You are welcome to my Multi-Level Marketing Business Model review. Can you make money with Multi-Level Marketing Business Model? Is the MLM Business Model legit or a scam?
This article is about the MLM Business Model and why it is always mistaken to be a scam and pyramid scheme.
You will also know why it is always challenging to make money with the Multi-Level Marketing Business Model.
Estimated reading time: 10 minutes
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Summary of MLM Business Model
Multi-Level Marketing Business Model is every were both online and offline.
Many companies ranging from beauty to a healthy niche, are employing this business structure.
But why?
It is obvious. These companies have the advantage of using people for their marketing and automatic sales.
When you join any MLM Business Model run business, you must purchase the so-called starter pack.
Buying a starter pack is a must in any Multi-Level Marketing company.
You have not to join until you get a starter pack. Which is an automatic sale for these companies?
Why You Will Make No Money In MLM Business
Mr. Jon M.Taylor did an investigation that took 20 years of research of over 600 MLM companies.
His revelation was explosive, and he concluded that only 99.7% of people that join Multi-level marketing would not make money.
He stated that only 0.3% of people join MLM companies that will make money, and others will lose their money.
His report “the Multi-level Marketing Unmasked“; which was endorsed by consumer advocates, researchers, legislators, and federal and state regulators.
The book is an MLM guide that exposed features, flaws, deceptions, and many devastating situation effects of joining MLM company.
With all the above, can you still make money with Multi-Level Marketing Business Model?
Origin of MLM Business Model.
You are welcome to my Multi-Level Marketing Business Model review.
Multilevel Marketing dates back to 1930; when Carl Rehnborg got to know the importance of dietary supplements; and the health benefit attached to it in the body.
This happened while he was in China, several years later, he traveled down to America and started a company. The company was named the CALIFORNIA VITAMIN.
He grew the company with steadfastness and hard work and then rebranded it to NUTRILITE in 1939. I will be explaining what the multilevel marketing business is in this article.
He started looking for how to strategize and make his product more popular and accessible along the line.
Then, he felt he needed independent distributors and boycott retailers in the process; this was in a bid to get his work to the end-users and for more gains.
In 1945, Carl Rehnborg introduced the product of his thought, which transcends to multilevel marketing strategy.
Later on, two consultants were hired as distributors. That became the stepping stone in multilevel marketing with the expertise of the independent distributors, namely Jay Van Andel and Rich Dews.
The company experienced a dramatic turn, and sales grew progressively over a short period.
The two distributors, later on, invented a rival company and named it AMWAY to aggravate the extent to which their goods will be subsequently distributed.
After sometimes, Amway became the brand name and trademark of Nutritive. To date, it is known to be one of the world’s most massive MLM.
One of the most significant achievements of MLM over time is the job creation aspect of it; how many of these people make money with the Multi-Level Marketing Business Model?
Over the years, it participants have grown geometrically, and as a result, the issue of job problem has become low. You can read more about MLM Business Model on Wikipedia.
Over time, the government has had challenges creating jobs for the population that keeps growing and, over time, have been trying their best to motivate investors into partnering with firms to help on that, to make the supply-demand level of job proportionate to the demand level.
What is an MLM Business Model?
Multilevel marketing, being an industry that worth over 170 million pounds, has helped over 90 million individuals, and it’s still assisting the several thousand coming under its umbrella every day.
Over the years, Millions of Multilevel marketing schemes have sprung up, thereby finding their rightful place in the scheme of things and, as a result, are doing excellently well in their chosen line of action.
Some companies doing amazingly well in this sector are Oriflame, Foreverliving, GNLD, Herbal life, juice plus, Amway, Free life, Avon, Mary Kay, and life vantage, etc.
Right from the birth of MLM, it has gone through many stages, which includes the door to door services, handbills, and catalog distribution, hotel meetings, and gradually, it entered the internet stage.
However, it should be noted that the computer stage(jet age) is the father of modern science, which cuts across barriers, age groups, nationalities, personalities, and intelligence. Still expecting the next stage, MLM will take on.
Why the MLM Business Model Is Growing.
Ranging from the several benefits it offers humanity, and one unique thing about it, in the hope it promises in the not too distant future, and one is asking what exactly will be in stock for MLM in the future?
Moreover, it should also be noted that it is gradually turning into a multi-trillion dollar sector with more participants trouping in and almost none going out because of the flexibility it offers and the numerous promises made by the producers’.
It has gradually become part of human life, especially with the advent of computers, smartphones, and other electronic gadgets.
Right from the inception of Man, the business has to be the order of the day, starting with the trade and barter system up to the use of paper bills. MLM is another industry in business that has come to stay.
