We haven't tried to answer
every possible question about MLM or Network Marketing here, just the ones that keep
coming up. If you can't find an answer to a question or concern
you have, please feel free to ask us directly.
Is MLM legal?
Unless a
country has laws that prohibit direct selling, MLM is usually perfectly legal. Some
countries, states or provinces have laws or regulations that may limit what you’re
permitted to do in your MLM business (such as Not For Retail, cooling-off periods,
no products kit sales in the first week or month or similar).
The UK and Canada have
laws that govern how you conduct your MLM business. So do some other countries.
These laws are
usually a well-meaning attempt by authorities to prevent unethical conduct. Unfortunately,
they're really an attempt to control motives and attitudes, which can't be legislated,
so they too often end up having the wrong effect on the wrong
people.
Is MLM ethical?
Like the
question above, the answer is yes — depending on your motives and methods (why and
how you do it). The principles on which MLM is based are completely ethical. However,
unethical people can introduce practices (such as “front end loading”) which are
entirely unethical. Others try to cover up the fact that their business is MLM, or
the identity of their MLM company, or that you need to sell, using deceptive practices
that are, in reality, unethical.
None of this
means that MLM itself is unethical. It just means that, like in industries where
a great deal of money can be made (cars, white goods, real estate, etc), you’ll find
people who are prepared to exploit and manipulate others for gain. MLM is no different.
All this really proves is that there’s obviously a lot of money
to be made in MLM, or those parasites wouldn’t bother.
Is MLM the same
as Pyramid Selling?
Absolutely
not — unless people in MLM have a Pyramid Sellingmentality.For an explanation of the differences between MLM
and illegal Pyramid Selling Schemes, click
here.
Do I need to sell
to succeed in MLM?
One way
or another, you need to be able to sell in order to succeed, no matter what anyone
tells you (see “Is MLM ethical” above). Even if it's only yourself as a potential
sponsor. Or your business opportunity. Or the need to set goals and action plans
for success. You even need to sell yourself, from time to time, on the vision you
originally had when you got involved in MLM.
But selling
doesn't have to be pushy or manipulative. In fact, the best the sellers are usually
teachers and leaders, not hype merchants. Selling is WHAT you have to do to succeed.
Pushy and manipulative are WHY and HOW you do it. There are better reasons (why)
and methods (how) that produce faster, bigger results. See
the Training Centre of this website for ideas and strategies that work more effectively.
Do I need to sponsor/recruit
to succeed in MLM?
You can
make some money and save some money in MLM. But, if you really want to take advantage
of the unique leverage offered by MLM, you need to sponsor/recruit.
It’s like riding
a bicycle. You can get yourself an old single-speed bike that has no gears. If you
want to go faster, you have to pedal faster. If you want to climb a hill, you have
to push harder, even though your speed is almost at a standstill. It's hard work,
and it takes a long time to get anywhere.
On the other
hand, a 10-speed bike means you can cruise at high speed in high gear, with very
little effort then, when you need to climb a hill, you simply drop the gears back
to low and put in a little more effort and get there much quicker for a lot less
effort.
Sponsoring
increases the amount of product flowing through your MLM business, exponentially.
And it boosts your rewards exponentially, too. It reduces the amount of time and
effort required.
Best of all
though — and you should never, ever lose sight of this reality — it gives you the
opportunity to help other people become successful, financially independent, confident,
and provides you with a large group of people, who share your
own values, with whom to enjoy the journey and share the rewards.
What are the best
kinds of products for MLM?
If there’s
one kind of product that's best suited to MLM, it’s products that are genuinely consumable. That is, people use them up, then come back for more, regularly.
That means you
acquire a customer once, then just keep on selling to them over and over and over
again.
Products
that cost a lot of money and are bought only once (or only every few years) can be
successfully sold by MLM. But you have to keep finding new customers every month.
Warning…
Sometimes
you may think you have a consumable product — only to discover that you don’t a have
a repeat customer base. The problem here is that many consumable products require
a change in consumer behaviour before the benefits can be gained. These may include
some health or weight loss programs where, because of force of habit, customers cheat
or give up before they get the benefits they wanted. Give careful thought to this
important factor — people will usually not persist if they have to discipline
themselves to change their behaviour to gain a benefit.
Low margin
products are usually not very successful in MLM, either. Especially food and grocery
lines, and especially if they put you in direct competition with large supermarket
chains. For every company that succeeds in this area, there are many more that fail.
Sure, lots of people join, because everyone buys these types of products. But, when
margins are tight, and supply is often unreliable (lots of “out-of-stock” lines),
the cost of making more than one delivery to supply a single
customer order can make the business unprofitable very quickly.
What’s the best
kind of reward plan?
“One that
works!” is the obvious answer to this question. But, seriously, there are many types
of reward plans, and people succeed and fail in ALL of them.
See MLM
Pay Plans for more information on this complex topic.
Can anyone really succeed in MLM?
Yes, they
can, providing they meet the conditions on which that level of success depends. This
is what separates the winners from the losers in any area of life, not just MLM.
The difference
in MLM is that those conditions are achievable by anyone willing to create a clear
vision for themselves,
then invest the time, effort and discipline needed to realise that vision.
It requires some basic knowledge,
attitudes and skills. It does NOT require any particular gifts or talents, although
these can help speed up the rate of success.
The secret of success in
MLM is leverage — the extent to which you can duplicate your achievements
through sponsoring, training and supporting others to do what you do.
