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Network marketing and MLM

Posted by Michael Bloch in web marketing (Friday November 3, 2006 )

Have a hankering for fancy yachts, beachside villas, designer label clothes, diamonds, fast cars and only having to work 2 hours a day to get all these things, *without* having to sell any products? Watch out; you may be a prime candidate for MLM (Multi Level Marketing) business pitches… or perhaps drug smuggling :).

I can’t say I know much about drug smuggling (although I do advise against it as a career move), but I do know a little about MLM, aka Network Marketing.

How it works in a nutshell: a company offers products or services that are only available via a network of independent distributors or agents. In order to join the company as an agent, you need to pay a joining fee, buy training products or the product itself. As an agent, aside from selling the product, you are also strongly encouraged to recruit others using basically the spiel that brought you in.

As you bring new people in and they make sales or recruit new agents, you receive a commission. If those agents also bring in agents, you also receive a cut of their sale and so on through x number of tiers. At each level, your commission % becomes less.

The idea is that the more agents you recruit and the more agents they recruit, the more money you make. That’s where not having to “sell” a product comes in – the agents you recruit, their agents etc. do that for you – in theory.

Sounds great huh? The company will even provide you with specialist training and conferences to help you recruit more agents..but of course, you’ll need to pay for these tools that will turn you into a Triple Diamond Ruby Power Distributor :).

I’m not stating that all businesses based on Network Marketing principles are scams, just that most floating around the web based on this sort of model are. Some are nothing more than fancy pyramid schemes, which are illegal.

If you’re considering getting into MLM, you might want to take a look at my article “MLM and network marketing – viable online businesses or scams? ” before spending your time and cash on such a venture; especially where the “product” you’re meant to be selling is a get rich quick program or an online business/marketing course.



 

 
1 comment for Network marketing and MLM
  1. Yes I have been involved in MLM scams and didnt do any wonders for me. V.Good and precise article.

    Salma SHah

    Comment by Salma Shah — November 3, 2006 @ 8:53 am

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