On the other hand, traditional Pyramid encourages its participants to pay a certain amount of money into the system and, after that, invite additional participants.
They will be willing to do the same. The referred participants will be directly under their host.
The system operates mainly on the referral basis with no sale of the commodity involved.
Referrals generate Their source of income, and they are all getting the reward they desire at the end of the day.
See why all multilevel marketing program is a scam.
It is usually an illegal scheme based on hierarchy order, and most times, it is only those at the top, that benefits from such systems.
MLM Business Model Income Generation
A lot of people are wondering, and they want to know what the multilevel marketing business is.
Multilevel Marketing (MLM) Network is regarded as a non-salaried scheme. I
ts participants get their pay and bonus directly from the end-users, and also, it should be noted that the more goods the participants can sell, the more his pay and bonus increases.
This is a scheme to hands over more goods into the hands of the end-users i.e. the owners of the business and the people at the top of the scheme.
There are two types of compensation plan in MLM:
- The direct commission made on sales
- Commission realized the sale achieved by an individual down the line. This set of people generates income from the referral system.
MLM Business Model Profit And Loss System
Most participants operate at a net loss. The system only rewards the owners of the business and the very few early joiners of the MLM scheme.
The unfortunate thing about this system is that the few it is the few at top that gets all the money.
MLM is usually a scheme of the network for people who wants to have full control of their time; that is why they the name independent marketers.
The consumers in the Multilevel marketing (MLM) networks are merely the end-users.
The profit and loss are simultaneously dependent on the ability to generate sales, as the salespersons’ pocket is directly affected in all of this.
MLM product does generate millions of dollars annually at the detriment of the sale persons’, who get little or no profit at the end of the day after deducting all the expenses incurred in running his independent business.
In essence, the producers’ profitability does not correspond with the salespersons’ margin, and as a result, the salesperson’ is lose more money.
The anxiety in the hearts of the distributors to sell more product in a bid to be among the few that get reward by the producers, greatly impacts and maximizes profit.
This is usually detrimental to the welfare of the salespersons’ who goes against all the odds.
Pyramid Scheme Vs. MLM Business Model
The differences between the traditional pyramid system and the multilevel market (MLM) system are based on a legal fiction which itself is a delusional statement.
The legal system characterizes the individual mode of operation.
MLM deals with the direct sale of particular goods, products, and services while the traditional Pyramid does not deal with that.
There are also chances of gaining ground, strategizing to maximize profit by an MLM participant’s while in the case of the traditional Pyramid, chances of getting to the top of the game is void.
Legal Issue With MLM (Multi-Level Marketing) –
Over the years, MLM has lots of controversies, with the system having many lawsuits from critics because of the high similarities it has with the traditional pyramid system.
It operates on a strictly fixed price basis. From time to time, few participants do well and get bonus as a reward.
This usually serves as a motivation to other participants in a bid to target the next gift, which is often a void promise.
Merit and Demerit of MLM
- Joining the multilevel marketing network is usually not free of charge, as it comes with an entry fee, typically used to purchase the first product and its marketing kits.
- It is based on excessive compensation, targeted at generating more profit into the company’s account.
- There are two sides to life, and one of the merits of the Multilevel marketing (MLM) business model is the low level of risks in dealing with customers directly and personally.
- Demand for trusted and tested quality goods, is on the increase, in society. Then the possibility of selling off the product before it gets to the expiry date or person using the product.
- The value and satisfaction, quality products give to the customers is quite incredible.
- Given the fact that in the corporate world, no matter the amount of time and resources expended on one’s job, the income is generally based on the care system.
- While MLM rewards on the amount of product you sell
- MLM network operates at a low cost in comparison to the business venture, where specific considerations have to be put in place before setting out.
Is MLM Business Model Worth It?
What do you think of my Multi-Level Marketing Business Model review? Can you make money with Multi-Level Marketing Business Model? Is the Multi-Level Marketing (MLM) Business Model legit or scam?
I hope you now understand what the multilevel marketing (MLM) business is. If you wish to succeed in the MLM network, you must be fully ready to study how the system operates.
You must prepare to know what the network is all about, the thin and thick sides of the venture, general overview, and knowledge of the product that will be sold out.
You also need to know the strategies on how to make money with MLM, since the scheme is a non-salary venture, and participants are Independent Distributors.
It is always better to go for the products; an individual is familiar with. The company’s compensation plan is Paramount to the participant’s welfare.
Identifying the target market is key to business. Therefore, before a participant steps out into committing his time and resources into a venture, he must have a target audience in mind.
Standing out with ideas and innovations makes a business boom. Doing it the old way always produces the same result.
A participant must be able to come up with exciting ideas that will make the business boom.
