Multi-Level Marketing or MLM, Is This Right For You? Everything You Need to Know.

Multi-Level Marketing or MLM, Is This Right For You? Everything You Need to Know.

The vast majority of people who work at home do so in some multi-level marketing opportunity. What does that mean? If you have ever heard of Tupperware, Pampered Chef, Mary Kay or Avon, you know what a MLM is.

In short, a multi-level marketing opportunity refers to those that encourage you to find people to work in your “downline” and this brings more money to you without you doing much more work. Let’s look at this in a bit more detail.

What is a MLM?

When you begin working for a company like Pampered Chef, you become the downline of another consultant. When you sell products, your “upline” makes a small amount of money off your sale, all without lifting a finger. It’s a little like passive income. Of course, there might be some work finding people to be in the downline, but once that’s done all that’s left is the general challenge of managing people and encouraging them to do well in their jobs so the upline does well in theirs.

When you become someone’s downline, you can focus on your own business and building a client base. You might forget all about building your own downline, but most people who work for MLM-based companies will eventually decide to work on building their own downline so they can make additional income.

Once you become an upline, you make money off each sale that your downline makes, and your upline makes money off your sales as well as the sales of your downline. It might sound complicated at first, but when you consider the general premise as explained here and then combine that with the concept of “multi-level marketing”, it becomes a bit clearer.

Pros of MLMs

There are many advantages to working in a MLM structure. First and foremost, there’s support. Starting a business at home can be scary for a mom, or anyone, and knowing that there’s a built-in support network can be reassuring. You will know going in that you have others you can call with questions, meetings you can attend that give you selling techniques and other support processes.

In addition, depending on the MLM you sign up with, you might be given selling materials, information about seminars you can attend, and other things that will help you build your business.

In addition to all of that, if the product you are selling has already established itself as a good product that has a good base of customers, you might likely already have a built-in customer base that comes to you rather than you trying to court them. As part of your starter kit – which you purchase – you will also likely have a starter set of sales and order forms.

Cons of MLMs

Joining a MLM isn’t for everyone. It does require selling things, and many moms aren’t interested in selling things, particularly at home parties. For those who do sell, there are minimum requirements to meet, and this varies from company to company. These minimum requirements might be met each quarter or month and some companies will put on hiatus a consultant or salesperson who doesn’t meet their minimum even just once.

If you are interested in selling a product, but don’t want to have parties, you might decide the best way for you to make money is to do online sales (which most MLMs will allow) and to have people in your downline. You can spend time training them and helping them increase their sales, which helps your bottom line.

The other people in your life – friends and family – might not look favorably at your decision to sell a product in a MLM structure. They might think that you are always trying to sell them your product and they might tire of being invited to your parties. All of these are things to consider before you sign up with a MLM.

And, finally, even though you might spend a good deal of time building your at-home sales business, some of the people you know might not see what you do as a real job, and you’ll have to consider how to deal with that.

As you can see, there are many advantages and disadvantages of joining a MLM. Many people have made very good money selling products this way, but knowing the ins and outs is important.

How to find the right MLM for you

Many moms have found success as part of a multi-level marketing company. They might sell skincare or makeup products or seasonings for cooking. The moms who have found success have all found the right company for them, the company that pays well and that provides them with that they need to make their business work for them.

How can you find the right MLM company for you? Think about asking yourself (and the company) the right questions.

What is your take?

This is, how much do you get from each sale? This number can vary widely from company to company so pay attention to this information when you do your research. Less is not necessarily bad. If you sell products that people will buy more than one of (say, those seasonings for cooking), and you get a small percentage of the sale, you’ll likely will do well if people buy several items each time they make a purchase.

Conversely, you might get a lager percentage on some sales, but if people buy those items rarely and only make single purchases, your take might actually be lower than someone else who sells smaller items and takes a smaller cut.

There is no set standard here, but make sure that you can make enough sales to meet your income goals. Ask other company representatives how they do and how much they sell to meet their individual income goals.

How likely will people be to buy the product?

There’s a general consensus among people who sell products for MLM companies that consumable products are the best to sell. That is, products that people use or eat and then need more of. This might be items skincare and makeup, and food products. It can also be products for a hobby, since once the item is used, the customer might want more of that product or a similar product so they can continue their hobby.

