Friday, June 26, 2009

3 Common MLM Pitfalls and How to Avoid Them

Every time people try to join a multi-level marketing or MLM, they have a set of questions in mind: What are the chances of earning really good money? Is MLM the best possible way to earn more money or does MLM reap more money from you more than what it can give you? How reliable is the company? Will the effort and achievement that you will give be paid off?

All of these things are considered in an MLM program. However, like any business, MLM programs do not guarantee sure success unless you work hard for it. That is why the triumphant MLM marketer knows how important it is to incorporate the right blend of determination, hard work, a little luck, and the willingness to learn everything.

Basically, MLM is a new way of doing business that primarily entails the combination of franchising and direct marketing. With MLM, people have to work together in order to reap success. That is why most people also consider MLM as one way of network marketing.

For this reason, MLM marketers know how important their downlines are. They know that by helping other people to succeed, they become successful as well.

Then again, not all MLM programs are created equal. Hence, there is always a possibility that a particular MLM program may not work best for you. The result: many marketers tend to fail on their MLM career.

Therefore, for those who want to know how to avoid failing in MLM, here are three common pitfalls that you have to watch out. Avoiding them and generating an alternative will make you succeed in MLM.

Pitfall #1: Very high expectations

The problem with most MLM marketer is that they are so enticed with the good things that their recruiters had been telling them that they end up expecting too much on the business. Just like the others, they expect that the business will definitely allow them reap more money at once.

It is the "get rich quick" syndrome that really brings most MLM marketers down. And because most people would love to earn more money in the shortest possible time, they easily fall as prey.

What they fail to realize is that MLM is just the same as any venture that needs dogged determination, pure dedication, and untainted hard work.

The Solution

In order to succeed in MLM, people should keep in mind that it is not a "get rich quick" scheme. There should be lots of determination and hard work in order to succeed.

Moreover, try to shun away from MLM programs that has too-good-to-be-true features. The things is, they are what they are, really too-good-to-be-true program.

Pitfall #2: Lack of education

The problem with most people who fail in MLM is that they do not have enough education about the program that they tend to overlook the important factors that need to be considered.

There are those who do not take the business seriously. They thought that it is just a trend and that as soon as their interests wane, the business will fail as well.

Also, the problem why people fail in MLM is that they want to earn money without having to exert too much effort. They do not take the initiative to learn the things that will help them in their MLM career.

Indeed, no knowing the important aspects of the business will make you believe things in the most deceptive way.

The Solution

They should believe on the saying that it is better to earn while you learn. Try to hone your skills in such a way that you will be able to develop a good selling point in your career.

Educate yourself with all the possible information that you can use in dealing with the program. Try to learn new tactics and generate new selling methods.

Pitfall #3: Failure to empathize with the customers

Another reason why most people fail in MLM is the fact that most marketers fail to empathize with their customers. Most MLM marketers become so self-centered that all they think about are their selves and on how they can earn more money.

What happens next is that they push their products to their customers without taking time to analyze whether their customers really need the product or not.

The Solution

They should learn how to empathize with their customers. It would be better to put themselves in the shoes of their customers. In this way, they will realize that selling should not be made in such away that people are compelled to buy things that they do not need.

What every MLM marketer should do is to help other people's lives so that they will boost their income.

All of these things are boiled down to the fact that MLM is, indeed, a serious business. People should learn that the effort the results they will reap are proportionate to their efforts. Hence, they should work harder in order to succeed in MLM.

Friday, June 19, 2009

MLM Tricks That Work

Heber Warner

99% of Mlms Fail - You Could be One of the 2% That Succeed

STOP! Doing what does not work. Don't write that list of 100 friends and family, unless you want them to become your distant associates. STOP bugging every person that comes within 3 feet of you. This practice is out dated and will not work for any MLM. I have been involved in MLM's for quite some time, and I am willing to share what I have found out about them.