Follow Up is essential in managing a successful business. Now in the first instance, it might be a yes later on.
A participant must be willing and able to do follow up to get positive results at the end of the day.
Is Multi-Level Marketing (MLM) Business Model a scam? Can you make money with the Multi-Level Marketing (MLM) Business Model?
Are you involved in any multilevel marketing? Feel free to drop a market in my comment area below.
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It is great to meet you finally. John is my name, and I’m the owner of Amazing Profits Online. I am a Full-Time Affiliate Marketer at Wealthy Affiliate, a community that teaches anyone to earn a full-time income online with their own passion-driven online business. No Credit Card Is Needed. It is FREE to Join. You can also Click here to get to know more about me.
I would give MLM a chance, if the company provides a lot of perks even for beginners. There’s no point entering an opportunity that punishes newbies by throwing to them all the risks, charging them thousands of dollars upfront, and making them work harder while filling their sponsors’ bank accounts. Not to mention the cult-like characteristics of many companies wherein if you deviate from their dogma, you can get kicked out. And oh, there’s also the risk of losing everything if the FTC takes down the MLM that you’re in. Bottomline, it’s too risky for me to join into.
Thanks for reading my Multi-Level Marketing Business Model review.
It is all about how the Multi-Level Marketing Business Model works.
Regards
John
You are right about MLMs being scams. I couldn’t agree more!! Not that all businesses who started out using that model thought of it as such. But once it gets rolling, I can’t understand how anyone wouldn’t see how manipulative of a model it is. I’ve seen friendships torn apart because of MLMs. Perhaps back when it all started in the 1930s it was different and people’s lives were different…? I don’t know. But I agree with you wholeheartedly that it is only the few at the top of a huge pyramid that ever enjoy the wealth and freedom. You mentioned Affiliate Marketing as a great alternative and I believe it is. Someone wanting to grow their own business, work from home and have financial freedom would do well to explore Affiliate Marketing.
Thanks for this post. Great read!
Darrin
Thank for reading my Multi-Level Marketing Business Model review
The article is to decide if Multi-Level Marketing Business Model really worth it
Regards
John
I’d say that not all MLM are scams. I was already a member of an MLM program and they did have good products to sell. Currently the are expanding throughout South America with a good amount of success cases. I joined the program because I was laid off and needed to work. However, I think that I don’t match MLM style of working even though people inside the company always claim that you, as a seller, are able to develop the skills and there should be no excuse.
I still prefer the “blogging style” where you offer products for people who really want the products, and even better, with good information about them!
Thank for reading my Multi-Level Marketing Business Model review
Yes, you are right. Not all MLM are scam.
Thanks again for reading my review of Multi-Level Marketing Business Model review
regards
john
Hi John,
I really enjoyed reading your article. Back in high school , I used to promote Avon and ORiflame and I can tell you that age it was a great way to make some money. However, as competition increases, it is harder and harder to recruit people for MLM.
I believe your affiliate marketing recommendation is the way forward. I have now signed up for a premium membership after the seven days trial.
Kind regards,
Yoana
Thanks, Yoana,
Thank for reading my Multi-Level Marketing Business Model review.
But does the Multi-Level Marketing Business Model worth it?
Regards
John
Hello,
I have read a lot of bad reviews about multi level marketing which reviewed this business model as something you better not get involved with. They describe it as something near to a scam. Whenever a program is a multi level marketing one, people say that it is going to get shut down in a year or so.
I’m glad you explained the difference between a multi level marketing program and a pyramid scheme. I have not been able to tell the difference between the two, even that I have read a lot of reviews of products which were described as pyramid schemes.
Thank for reading my Multi-Level Marketing Business Model review
It is an article to verify if the Multi-Level Marketing Business Model worth it.
Regards
John
Hey John!
I never liked MLM. I’m not into recruiting. Face-to-face at least. I could do it online, but still, I’m not sure that it can really really is profitable. I’ve checked the profit charts for a couple of these plans, and for most people (especially lower levels) it is peanuts.
Thanks for a very informative post!
Marios
Hi Marios,
For me, people are still earning good money with MLM – Multi Level Marketing. I classified it as a Scam, See why MLM is a Scam!
But then a lot of people do not have enough information of where they can really channel their energy to earn legitimate business online. If you don’t you don’t know. Information is very key in life. This is why we will keep writing articles to sensitive people on various scamming programs online.
I got scammed severally online before i got to Know Wealthy Affiliate; where you can be thought how to make money with your hobbies or passion. You will be thought how to leverage on what you like doing and start providing solution to help humanity.
You have a gift that can always make room for you, in the process of helping people out with your gift, you will earn money. This is what Wealthy Affiliate teaches.
Regards
John
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