Multi-level marketing better known as MLM was stared in 1945 by the California Vitamin Company which became Nutrilite which is now owned by Amway. Today there are tons of different MLM programs for just about every kind of product or service, including nutritional supplements, household products, cosmetics, diets, telecommunication services. Individual MLM programs are often under scrutiny because many experts and consumers believe them to be a pyramid schemes.
We’ve all received those offers from friends or random people who participate in MLMs to “make money in your spare time” “Control your own time and freedom”, “own your own business” etc. Many of these offers come through our Facebook and Instagram feeds daily and for some of us may even caught our attention once or twice. Then we might start to ponder is this MLM a legit way of making money?
Pros of MLM
- Small amount of risk – For many of us who don’t have a lot of capital to risk when it comes to the “risk factor” MLM is one of the lowest risk we could take. Rather than in a traditional brick and mortal business, the startup cost can be quite high. Therefore, deterring many people away from starting their own business. However, in a MLM style business with a couple of hundred dollars, it is possible to get started with a company of your choice, marketing products that you consume already.
- Residual income – Now for majority of Americans trying to figure out how to create residual income is always something near and dear to our hearts. Having money that comes every month on a certain day brings the financial security many of us desire. However, discovering ways to attain residual income is better said than done. But with MLM it gives you the opportunity to enjoy to enjoy residual income. After the initial effort of building your team is completed, you can enjoy the residual part of that business relationship.
- The income potential – While working in a specific industry there is usually a cap on how much you can make, but with MLM there is no cap on how much money you can generate.
Cons of MLM
To start, MLM often attempts to mask itself under other names in hopes that its bad reputation is not noticed. That’s why it’s often referred to “Network Marketing”, “Direct Sales”, or even “Community Commerce.” But MLM is the only term that explicitly states the “levels” that is indicative of what it truly is. With that out of the way, here are some cons of MLM.
- Fee to “get your business started” – Most MLM business models are usually based around selling products. Therefore, the up-front fees should be unnecessary and pointless.
- Purchases encouraged as “investment” – Often times MLM companies want you to think that making purchases for products within the company will advance your status, or grow your business, more than satisfy sales.
- High income projections – Many companies love emphasizing how much you will make, but rarely mention how you are going to make it. MLM opportunities have proven historically to be, at best, a little better than a side income for most people.
- Money from recruiting – Many MLM business models call for us to recruit another distributor than a new customer. Therefore, their products are not what is driving the company it’s the recruitment. A company that is filled up with people but no products is still just a group of people, not a thriving company.
What are your thoughts? Do you think MLM is a viable business model? Comment below and if you enjoyed this article please share!
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