What Is Happening to MLM?
| Category: Networking(MLM) | Date: 2003-10-16 |
I have lots of people asking me what in the world is happening to MLM? Well that's a good question and deserves a thoughtful answer.
Over the past two years a lot has happened to MLM on the Internet. The most obvious thing is that the old MLM systems are not working like they are supposed to. People are getting smarter and can recognize hype for hype and owner oriented profit schemes more easily.
People are not biting on the time worn scams so common on the
Internet these past few years. The old style of MLM, promising fast and easy money just plain doesn't work in today's web environment. Impossible claims for quick and easy results with a fully automated system and with no work involved, just do not cut it anymore. Why? Because systems of this type do not work for anyone except the owners of the MLM in question, that's why.
Why don't they work? Well to be successful in any MLM you must work your tail off and learn how to properly advertise and close your sales. Not only that, but you must actually recruit people to a downline and train and motivate them to duplicate your effort. Many people want to participate in MLM's but never learn the basics of how to sell or close sales.
Then we come to compensation plans; most are front-loaded to benefit those high up in the MLM downlines or matrices. Most compensation systems do not really pay enough to properly reward a person for building downlines. Let's face it, under the current rules being enforced by most of the regulatory agencies, paying for recruiting people is considered to be building a pryamid and that is a definite no-no. By law the majority of income from MLM's must result from the sales of products and services and not from recruiting people into the program.
That does not mean that referral fees cannot be paid but such fees should be more or less fixed at the level compensating those who do the recruiting for the time and work involved.
Recruiting cannot be the main purpose of the MLM. Yes, downline clubs may charge a membership fee and pay a referral fee for new members brought into the program, but the main source of earned income must come from the retail sales of products and services.
It seems everyone has a system to get magic results with little or no work or time requirements. I wish it were so, but it just plain does not work that way my friend.
If you do not know and understand what a good MLM should offer you, it is time you took the time to find out. Let's take a minute and talk about that and see what we can come up with.
For example never join a pure downline club or buy a membership in one until you know what products or services are offered by the club for you to sell. Then determine if the compensation plan offers a real percentage of retail sales as commissions and not some cooked-up business volume system, which requires reaching certain levels of production to qualify for commissions. If the MLM requires you to purchase a product in order to be authorized to sell it, make sure you can buy the product or service at a discounted rate or at cost. Required purchases for members must be, by law, not subject to commissions for MLM upline or the company involved.
Don't mistake these costs for subscription fees you may be required to pay for access to a commission-paying program. If such subscription fees are required make sure this is the only cost required and that the company furnishes the necessary seller web sites and other normal tools you may require to run your business. There is nothing wrong with charging subscription fees as long as each level of the MLM upline receives the same amount as the Company. These subscription fees are considered direct compensation or referral fees rewarding the Affiliate's activities in building their sales organization. These fees do not generate business volume for Affiliates nor are commissions paid on them. They are a source of residual income but commissions are paid only on the sales of products and services.
Always check out the Support Plan and System promised by each MLM. Look at the Frequently Asked Questions (FAQ) Pages, which are part of most MLM Home Web Sites. Do the questions asked and the responses seem reasonable and make sense or are they just plain old boilerplate responses which can relate to any business?
Check the response time by asking a question. See how long it takes to get a response and what type of response do you get.
Look hard for a professional appearance in Web Sites and promotional material. Bad spelling, bad grammar and math mistakes are an indicator of non-professional or 'hurry-up' type work and nine times out of ten such Web Sites indicate a 'shaky' proposition and should be avoided. Serious people take the time to do things right and portray a professional image. Remember that.
Does all this mean that all MLM's should be avoided? Of course not. The MLM concept is still one of the best ideas ever conceived for a home type business and if properly operated can bring significant rewards to those who learn how to run them.
Yes there are some great MLM opportunities out there. Learn to recognize them, but be prepared to work and spend time and money to make them successful. No one gets something for nothing in this world, especially in a business sense, and we must always remember that.
Owning your own business is exciting and can be profitable, so give yourself a chance and learn what you are getting yourself into before you commit yourself. Yes, there are millions of dollars to be made on the Internet and working MLM's are a proven way to do it.
Copyright © 2002, Gary E Layton
About the Author
Gary Layton is co-owner of PathTrax.com. By providing their users the ability to measure and track results connected to a specific ad or advertising media, PathTrax is helping small businesses expand the profits in their bottom line. PathTrax delivers flexible tracking URL's to track Who, Where, When, How Many? All for only pennies per day. http://PathTrax.com/x.pl/GL121,3
quests2@shasta.com
http://PathTrax.com
Over the past two years a lot has happened to MLM on the Internet. The most obvious thing is that the old MLM systems are not working like they are supposed to. People are getting smarter and can recognize hype for hype and owner oriented profit schemes more easily.
