Network Marketing, Multi-Million Naira Business, or Just Scam?
Network marketing is not the same as pyramid schemes. A pyramid scheme can land you in serious trouble, as we will see later in this article. However, MLM or Network marketing is good business, and the prospect is good.
But you must always keep in mind that not all MLM or network marketing companies will be successful. Some are even illegal.
Here are four facts you must know about any MLM before you join:
What You Must Know
1. Research the company first
You may conduct a corporate profile search on Google by entering the company name.
Look for as much information about them as possible and consult with friends or others familiar with MLM. Typically, scammers stay for no longer than five years. You can check this post for ways to identify scam websites.
2. Find their Mentor/Support
A good MLM company provides mentorship on how to do the business. Many fake MLMs just tell you about the company and the level of commission that you can attain. Look for an MLM that provides a mentor that will support you along the way.
3. Full support from other members
Team support is very critical in the MLM company. If members assist one another, the firm is more likely to survive than if members operate alone. Members can help one another by discussing their lead generation strategies and so on.
4. Consistent and Hard work
Just like doing any other job, MLM or network marketing is not magic. It requires hard work. While you do not have to work 9-5. Still, you have to at least work on the MLM for 2 to 3 hours a day. You also have to be consistent. Network marketing is not a get-rich-quick scheme.
Many people claim to have made lots of money from network marketing. However, you can get in trouble if you are not careful. Let us discuss how MLM can land you in trouble.
Multilevel Marketing Can Land You in Trouble!
You may not know this, but the law is after you. Yep. You may want to reconsider telling those lies about your income. Are you aware that multilevel marketing has added numerous lies to only make things worse for the industry? Can you tell the difference between a pyramid scheme and an MLM? Do you know what is legal? Maybe it is time you learned.
Before I get into answers to these questions for you, I would like to tell you my version of mathematics. Suppose you had a perfect MLM group. Let call it a 5 widespread. Each person has also done their part. Failure comes when you run out of people.
Can you see this? It has to happen.
You can invent a product, but when your main focus is recruiting, which most MLM groups are about, you have to run out of people. How would you like to be at the start of a company with 5 people under you and 5 under each of them and so on? After a while, who cares if the company fails? The man at the top doesn’t. For a perfect downline of this group, it would fail no matter what. After 13 rungs, you would have 305 million 175 thousand, 781 people in this MLM group to make it interesting for math.
The sad part is the bottom people are paying, but there is no one to sell to. Yep, I know what you are saying. This can’t happen. Yeah, I know it will fail long before this. It always does. People fail in MLM.
Avoid multilevel marketing systems that compensate distributors for recruiting new distributors. Indeed, these ones are pyramid scams.
Why is it risky?
Because commission-based programs that reward distributors for recruiting new distributors invariably fail when no new distributors can be recruited. And when a scheme fails, the vast majority of people—with the possible exception of those at the very top of the pyramid—walk away empty-handed.
70% Rule in MLM
You are new to internet marketing, but did you know that some of your most prominent veterans of MLMers do not know about the “70 Percent Rule”. I did not make this up. I will try to make sense of this to you.
For an MLM Company to be legal, 70% of all the products must be sold out of the network or to a non-member/non-distributor.
Let’s talk about you. Are you personally involved in the lies that are told about the MLM programs out there? Are you exaggerating your income by a few thousands in Naira? Are you telling people they won’t have to do much of anything at all? Well, it’s time for you to clean up.
If you are even repeating what the company tells you to say and it is a lie, you are responsible.
You recall any claims others have told you that convinced you that MLM was the way to go. MLM was the way of the future. Let me assure you, it was never the way of the future. It has always been a sore thumb. There was a rumor most likely started from MLMers that Harvard University taught MLM. To set that record straight, Harvard, Stanford, or any other college that I know of does not teach Network Marketing. Most of them detest it.
Another claim that some MLMers have rumored is that MLM has made more millionaires than any other form of marketing in the industry. I think I have read the figure to be about 20%. If this is true and real estate produces 90% of all the millionaires out there, then we have another mathematical problem. However, I will simply say that this is so far-fetched that it is not worth writing about. 1% of goods and services sold in the US would be about 55 billion. MLM sold about 10 billion. Whoops, 1% of goods making 20% of the Millionaires? Nice trick!
That is some of what I discovered throughout my study into MLMs. Regrettably, the business concept is most likely fraud concealed under deceptive phrases. You’re better off hitting the lotto and then marketing yourself as a business opportunity.
I believe I read somewhere about a business opportunity involving the lottery.
“Additionally, MLM is not a substitute for traditional means of marketing. It is in no way a credible competitor to other marketing strategies. Rather than that, MLM is a new investment plan couched in marketing jargon. Its authentic products are distributorships that are marketed via deception and inflated revenue claims. Individuals purchase items to climb the sales pyramid. There is always the potential that you will become wealthy, if not through your own efforts, then by the efforts of some unknown individual (“the big fish”) who may join your “downline.”
“Finally, all the free time you’ve been promised. Forget about it.
Making money in multilevel marketing involves a significant time commitment. Apart from the inherent hard work and talent necessary, the business model occupies a bigger portion of one’s life and time than most jobs.
Everyone is a prospect in MLM.
Do you want some good news? If you are thinking about joining an MLM plan, take your time and learn everything you can before signing up. Check the company record, the background, the product, and if it is competitively priced? Stay away if it is inflated. If it takes a large investment upfront, RUN! If it is a requirement to recruit, then don’t join up. That is called a pyramid. If you have seen a legal MLM, where you can have the collaborative approach, where they have products to be sold to members outside the MLM, join it.