Although multi-level marketing has been scrutinized for years, and linked to various shady pyramid schemes, it still continues to be one of the most effective marketing strategies. There are lots of successful companies that include MLM in their marketing practice, including business giants such are: Avon, Amway, Herbalife, USANA etc.
This and many other companies that implemented MLM in their business model have been a subject to criticism and lawsuits for some time now, and it’s finally the time to explain the difference between MLM and pyramid schemes and other notorious and illegal selling tactics. One of the main differences between companies that use MLM and those who lure people into pyramid schemes is that legal companies take their commission from the sales, rather than from member contributions. Some other differences between pyramid schemes and MLM companies are:
- MLM companies have strong and easy understandable business model, while the whole pyramid business is usually based only on big promises.
- MLM companies don’t require any initial payment from people who are interested in joining their network.
- They are also sustainable, unlike pyramid schemes.
- Unlike companies that are into pyramid schemes, MLM companies offer viable business opportunity from top to bottom of their “food chain”.
Now when we know how to spot a difference between a pyramid schemes and an honest and law abiding MLM companies, we will share some tips that will help your MLM based businesses grow.
Pick Your Sellers
As we said in the beginning, unlike pyramid scheme good MLM practice requires highly skilled people inside the network. This means that you can basically sold products to anyone, but when it comes to sharing responsibilities and hiring people to work with you, you need to be very picky and strict. Lots of entrepreneurs and sellers are accepting anybody who would like to join their network, which later turns out to be a very bad idea, when those people start giving bad name to the whole company. That’s why only honest, stable and pleasant people with great selling skills should be able to join the company ranks.
Listen to the More Experienced Leaders
Most people think that if they did well in some other businesses they will be even better off with MLM sales. This is utterly wrong for both entrepreneurs and regular network sellers. Network marketing is all about duplicating more experienced and more successful colleagues, and when they want to give you a piece of advice, you should definitely listen and try to apply their wisdom onto your sales.
Every MLM network needs to be planned to the smallest detail. Planning starts from dreams and hopes and you should investigate these and determine the most important goals that will enable you to buy your dream house, car, jet, exotic island, or whatever you wished for. Goals are like steps that take you to your dream prize and when it comes to MLM they can be both financial and organizational. Selling more products and having more (good) sellers in your network will both make you richer, but you need to plan your methods for achieving this goal, put it into a time frame and inspect every aspect and possible outcome separately. This is the way you will be able to earn enough money and climb up the network ladder at the same time.
Both you and your sellers need to work very hard to build wider network. Although MLM has produced lots of wealth in last few decades, it still isn’t a get-rich-quick scheme and a lot of hard work stands behind every successful network out there. This business shouldn’t be treated as a hobby, and top earners are the ones who sell and promote their products all day long. Different stages in MLM career also desire different kinds of work to be done. In the beginning most time is spent on: promotions, presentations and signing new people, and later, after you climb up the ladder, you will work more on coaching and providing support for your earners.
Provide Good Training
Good MLM requires a good training of new members. This is one of the most important criteria for success. Companies need to pick out their top earners and assign them to different sales and organizational courses and workshops, every now and then so their network and sales will continue growing. Good training is also the thing that separates good MLM business from a pyramid scheme and companies that fail in their first year of sales. Training is not only meant for new members and the ones who are waiting for promotion, but for all network staff, especially when it comes to introducing the latest technologies. MLM companies always need to follow trends and include the newest multi level marketing software into their business model.
There is a lot more to learn about multi level marketing and this strategy is still in its development phase, although it is successfully used by various companies for several decades. That is why the most important tip about becoming a successful MLM entrepreneur is to be inventive, try out new stuff and take an active part in MLM’s business odyssey.