Multi-level Marketing (MLM) is perhaps the most maligned business model, both within the business community and in the court of public opinion. Still, much of the criticism is undeserved, and misinformation runs rampant. Listen to your hosts debate the merits and pitfalls of this controversial topic. You’ll be surprised to learn that some traps are more hidden than you think!
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Sources for this episode:
- “Business Guidance Concerning Multi-Level Marketing” https://www.ftc.gov/tips-advice/business-center/guidance/business-guidance-concerning-multi-level-marketing
- “Multilevel Marketing” https://www.ftc.gov/tips-advice/business-center/guidance/multilevel-marketing
- “Multi-Level Marketing” https://www.investopedia.com/terms/m/multi-level-marketing.asp
- “Is Network Marketing Just a Scam?” https://www.entrepreneur.com/article/35744
- “Multi-Level Marketing and Pyramid Schemes” https://money.howstuffworks.com/pyramid-scheme2.htm
Benefits of MLM:
- If you have a sales aptitude or want to learn how to be an ethical salesperson, then this business model could be a good fit for you.
- You reduce your business risk, if you believe in the product or service offering and have used it before.
- While the odds of success are very low, it is possible to earn income in this business model, particularly if you get in early for a product or service that takes off in popularity.
- Do NOT harass family, friends, or even strangers with your MLM opportunity.
- Even though MLM is legal generally speaking, it is not legal in every state, city, and district. Double-check with local officials before starting your business and/or selling in a different location.
- Thoroughly read every contract or terms of service (TOS) agreement. Consider having a lawyer look at it before signing.
- Don’t participate in deceptive marketing/contract compliance techniques.
- Do independent research on the MLM. But apply a critical eye to internet rants. Also, beware of people planted in an audience trying to help the presenter get business.
- Don’t use friends and family as your entire business strategy, even if you genuinely think they’ll like the product or service. Additionally, think twice before inserting a friend or family member in your downline to avoid conflict.
- An opportunity that requires money up front from you deserves additional scrutiny. If you decide to move forward, do NOT invest money you cannot afford to lose.
- Fully understand the requirements to leave the MLM.
- It is not a get-rich-quick opportunity. It requires work just like any other business, and the odds of success are very low.