I am willing to share with you some of the MLM Tricks of the trade, but you have to be willing to discard all that you have been practicing and of course struggling with and start using MLM Tricks that work.

It is true that the 2% of successful MLM's, have been working on their business for around 3 years. Most MLM's report loss rates of exceeding 99%. And product usage drastically diminishing with new enrollees after only 6 months. It takes an average of 3 years to become successful in MLM. That is if you work your business on a daily basis, giving your blood, sweat, and tears to help others and make it happen.

When you hear the "3 months and I got rich" from those on stage, those people pulled their down line off an MLM that they had previously been in. ( working for about 3 years up to that point)

When MLM was started in the early 1950s it really was a great idea. Well, because everyone knew everyone in the neighborhood. When there was a barbecue, everyone from two blocks around came. There was plenty of friends to help grow your business. Everyone helping everyone.

Did you know that the average network marketer must have a 3,053 person down line to have a substantial income to even quite their day job. (Do you have 3053 friends.)

Since the first MLM came out the entire world has changed, With walllmarrts every 10 - 20 miles apart in major cities.

There is still 2% of us that make money in MLM's. (a lot of money) MLM is big business.

Did you know, there are over 53.2 million people in the USA that are in some sort of MLM. That means there is a great possibility that you, or someone you know, knows an individual, that is a part of that 2%, that are using the right MLM Tricks to be making money in MLM.

There is over 4600 MLM's in the USA alone. ( including: travel, health and wellness, Telecom, insurance, internet security, ect.)

I have learned some MLM tricks that work and have applied them to my business. I only want the truth out there, and I want you to know that what your up line is telling you has not worked for 100% of all MLM's so why will it work for you. It Isn’t Your Fault…Failure Is Learned, Just Like Success And You Can Make Money With Any MLM, If you have the right MLM Tricks to take you to the top.

If you know all the MLM Tricks you will not spend 3 years growing your MLM. And then you will be able to quite your day job. If I can teach you how to put at least 19 people a week in your business. Think about it ,if I gave you all the MLM Tricks, and you put 19 people in your MLM every week for the next month that would be no less than 26 people in your down line in 31 days. If you then, in turn taught each person in your down line the same MLM Tricks, and they did the same thing how long would it take to get the 3,053 people in your down line. Much less than the average 3 years!

Now you should know why I am in 3 MLM's, and making more than I ever dreamed of. Knowledge and Skill is the key.

The first MLM Tricks you must know to ever succeed is: NEVER lead with the opportunity, always lead with the product, or you will have people dropping out as fast as you put them in. Don't make this fatal mistake. The biggest reason most MLM's fail is because the person/s who sold you into the business, really was not concerned with your success No matter what they tell you, they were only concerned with the sale of the opportunity. They all pitch the business, but your compensation comes from consumption. You care the most about your success. I am not saying that they meant to harm you, but they were not, by any stretch, prepared to help you. Even worse, instead of having the right stuff to show you how to start making money, they try to get you all hyped up with these NEW state of the art, "selling tools". Stuff like; brochures, pre-done ads, cd's, dvd's, tapes and stuff that really doesn't work. If it did, most of you wouldn't be reading this right now.

All MLM Tricks are important, but one of the most important one's, is for you to learn to be the leader not the follower. Everyone wants to follow an expert. Stop counting on your "up line" to close the sale. You become the Leader. (know what your talking about.) Learn the proven MLM TRICKS that work for anyone that wants to make more money and improve their financial lifestyles.

Because I am so passionate about this stuff. And I only want your success. I have listed my website link below. Where you can decide for yourself if these MLM Tricks will work for you.

Hundreds of other very interested people have already checked out this information, and found it very valuable. Learn all the MLM Tricks to begin making more money in the next few months, than you would ever have by continuing to do what you already are. (listening to your up line) Using techniques that are out dated, no longer work, or not designed for your success but the success of the corporate office.

Thank you for taking the time to read this article, I hope you have found it valuable.( I couldn't fit everything in this one article.) If you Go ahead and click on the link below, you will find even more critical information on how you can grow your business.