People are not biting on the time worn scams so common on the
Internet these past few years. The old style of MLM, promising fast and easy money just plain doesn't work in today's web environment. Impossible claims for quick and easy results with a fully automated system and with no work involved, just do not cut it anymore. Why? Because systems of this type do not work for anyone except the owners of the MLM in question, that's why.
Why don't they work? Well to be successful in any MLM you must work your tail off and learn how to properly advertise and close your sales. Not only that, but you must actually recruit people to a downline and train and motivate them to duplicate your effort. Many people want to participate in MLM's but never learn the basics of how to sell or close sales.
Then we come to compensation plans; most are front-loaded to benefit those high up in the MLM downlines or matrices. Most compensation systems do not really pay enough to properly reward a person for building downlines. Let's face it, under the current rules being enforced by most of the regulatory agencies, paying for recruiting people is considered to be building a pryamid and that is a definite no-no. By law the majority of income from MLM's must result from the sales of products and services and not from recruiting people into the program.
That does not mean that referral fees cannot be paid but such fees should be more or less fixed at the level compensating those who do the recruiting for the time and work involved.
Recruiting cannot be the main purpose of the MLM. Yes, downline clubs may charge a membership fee and pay a referral fee for new members brought into the program, but the main source of earned income must come from the retail sales of products and services.
It seems everyone has a system to get magic results with little or no work or time requirements. I wish it were so, but it just plain does not work that way my friend.
If you do not know and understand what a good MLM should offer you, it is time you took the time to find out. Let's take a minute and talk about that and see what we can come up with.
For example never join a pure downline club or buy a membership in one until you know what products or services are offered by the club for you to sell. Then determine if the compensation plan offers a real percentage of retail sales as commissions and not some cooked-up business volume system, which requires reaching certain levels of production to qualify for commissions. If the MLM requires you to purchase a product in order to be authorized to sell it, make sure you can buy the product or service at a discounted rate or at cost. Required purchases for members must be, by law, not subject to commissions for MLM upline or the company involved.
Don't mistake these costs for subscription fees you may be required to pay for access to a commission-paying program. If such subscription fees are required make sure this is the only cost required and that the company furnishes the necessary seller web sites and other normal tools you may require to run your business. There is nothing wrong with charging subscription fees as long as each level of the MLM upline receives the same amount as the Company. These subscription fees are considered direct compensation or referral fees rewarding the Affiliate's activities in building their sales organization. These fees do not generate business volume for Affiliates nor are commissions paid on them. They are a source of residual income but commissions are paid only on the sales of products and services.
Always check out the Support Plan and System promised by each MLM. Look at the Frequently Asked Questions (FAQ) Pages, which are part of most MLM Home Web Sites. Do the questions asked and the responses seem reasonable and make sense or are they just plain old boilerplate responses which can relate to any business?
Check the response time by asking a question. See how long it takes to get a response and what type of response do you get.
Look hard for a professional appearance in Web Sites and promotional material. Bad spelling, bad grammar and math mistakes are an indicator of non-professional or 'hurry-up' type work and nine times out of ten such Web Sites indicate a 'shaky' proposition and should be avoided. Serious people take the time to do things right and portray a professional image. Remember that.
Does all this mean that all MLM's should be avoided? Of course not. The MLM concept is still one of the best ideas ever conceived for a home type business and if properly operated can bring significant rewards to those who learn how to run them.
Yes there are some great MLM opportunities out there. Learn to recognize them, but be prepared to work and spend time and money to make them successful. No one gets something for nothing in this world, especially in a business sense, and we must always remember that.
Owning your own business is exciting and can be profitable, so give yourself a chance and learn what you are getting yourself into before you commit yourself. Yes, there are millions of dollars to be made on the Internet and working MLM's are a proven way to do it.
Copyright © 2002, Gary E Layton
About the Author
Gary Layton is co-owner of PathTrax.com. By providing their users the ability to measure and track results connected to a specific ad or advertising media, PathTrax is helping small businesses expand the profits in their bottom line. PathTrax delivers flexible tracking URL's to track Who, Where, When, How Many? All for only pennies per day. http://PathTrax.com/x.pl/GL121,3
quests2@shasta.com
http://PathTrax.com
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