In some cases, it can be hard to build a customer base that will come back to you again and again for a particular product. If you decide to sign up with a home décor company, as a representative, for example, you might do well selling to people but those people aren’t going to need more of your product. They might come to you when they need a gift, or they are redecorating a room, but they won’t consume the products the same way they will consume their food products, or need to replace their makeup products.

Of course, you should go with your interests, so if you are more interested in home décor items, then by all means sell them. Your passion for the product will also bring people to you for help and word of mouth will get out that ensures people know you are a good person to buy from.

What is the reputation of the company?

This is important, because the reputation of the company dictates the kind of experience you can expect to have and the experience your customers can expect to have. What do we mean by this? Simply put, if the company has a poor reputation, you will have a tough time selling, no matter how good they are to you.

Ask questions of current and former representatives of a company you are thinking of working for. What kinds of experiences did they have? If they report that their commission was good and they enjoyed some of the perks the company offered, but said that often they ship slowly and bill incorrectly, you need to think twice before signing up. Even if they treat their consultants like kings and queens, your customer will feel slighted if they too are not treated well. In the end, it’s the customer who matters, so make sure that company is one that your customers will enjoy dealing with. And also make sure you are prepared to be the face of that company, even when things don’t go smoothly.

Working as a rep for a MLM company can be very rewarding if you find just the right one. Do your research and make sure that a particular company is the right tone for you.

Choose the right MLM for your needs

If you are a mom looking for an at-home business, you might be tempted by a multi-level marketing opportunity, like selling Avon or Pampered Chef. But there are literally hundreds of products you could sell and as many companies you could work for selling those products. How do you choose the one that’s right for you? Let’s look at some criteria to help.

Product quality

Most people who sell a product through one of these companies discover the product when they attend a home party where the product is being sold. They might find that they like the flavor of the food, or the ease of makeup application or how they feel after drinking the drink.

That means, then, that there’s a belief in the product’s quality before signing up with the company. But if you decide to sell something that you have never tried before yourself, you have to do a bit more digging. Make sure that the product has good reviews, that it does what it promises and that the company itself is a good one that stands behind its products.

Investment

How much will it cost you to get started in your business? While you should never have to pay in general to work for a company, there’s always a start-up investment when dealing with a MLM. You will buy a kit, or supplies, or a starter supply of something. Much depends on the company as to what you need to buy and how much it will cost.

Can you afford the initial investment it takes to get your business started? Many MLM companies will let you start with either a basic, bare bones kit, or you can purchase a kit that includes samples, sales orders and the like. In addition to whatever kit you choose, however, you will also need to purchase business cards, perhaps a website, and other office and business supplies.

Support

What kind of support does the company offer its consultants? Can you call someone during your start-up period for advice? Is it free? What kind of support might you get from the others who work for the company? Will your upline provide any support? Is there any training efforts that will help you as you establish your business?

One of the best aspects of signing up to sell a MLM product is the built-in support that most companies offer; though not all companies do offer that support mechanism, the best ones will. Be sure to ask the right questions before you sign up.

Time involved

Does the time requirement for working your business work for you? If you decide to sell food or kitchen products, for example, you might need to prepare food in advance of each party. Do you have time for that? If you sell scrapbooking products, you might need to make an album full of sample pages with the company’s products. Can you add that into your already busy schedule?

If you don’t have a lot of time to give to these kinds of endeavors, you might want to think about that before you sign up with a company. Other products, like makeup or skincare, might not require as much preparation.

Potential for earnings

Carefully examine the company’s compensation package. How much will you make from a sale? How much can you make from a party? Will you make enough to cover your expenses and bring you a nice profit? Sometimes it can be hard to turn a good profit from MLM companies. Many moms report losing money, likely because they don’t do the research ahead of time that you will do.

Your market

Do you have a good base of potential customers now? When you first start your business, your initial customers will likely be friends and family. If you have a tiny family and few friends, your potential for getting that business off the ground quickly and easily will be shaky.

Carefully consider the market that you have. Will they buy products from you? Not everyone will be willing to hear your presentation and might even feel put on the spot by your desire to sell the products. Make sure you have a comfortable base of potential customers to begin with.

Doing a bit of research before you jump into a new earning opportunity can be the difference between a successful endeavor and a failure. Make sure you do everything you can to achieve the former.

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