Friday, June 12, 2009

MLM Ethics

Are MLM/Network Marketing Businesses A
Honest Way to Earn Income?

The MLM/Network Marketing Business

MLM (Multi-Level Marketing) is based on the concept of distributing the process of selling onto independent businesspersons. Honest MLMs give everyone (and anyone) the opportunity to start and grow their own business. Consider that the MLM concept can be applied to selling every good and/or service, and that every person is a potential future representative. One can say that everything has the potential to become a MLM opportunity.

Think about where you work. Isn't it true that the boss (or company) is raking in the big bucks out of the money YOU are making for the company? Maybe you aren’t in sales. You still contribute something of value to the company. If you didn’t, they wouldn’t pay you! Your paycheck is a reflection of that value. Whether you work in sales, for a nonprofit, or in the service industry, somebody somewhere is making money and you are contributing to that effort. If they weren’t making money, the company would collapse.

There are many good examples of traditional businesses that function very much like a MLM. Examples include the Insurance business, the Yellow pages guys, your local Auto Dealers, etc. Look at a sales force. The salesman makes a commission of 12%. That’s all he makes unless he makes his quota or sale goals and then he may get a bonus. The sales managers for these companies may have 10 salespeople to train, keep track of, and motivate. As reward for this extra work, he makes 3% of everything that each salesman makes plus commissions and bonuses for his own effort. He may make an additional bonus for all of his salesmen making their sale goals. And the owner of the company makes money on everyone!

Gee, that would mean Honest MLM is everywhere we just do not see it like a MLM company.

An Honest MLM versus a Pyramid Scheme?

Pyramid schemes are illegal scams involve a large number of people at the bottom of the pyramid, all of them paying money to a few people at the top. Each new participant pays for the chance to advance to the top and profit from cash paid by others who join down the line. You receive no products or services for your participation. Pyramids resemble a legal honest MLM in structure, but there is an important difference. Pyramid schemes seek to make money from you, while multi-level marketing seeks to make money with you by offering top quality products and/or services. Pyramid schemes are much like chain letters; they require mathematical gymnastics that cannot possibly work. Pyramids always collapse in the end, and only a very few (usually the con artists themselves) make any money on them at all.

Many people associate the MLM technique with pyramidal schemes. An MLM does not work this way. You must do work to earn money—it is as simple as that. The main objective of an MLM is to enlarge the area of distribution for different goods by involving as many people as possible, either as customers or as possible representatives. Each company representative earns their money through honest work. They may receive commissions for selling and may also receive a bonus for offering the business opportunity to others.

Anyone who works a conventional job is in a pyramid scheme. Every company, army, and government in the world is built on the pyramid concept. However, with multilevel marketing, you aren't held back by the people above you like you are in a conventional job.

With an MLM, you can build your business as large and as profitable as you want and you do not need to be at the top. In fact, with many MLMs, you can surpass the earnings of the person that introduced you to the business.

How Can You Tell if an MLM is a Good and Honest Company?

MLM opportunities are all around us, but only a few of them are turned into profitable businesses. Be sure to make the most out of every honest MLM opportunity.

The Direct Selling Education Foundation suggests that, before you sign up with a company, you ask yourself these three questions:

1) How much am I required to pay to become a distributor? An honest MLM company will generally charge a small start- up fee. Pyramid schemes make most of their money from signing up new distributors, so their start-up charges are often very high. These start-up fees may be called many things and you may be told they are required or are recommended purchases for training, computer services and product inventory.

2) Will the company buy back unsold inventory? Honest companies will usually buy back any products that you fail to sell. Bogus companies will stick you with the inventory.

3) Are the company's products sold to customers? Pyramid schemes gain nothing by actually selling a product and often don't sell anything at all. They focus only on gaining new investors. Be wary if you must start by buying a large amount of product. Also, take a good look at the product itself. Multi-level marketing depends on quality products that are well-priced; pyramid schemes do not.

