a percentage from anybody else that person signs up, and it continues to a certain point. The people you sign up and the people they sign up are apart of your DOWNLINE. You make money from the work your downline does. So yes, you could literally get paid for doing nothing.Now, does your downline work for you? That's a big misconception. The MLM company you work for would pay you a percentage of what your downline does. Your downline pays you nothing. So when you get a check in the mail, it would be from the company, not from the people you signed up.Now, this is another big misconception: you would continue to get paid even if you're doing no work. Maybe in a perfect world, but not in MLM. Different companies have different guidelines, but in general, you need to keep a certain status level in order to get money for the work your downline does. Keeping this status usually involves buying a certain number of products within a time limit. No, the amount of products aren't necessarily a huge expense. In order words, you still need to keeping selling and recruiting if you want MLM to truly work for you.Different companies also offer performance bonuses, paid vacations, and other rewards depending on how hard you work. As long as you continue to sell and get recruits, you'll make a ton of money in MLM, and you could get others to make a ton of money by doing the same thing that you do.But just like with any business, you would have your scam artists out there. MLM, unfortunately, has a bad rap for scamming. In general, MLM companies should not give the impression that:

• It's easy to make money
• Little to no work is involved
• You could get rich quickly
• Their products produce very extraordinary results (ex: lose 20 lbs in one week)