You're heard of multi-level marketing. You've heard it can be a money-maker, but also heard that it can be a sinkhole for cash. You want the MLM truth, can MLM really create a residual income for you? The answer is: only if you want it to. Before making decisions, read more about MLM and what it's about.
Over sixty years old, MLM had its humble beginnings in the thirties and forties when a few daring entrepreneurs decided to take the initiative in the field of marketing and distribution. Buying products from a company at a discounted price, they would then go selling around the country at the retail price, raking in the difference. They then hired people below them who would do the same as they did, but for every sale, their recruiter would receive a cut. This next level would hire their own salespeople, also taking a sales commission, and so on.
The logic behind this marketing makes sense; instead of having one or two big sellers, a small body of salespeople sell the product, often more efficiently than a store, and receive compensation for their work. Since these transactions nearly always take place face-to-face, a customer base is also built along with the rapport and the public image of the product improves. It's a win-win situation ' people working as representatives are remunerated through their number of sales and referrals; the company makes a profit through straight profits.
It is an ideal situation for the average Joe or Jane who wants either a steady income or a little bit extra to supplement an existing one. Their salary depends only on how much effort they are willing to put in. If they take the pains to network, advertise and sell the product, as well as pick up some recruits along the way, then their bank accounts will reflect this.
Attitude is important, but once the foundations have been laid very often an MLM distributor can put on the back burner and watch the profits roll in. A successful cosmetics company, earning over two billion dollars in sales in 1996, was started by one person thirty years earlier and used the MLM strategy to get the business off the ground and soaring high.
There is often a big confusion between MLM and so-called 'pyramid schemes'. However, pyramid schemes (which are illegal, by the way) require some sort of start-up fee, and usually don't involve any sort of sales. The recruiter takes a small percentage of the start-up fee, and members further up-stream receive their cut, while the guy at the top gets his share.
The difference is that MLM relies on a salespersons ability to sell as well as recruit, and distributors who look after people 'down-line' will be rewarded by commission.
Do you now know MLM truth, can MLM really create a residual income for you? It depends. Only you can decide if you want to make it work for you. The structure is in place ' it's up to you to make the most of it!
About this Author
David Wood is one of the top Network Marketing Coaches online, who combines a unique style of online relationship building, social media, and old school, traditional prospecting techniques to create a magical combination of up front growth, duplication, and massive success. If you want David's formula for massive online success, visit David Wood's MLM Secrets now.
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