As with any other investment, before you commit ask questions about the company, its leadership, its ethics and its earnings. Take your time and investigate any information you're given. Talk to other people who have joined and research the company. Don't act hastily!

Ethics of the MLM

Many people question the ethics of MLM. They claim that the people on the top get all the benefit from the people working below them, while the people below don't get much if anything at all. Nothing could be further from the truth! The main income for an honest MLM comes from selling goods or services. With an honest MLM, you can easily make more than the person that brought you into the company if you put the effort into it. He gets a little bit from your sales, but you get the lion's share. Work equals money!

An honest MLM also focuses both on sales and on recruiting people (increasing the distribution system) to earn you more money. When a MLM representative contacts a person, he views that person as a potential customer and as a potential future representative. A representative will give you the opportunity to purchase his merchandise (which you were going to buy anyway) and to become a representative yourself, giving you the chance to earn money, grow your own business, become part of the company and share in the profits!

The recruited person benefits since he is now part of the company and is also the owner of his own business. Some benefits of joining the honest MLM can include products at a reduced cost and the opportunity to build their own business by selling and recruiting themselves. However, recruiting alone is not enough. You must recruit, motivate, train and supply the persons you recruited to get your share of their sales profit.

I Don’t Know How to Sell or Recruit!

If you do not know how, don’t panic! There are many honest MLM guides online. All the tips, tricks and the knowledge you need to start and grow a MLM company are available. The good news is that a lot of these are free.

Expand your business over the Internet. It is easier and cheaper. People are much more comfortable buying things from perfect strangers over the Internet, rather than buying them from total stranger at their doorstep. Save time and avoid stress by doing all your managerial tasks from your computer. Recruiting can also be performed online. As can selling.

The Future of Multi-Level Marketing

The home-based business boom, also know as MLM or Network Marketing, isn’t really booming at all. Now it’s true that in the last decade the number of MLM companies popping up all over the United States have grown by over 500%. Yet, the number of distributors has only grown by 15%! So, yes there is a “MLM Boom”, but it’s the number of companies that have boomed, not the number of distributors.

What does that mean? It means that there are too many companies competing for the same distributor base, plain and simple. Ever seen a small town “boom” really quickly only to go “bust” in a few years? You know the type I’m talking about. You drive through the town and see closed businesses and shopping malls all through the town and you ask yourself “what happened here?” Now, I’m not saying that the MLM industry is ever going to “bust”.

Quite the contrary, the MLM industry will continue to grow with or without you—it’s that strong of a business model. But, it’s not 1977 anymore where Amway, Shaklee and Herbalife are not the only games in town. Instead, there are literally thousands of “good” MLM programs to choose from. To grow a profitable MLM company needs work and dedication, but once you have it rolling, you will enjoy the benefits. Grab a MLM opportunity and make your first step towards your honest MLM Empire.

The Legal Aspects of Honest MLM

The Inevitable Question
OK, you have either been recruited for a network marketing opportunity or you are the one doing the recruiting. Inevitably, this question will come up: Is this a pyramid scheme or a legitimate business opportunity?
This Tuna's for Selling
Although this is a complex legal area, a simple story draws a clear line in the sand. Party No. 1 sells Party No. 2 a case of cans of tuna fish for $10. Party No. 2 sells the same case to No. 3 for $20 and so on until No. 9 sells the case to No. 10 for $500. No. 10 opens the case and opens one of the cans, which turns out to be rancid. He goes back to No. 9 who refers him to No. 8 and so on until No. 10 goes to No. 1 to complain.
"I have major problem," he says.
"So, what's your problem?" says No. 1.
"Well," says No. 10, "the tuna is rancid, it's inedible."
"So, what's your problem," No. 1 says again
And there lies the difference. Distributors in a network marketing program that are merely buying product to buy into the deal as opposed to an intention of really making a market for it, are really working a pyramid scheme, not a legitimate direct selling business. Remember, when you offer this opportunity to your next-door neighbor or your best friend, it's your credibility that's going to be on the line for years to come.

