MLM's - Are They a Viable Online Business?

You've seen those ads "Make $10,000 instantly with a Business on the Internet" . Okay, that's an exaggeration. Ads promising wealth on the Internet usually belong to people participating in Multi-Level Marketing/Networking (MLM/NM) programs. Trying to fulfill that promise of wealth and financial freedom. The focus of this series has been on how you can profit from the Internet Revolution. It is only appropriate that we devote an article to Multi-level marketing/Network marketing.

Three Things First before continuing.

We do not endorse or promote any Multi-level marketing opportunity on our site. I know several l people using these programs with success and will be more than glad to refer you, if you think a MLM opportunity is for you.
There are low-lifes in any industry. MLM/NM is no acceptation. MLM's are being promoted as the best fit for an Internet business. The two were made for each other. Multi-level marketing programs are legitimate business models. They are under the scrutiny of the Federal Trade Commission.

http://www.ftc.gov People make their money when products are sold. Sometimes they are confused with pyramid schemes. A pyramid scheme is when money is transferred from a lower level to a higher level. The people closest the top benefit from the people on the lower levels contributing money. The lower levels will never see the full benefits of the money the contributed to join. Some pyramid schemes will disguise themselves as MLM by selling some type of product or services but the price to join is way and above the actually value of that product. It's not the selling of the product that brings in the money, it's when the people join.

What are the Advantages of an MLM

A properly run MLM system is a win-win for both company and distributor. When you sign up with a Multi-level marketing company, you are considered an independent contractor. That makes you your own boss.

First advantage is you're the boss of your business. You set the hours you want to work.

Other advantages include.

Low entry barriers. You don't need a college education or any particular education to begin your business.
Start-up costs are low. You can work out of your home.
You don't need to quit your current job. You can build your MLM business until it can replace your current income.
Residual Income. You keep earning a percentage of your downline sales. As long as they are selling products.
You are rewarded in proportion to your efforts.
Multi-level marketing companies have pre-defined business and marketing plans. They also manufacture the product and drop ship it to our customer. Many of them handle the paper work. What are the Disadvantages.

Alienating your friends and acquaintances.

These are the people your upline will have start marketing to first. Your upline will have you contact these people to try to "recruit" them into the business. I am sure all of us have been approached by somebody to join their program. The big emphasis is on financial freedom for joining. Some of these companies want you to use the so-called "Curiosity Approach". This approach certainly puts my guard up.

A better approach would be to a call your friends and let them know you looking at MLM company to make some extra money. Ask if you could drop of some products from them to try and get their opinion on them. This will be a good indication of how well your products will sell.

You need to be a Self Starter and able to lead and motivate others.

To earn the residual income, you must recruit people. This is where you make the BIG money. You have to stay on top of your downline to make sure they are actively recruiting. You need train and motivate them. Your upline should provide you with the training you need. Don't count on somebody to motivate you though.

Financial Commitment.

Some programs require you to buy a certain amount of products every month to stay active and eligible for the program. Make the company is offering products that you are going to use. If you don't like the product, look for a company with products you do like.

WORDS OF WISDOM

MLM as an ideal type of Internet Business.

This is one of the biggest selling points in joining a Multi-level marketing company. You get to have your own Internet business. Check out the Rules and regulations very carefully. Some companies have very strict restrictions that your business is nothing more than a glorified online ordering form with no way for you build the business online. Many make it easy for their distributors to run their businesses online.

Some companies provide templates to set up a website. Others let you create your own web site. I haven't come across one company that approves of spamming. The more flexibility you have to market online, the better the chances you have of someone finding your site and buying. Especially if you can optimize your web sites for the search engines

The URL or web address.

There are companies that make your name a part of their web address. For example. www.mymlmcompany.com/myownname.html You can print this on your business cards as your web address. Some one visiting the site could bookmark and come back easily. You still get the credit for the sale. Others allow you to have your own domain. There are MLM companies that you just direct people to the main site. They usually require a passcode to enter or to purchase. Even if someone bookmarked the page, without the code they can't enter. You could easily loose the sale. The Internet is about convenience.

One company I researched actually gave you three options to ensure the right person got credit in case you forgot the passcode number. You searched for their company id number by their name, email address or their business name.

The System

There are some MLM companies that say the have a proven system for success. Most of the time it is not the company but the distributors that have developed this system. A lot of them are nothing more than motivational systems with very little training on growing your business. There is big money in motivational materials. You may have to spend hundreds of dollars a month on these systems. How much product are you going to have to sell to afford the training system? Is there any emphasis on selling the products and obtaining customers or is it on recruiting people and getting them on the system. Does the Multi-level company produce their own business support materials? If so, why is emphasis on buying distributor produce business support materials?

I compared training programs of the #1 affiliate program for 1999 The 5 Pillar Program to the # 1 MLM company. What a shock. Both companies offer quality products. Joining the 5 Pillar Program is Free. Hundred for the other. The #1 MLM company systems cost about $225 a month for the basics including a passcode protect web page. That doesn't include recruiting or showing the plan supplies. That is just the training/motivational system. You need to sell about $2000-$4000 in products a month to support the basics. This system is not put together by the company but by the distributors. All the training material, software, manuals are free in the 5 Pillar Program. You also get weekly coaching through a newsletter. There is also email support. The 5 Pillar program also offers lifetime customers and commissions. 5 Pillar Review If you need a website, the 5 Pillar program offers the service to register your own domain name, build a site with unlimited pages and host it for the year for under $100 (US).

Multi-level marketing was once an alternative for people who wanted to start business but didn't have the capital, knowledge, or time to start one. Franchises had become too expensive for the average person. Many have been able to obtain financial freedom through network marketing. You can still achieve this freedom today.

The Internet has opened up many other possibilities to own a business online with a low cost start-up. Multi-level marketing can be the best option for you to have an Internet based business. You just need to do some investigation. Ask lots of question. Don't let anybody pressure you to join. There will be a lot of emphasis on recruiting. The Direct Marketing Association advises to take a balance approach. It's important to have customers as well as downline. There must always be a legitimate product being sold and compensation on the sale of that product.

Customers will give you the immediate income and distributors will give you the residual long term income.

Find out if MLM is for you by visiting the Direct Selling Association at: http://www.directselling.org/career.stm

And the Federal Trade Commission has online business brochures at: http://www.ftc.gov/ftc/consumer.htm