The mere mention of the term multilevel marketing often causes a shudder among the uninformed who still believe that network marketing is a takeoff on illegal pyramid schemes and over the years have been harassed by friends and family members telling them how they are not thinking clearly for rejecting the invitation to get in on a ground floor opportunity.
However, network marketing, or multilevel marketing, is a legitimate business practice, providing it meets certain criteria established by government regulators. Essentially, a marketing network consists of a group of people working together for a common cause, and in most cases with multilevel marketing, it is to increase sales for a particular business or product. The focus of the program should be on selling merchandise and while recruiting new distributors into the fold is important, it should never be the primary focus.
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While most programs involve payment of an entry fee, so to speak, there should be no continuing requirement to buy product in order to earn commissions on sales. Additionally, members of the network who buy products for personal use usually do so at a wholesale price and earn no commissions on those sales. Companies that withhold commission payments unless a member of the group has a certain number of people in their downline may also be walking a thin line between a legitimate business and a pyramid scheme.
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With a legitimate business there are certainly attempts to bring in new distributors into a persons downline, but it should not be the primary goal. The benefit to those doing the recruiting will be the payment of commissions on the sales those distributors make and not on the initial fee they pay to join in the fun. While some shun the idea of having to pay to have a sales job, it is consistent with traditional business models that charge a franchise fee for the right to sell products under the name of an established business.
However, the lines between a scam and a legitimate network marketing business can be blurred if they fee is divided among members of the upline and the only thing the person receives for their payment is the right to recruit additional people for their own downline. There should be some tangible evidence that they received something of value for their payment such as training materials and the ability to call for help if they feel overwhelmed. One of the most common complaints from MLM participants is the lack of information.
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If the sales training covers compensation plans and how to recruit new distributors instead of how to sell the product and the how the product can benefit the customer, then the plan may be flawed in its approach to multilevel marketing. Selling the right to recruit new members is not the legal focus of a multilevel marketing plan and legitimate businesses would rather sell more product than have more people in their downlines.
Patience and dedication are required to be involved in any network marketing plan, but it also require confidence that what you are doing is offering a benefit to others as well as creating an income for yourself and those in your downline.
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