What to Look for - A Checklist
So, what do you look for with respect to legitimacy vs. pyramid? Here's a good checklist to consider.
1. Product and Price
Does the company offer a high quality product for which there is a strong demand in the real world marketplace? Is the product fairly priced and priced competitively with similar products? Can the product be demonstrated, and does it stand out when you show it to friends? Is the product proprietary to the company, and available only through its distributors? (Have you ever noticed that you can't buy Avon products in stores or Shaklee vitamins at pharmacies?) Is it backed up with a customer satisfaction guarantee?
Is post-sales service or customer assistance available? Do the people who participate in the program buy the product enthusiastically based on its own merits, even if they don't participate in the compensation program?

2. Second, No Investment Requirement
Can you participate in the company's program without having to make any investment other than purchasing a sales kit or demonstration materials sold at company cost?

3. Third, Look at Purchase and Inventory Requirements
Can you become a distributor or sales representative without having to fulfill a minimum up-front purchase or inventory requirement? (When you are pitched to put thousands of dollars of inventory at the very beginning, run fast in the opposite direction.) Does the company's compensation plan discourage inventory loading? Garages and backrooms filled with product serve no useful purpose to anyone.

4. Fourth, Look at the Sales Commissions Sources
Are sales commissions paid only on actual products or services sold through distributors in the network to the end-user or ultimate consumer? (This means that products don't end up in basements and closets. They are used, because they have genuine value.) Does the compensation plan avoid paying commissions or bonuses for the mere act of sponsoring or recruiting? (If it pays headhunting fees, it is illegal.)

5. Fifth, Check the Buy-Back Policy
Will the company buy back inventory and sales kit materials from distributors who cancel their participation in the program, as long as these items are in resalable condition? (This policy is required in states that have adopted multilevel distribution statutes.)

6. Sixth and Very Important, Look for Retail Sales
Is there an emphasis on actual retail sales to end-consumers? Can the company demonstrate efforts to market products to the ultimate consumer? Do the company's distributors have ongoing retailing requirements to qualify for commissions? What is a "retail sale?" The industry and many MLM statutes include both sales to nonparticipants and purchases in reasonable amounts for personal use by distributors. Some regulatory groups, including the FTC, have historically rejected personal use as a legitimate retail sale. Stay tuned as this debate continues. The legislative trend is definitely supportive of the industry position.

7. Seventh, Expect an Active and not Passive Role for Distributors
Are distributors in the company required to actively participate in the development and management of their networks? (Many of the MLM statutes require that distributors perform bona fide, supervisory, distributing, selling, or soliciting functions in moving product to the ultimate consumer.)

8. Eighth, Watch Out for Earnings Misrepresentations
Do the company's literature and training materials scrupulously avoid claims of income potential that is promises of specific income levels other than demonstrations of verifiable income levels within its program? (The Federal Trade Commission, attorneys general, and postal inspectors all have their eyes on the matter of earnings representations. The acceptable approach emerging is that there should be no earnings representations unless they are based on a verifiable track record of the average earnings of distributors. For instance, a company should have statistics to show the percentage of active distributors and the average earnings of active distributors.)

9. Finally, Look for Good Training
Does the company offer its independent distributors solid training opportunities in sales and recruitment? Are different levels of training offered to match the increasing levels of experience and responsibilities of distributors?

Authored by Dr. Robin Rushlo
Copyrighted May 2006
Rights owned by Soaring Eagle Companies LLC
No Net Needed
May not be sold in any form or for any gain Of any kind

Friday, June 5, 2009

What is MLM?

By: Fernando Soave

Multilevel Marketing is one of the fastest growing yet most misunderstood methods of moving products in use today. It has been termed by many as the Wave-of-the Eighties.

