by Barney Davis
Multi-level marketing was the biggest growth industry in the 1980's. It is the industry that has made corporate giants of Amway, Shaklee, Mary Kay and Herbalife. It has been termed as the last true rags-to-riches opportunity left in North America, and its ability to bring enormous incomes to almost anyone is legend. In fact, it is expected to make more new millionaires by 1990 than any other industry, and soon after will be the single most popular method of bringing new products to the consumer.
The first multi-level companies sprung up in the 1930's, but they were dinosaurs compared to modern marketing strategies. It wasn't until the mid 60's that MLM gained international prominence. In 1985, it is estimated that $5 billion worth of new products will be sold by this method.
MLM offers the opportunity for anyone to operate their own business. For less than $50 in many cases, you can get involved with a legitimate MLM program and earn from $100 a month to hundreds of thousands of dollars a year. Most incomes naturally fall between those two extremes, but the earning potential in almost any good company is virtually unlimited. The only limits are set by marketer himself, by his time, energy, persistence, and faith in his product the people he works with. A superstart in MLM need only be a caring, sharing person, energetic and highly motivated. Some of the most amazing success stories in MLM have been hard-luck Harry's and bored housewives with no previous marketing or sales experience.
The root of MLM success is the sponsoring of new people into their businesses, much in the same way sales agents find new retailers to handle their products. Successful organizations such as Amway and Mary Kay have thousands of distributors, but even these had to start with one or two motivated people sponsoring a few other motivated people.
The ultimate test of an MLM company is the quality, price and reusability of the product. A good firm is usually founded on products with rapidly expanding popularity, day-to-day use in the home, and a regular repurchase required. They should be better quality and at least as competitively priced as the same goods bought in stores.
Here are the barebones mechanics of MLM
- You become involved with an MLM company first as a customer because the product offers substantial quality and savings.
- Because the products are good, you tell others about them.
- Rather than send these people to your distributors, you become a sponsored distributor yourself for these new people. And if these people, let's say the are five, know five other who will buy the product, you have 25 people buying products through you.
- If these 25 each know five people, you have 125. If those 125 know five people, you have 625 at the fourth level buying through you in a distributor's network you built from only five people. If these people purchased only $30 month worth of products, that would be $300,000 in gross sales, and you could expect to earn at least one quarter of that figure, probably much more.
- Commission and bonuses vary with product and company, but most go through four to eight levels, and have two or three levels at which substantial higher commissions are paid. This encourages new distributors to build those levels.
- Some of the networks-inside-of-the-networks will end at certain levels with people buying but not sponsoring new people. And some will involve more than five people. Distributors will always be your best customers and biggest moneymakers.
- The best companies are the blue chip firms offering a wide range of products such as Amway and Shaklee. New ones emerge all the time and some of the faddier MLM companies die quickly. but they can still make good money quickly for distributors with established "downlines".
Choose your product line carefully, recruit heavily and always expand your business education as you grow. MLM is a big field with big rewards for anyone, absolutely anyone who can commit themselves to success at any cost.
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