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Grasping the Ups And Downs of MLM

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Grasping the ups and downs of multi level marketing (MLM) will require you to think alternatively like a consumer and a seller. This seeming incongruence can be explained by the dual nature of the business:

  1. On the one hand you are selling a product or service. Actively searching for customers, you are marketing the product to the best of your ability.
  2. On the other hand you are looking for fellow distributors, recruit them, train them, and then help them to find ways of their own to sell the product and recruit others.

Companies love this model of marketing for a variety of reasons. First and foremost, there is no longer the need to pay a large sales force to market the product. After all, if you can get away with only paying for results, you will decrease your overhead tremendously. Add to this the fact that you no longer have to worry about renting a large store front, pay employment taxes or health care benefit, and – last but not least – you do not have to pay the salary for an individual who will turn out to be a less than gifted seller.

Individual network marketers like the idea that they can set their own hours, have a flexible schedule, and may use their own imagination to find innovative ways of marketing the products they are selling. For those with the selling gene, this is an amazing opportunity to really make some money and you will find them becoming the movers and shakers of the industry. In addition to the foregoing, the fact that they will profit from the sales made by those whom they bring into the business is a huge incentive and can lead to a quick respectable residual income source.

Gasping the ups and downs of MLM requires you to also look at the downsides presented by these very upsides! Take for example the fact that the business no longer has to pay for sales staff. While this is true, the fact that the product being sold may not be very attractive may lead to a severe lack of overall sales staff. In addition to the foregoing, when no longer in the position to demand eight hours of solid work, many companies find that their network marketers may dabble in sales an hour here or there, but by and large will not put in the time and effort needed to really make it count.

Conversely, those who enjoy the notion of profiting from a sizeable down line need to remember that a down line profit is only as good as the candidates currently part of it, and if you end up recruiting someone who will not put in five to six hours per day but maybe barely that amount of time per week, you will find that you will not make much of a profit at all. Add to this the fact that successful marketers may desert your down line in favor of a MLM opportunity that pays more, offers better perks, and also perhaps hints at a promotion that would land the individual closer to the top of the company, and you can see why a nice income can suddenly drop down to virtually nothing, especially if your down line is sustained fiscally by one individual.
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