But, it will go far beyond that. By the 90's more than 100 billion dollars woth of products and services has been moved through Multilevel Marketing companies. As we are in the 21st century watch out!

What is MLM? This question is quite frequently in response to a button we often wear or we have seen wearing by others.

Let's explain it.

  1. Marketing simply means moving a product or service from the manufacturer or provider to the consumer.
  2. Multilevel refers to the system of compensation provided to the persons who are causing the product to move or the service to be provided.
"Multi" means more than one. "Level" means generation.

There are really 5 basic methods of moving products:

  1. Retailing. ex. the drug store, the department store,.... You go into a store and buy something.
  2. Direct Sales. ex. Tupperware, Avon, .....
  3. Multi level Marketing. This should not be confused with retailing and Direct Sales which commonly is.
  4. Mail Order. This can be an MLM but mostly is included in the Direct Sales category.
  5. Pyramid Sales.This type of Sales is to often confused with MLM. The fact is, Pyramids are illegal. The main reasons they may be illegal is their failure to move a product or to provide a valid service. If a product doesn't move, how can you even call it "marketing", let alone "Multi level Marketing". Multi level it may be, but Marketing they are not!!!
Now, most objections that people have about getting into Multi level Marketing are due to not realizing the difference between MLM, Pyramid Sales and the Direct Sales methods of marketing.

This is understandable because most reputable MLM companies belong to the Direct Selling Association.

We have been conditioned to think of MLM as door to door direct sales programs because our first encounter with them was when a distributor knocked on our door to sell us something.

Anyway, there are some features that differentiate MLM from Retail and Direct Sales companies and on very significant difference is that in MLM you are in business for YOURSELF but not BY YOURSELF.

Being in business for yourself means you are buying the products WHOLESALE from the company you are representing. This means also that you can use these products for your own consumption at WHOLESALE PRICES.

Since we are buying products WHOLESALE we can, if we wish, sell these products at RETAIL and make a PROFIT.

The most common misunderstanding about MLM is the notion that you HAVE TO sell retail to be successful.

You may sell if you want to or have to due to your particular program procedure, but in regard to making the larger sums of income, the real success is in building the organization.

Let your sales come as the natural result of building the organization.

The word "selling" triggers negative thoughts in the minds of about 95 % of the people. In MLM you don't need to "sell" the products in the traditional sense of the word.


When you build an organization, you are actually building a network through which to channel your product's or services.

Retailing is the foundation of Network Marketing. Sales in MLM or Network Marketing come from distributors SHARING with their friends, neighbors and relatives. They never have to talk to strangers. Network Marketing or MLM is building an organization in which a lot of distributors all retail a little.

So, you see, its not going door to door every day calling on strangers. Another point that differentiates MLM from Direct Sales is the SPONSORING of other distributors. This is called RECRUITING.

When you SPONSOR someone, you are making a COMMITMENT to TEACH them how to do what you are doing, building a BUSINESS OF THEIR OWN. Sponsoring is what makes a Multi level Marketing business so different an makes it grow.

As your organization grows, you are building toward becoming an INDEPENDENT SUCCESSFUL BUSINESS PERSON. You are your OWN BOSS.

With Direct Selling companies you work for the company. If you decide to quit that company and move to another area, you end up having to start all over again.

In almost all of the MLM Programs you can move to another area of the country and sponsor people without losing the volume generated by the group you left behind.

In MLM Programs you can make a lot of money by building an organization as your primary function.

A Multi level Marketing Organization is not a pyramid scheme. The pyramid is built from the top down and only those in at the very beginning can ever be near the top. And the price of the products or services get every step higher and higher, leaving the people at the bottom broke.

In the MLM Marketing everybody starts at the bottom and has the opportunity to build a large organization, even larger than his sponsor's organization if he wants.

MLM Marketing is the solution to the distribution costs of the most companies because there will be no more channels between the producer and the consumer. And the most part of the benefit can be paid to the distributors.

Fernando Soave
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