MLM network marketing has been touted by thousands upon thousands of MLM distributors as the ultimate way to wealth, independence and building up your own business with just a small investment in cash. But, if you really want to be successful in multi-level marketing, then there are a few things that you need to understand clearly in order to make those dreams of yours come true.
Many network marketing business opportunities seem to hype the potential of their business model, that are often truly great, while also downplaying the real work that has to be done to make more than a few bucks a month. The sad but true reality of MLM marketing is that the vast majority of people who sign up as a distributor for these companies, in the 80% to 90% range, never make more than what they spend on the products they are required to purchase each month. In fact, some never even break even and because of this fact there is a very high drop-out rate in MLM companies across the board.
MLM network marketing is a unique method of doing business compared to other types of more traditional businesses. Instead of paying for high-priced advertising campaigns, the MLM companies pay their independent distributors to share the message about the products they have. When a distributor signs up new customers or distributors, these people go into their “downline” and the distributor gets a commission for everything they purchase or sell.
The reason why these companies are called “multi-level” is because a distributor can earn commissions or overrides on the distributors in their “organization,” which typically reaches down several “levels” from their own position. For example, in many compensation plans of MLMs, if a person recruits a new distributor, then that person is on the first level under them. As those new distributors in turn bring in more new people to the business, the level of distributors under the original person extends and fills up, allowing them to earn money on all of the distributors beneath them for a given number of levels.
Because a distributor who is successful at recruiting new people into their MLM business can end up having many people on the various levels they can earn commissions on, the income potential is truly impressive. However, what very few MLM proponents will tell you is how very difficult it is to recruit people into the business and to keep them active and motivated, and also taking actions to build the business themselves.
Most network marketing companies also teach new distributors to first approach their friends, acquaintances and family members, and try to get them into the business. Unfortunately, these days most people have been approached multiple times by different friends and family members about these business opportunities.
Experienced and successful MLM distributors have a secret weapon that they often don’t talk about until after a person has signed up with their MLM network marketing as a distributor. You will find that most highly successful and highly compensated MLM distributors spend money every month to buy MLM leads, which are lists of people who have asked for information about starting a home based business. While these leads can work well, they are expensive. If a new distributor is on a shoestring budget, then they typically cannot afford this business tool and they end up struggling.
