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	Multi Level Marketing - Pros and Cons

	Multi Level Marketing - Pros and Cons by Chris Casarez http://www.bizmedia.net Varying opinions on both the ethics and effectiveness of Multi-Level Marketing sometimes cause personal rifts between people that rival differences in religion and politics. Indeed, some of the more extreme MLM distributors treat their "opportunity" like a religion. Perhaps you've had a friend, relative or neighbor call you to tell you about this great opportunity or product which they really couldn't explain unless either they see you in person or you attend a special meeting with them. You may have had the pleasure of watching a video or listening to a speech about the benefits of a specific product that could change your life. More significantly here, is that it may have been accompanied by an attempt to convince you to join the opportunity to sell the product, which would buy you a shot at the pie-in-the-sky income they tell you about. All you have to do is pay a fee which can range anywhere from less than $100, to thousands of dollars. Typically this is how MLM recruiting works. A few of the more well-known MLMs today are Primerica, Pre- Paid Legal, Quixtar (Amway), Herbalife, and ACN. These companies sell everything from life insurance to vitamins. Though perfectly legal, MLM has earned a bad name both through the questionable methods many of them use, and a number of MLMs that have been closed down by regulators after being declared a Pyramid Scheme (which is illegal and has a more specific definition than most people seem to realize). Equinox for example, distributed a real product (NSA water filters) but in practice was really profiting off of the fees distributors paid to join and attend training seminars. The real money was coming from recruiting and exploitation. To its biggest proponents, MLM is the beacon of hope for the little man; the pure and innocent alternative to the tainted and indifferent corporate world which cares nothing for its constantly exploited employees. To its biggest detractors however, MLM is the epitome of a cult that preys on people's trust; a system based on deceitful propaganda designed to keep people spellbound and tied to a system that benefits from their well-meaning but naive efforts. The MLM concept is rather simple. Instead of marketing a product through conventional means (such wholesale/retail outlets and using conventional advertising), independent contractors are recruited to market a product on their own time. These distributors are then typically free to recruit other distributors (as mentioned earlier, they typically pay to become a distributor) beneath them, and make overrides on their sales. The recruited distributor becomes the "down line," of the distributor making overrides (up line) from his/her sales. These levels typically unendingly continue and overrides can run several levels deep. Sometimes there is a limit on how many distributors can be recruited directly underneath. In this manner, the company typically cuts overhead by not having to purchase/build stores or pay a lease. Instead, the money is distributed between the company itself, the seller, his/her up line, the seller's up line's up line, etc. While these contractors typically make money solely through commission, sometimes these commission-rates are very attractive, and often increase as this independent contractor moves up. Moving up generally consists of making a set number of sales, recruiting a number of distributors underneath you, or a combination of both. Often time there is incentive to do this within a given time period. The Advocate's point of View To the true believer, MLM is the American dream in its purest form. With a small start-up fee, any person can join and make it on their own merits. There is no need to know the right people or cut throat the person next to you to move up. Here, you are being paid what you are worth, and you grow by helping those underneath you grow. Just follow the system; be a team player, stay positive, and you will get what you put into it. The people above you only make money off of you when you yourself make money; in contrast to the corporate slaves who are "underpaid" a flat rate by a company that monetarily benefits from their actions. The more effective distributors often believe highly in the product they market. Calling their list of warm leads (people they already know) isn't a problem, as they truly believe they are doing their friends and family a favor. The idea that you can help those you care about and make money in the process provides sincere motivation and is probably the most attractive aspect of MLM. Rather than pouring their efforts into filling up the pockets of a company that cares little if anything for them, the distributor can now focus on making a direct income while helping those he/she cares about and make new friends along the way. The advocate also sees MLM as a relationship building business. As distributors help their clients by introducing them to products they deem worthy, they build relationships through their presentations and constant follow-ups. MLM also provides the distributor the ability to recruit the down lines of their choice (assuming they can convince them to join of course). Who wouldn't prefer to work and grow with their best friends or family over taking orders from a hounding boss? Positive thinking is always important, and the entire MLM mindset can seemingly be summed up as "where there's a will, there's a way." In fact, MLM motivational meetings and literature are often full of such clich~s. Negative influences are to be avoided as they only hamper progress. Sometimes this causes problems as these negative outlets may include close friends and family. In fact, detractors are often seen as dream stealers, pessimists, losers, etc. Often it is assumed that there is an ulterior motive to such negative viewpoints. The detractor's point of view To the detractor, MLM is the system by where a company exploits personal relationships and human naivet~ to cut inventory and advertising costs and pocket the extra dollar. From sign-up fees to the purchasing of training tools and sales leads, a detractor sees MLM as a modern day equivalent of the gold rush - where the real money was made not by finding gold, but by selling shovels and other equipment to those searching for gold. Some even equate all MLMs with pyramid schemes. >From this point of view, an MLM sales force consists of well-meaning people who are misled into paying to join the distributorship, and foolishly market the product on their own budget. The detractor sees this as the company's way of pocketing the money that the company would have paid to advertise and distribute with conventional means. They also see this is an indicator that this product or service is not strong enough to sell to a cold market, and must therefore rely on distributors who are brainwashed into truly believing in the product and opportunity. These well-meaning people then turn around and market the product to their friends and family, who are more likely to buy from a friendly face than they would from seeing it an advertisement or having it presented by a complete stranger. The detractor sees the MLM distributor as a victim and the constant emphasis on positivism as a way to rule out realistic thinking, and keep the victim brainwashed. The constant influx of spin coming from motivational tapes, seminars, and/or literature provide a steady stream of hype to keep the victim's euphoric belief in the system at its strongest. The discouragement of negative influences is seen as the rejection of reality (which would cause the distributor to question the ethics and effectiveness of his/her efforts), which is only conveniently labeled as negative by MLM advocates. Detractors see MLM distributors not as entrepreneurs, but followers of stringent guidelines. Furthermore, the idea that a person's worth is defined by their sales ability is looked down upon. A great engineer may make a horrible sales person, and a great sales person may make a horrible engineer. But by this logic, the great salesperson is "worth" more than the great engineer. And while there are many employees who are underpaid, the conventional company usually covers the overhead costs of keeping them employed (desk, computer, office, etc.) and generally doesn't require an employee to pay to work for them. In practice~ The sad fact of the matter is that only a very small percentage of those who become MLM distributors make their money back, let alone make anything near the income of the poster-sales person they were probably told about. Most successful MLMers will probably agree that it's a tough business that requires constant attention. Unfortunately, the cleverly written recruitment spiel MLMs all-too-often use, lead recruits to think otherwise. Herein lies the source of the blood-trail that has given MLM a bad name. Distributors (keep in mind, that this sometimes consists of high school or college students) often step into the field and find out how much more time and effort is involved than what they were led to believe. Also, if the distributor doesn't believe wholeheartedly in the product, there is sometimes a question of ethics (treating your friends and family like dollar signs). This is usually the threshold between advocates and detractors. Advocates will say "there's nothing wrong with presenting the opportunity in a positive light if the opportunity exists" whereas detractors will say "this is people's lives that are being toyed with." In conclusion Ideologically Multi Level Marketing is the perfect version of Capitalism. Who wouldn't like the opportunity to make money doing something helpful for those they care about? In practice however, these ideals often make way to greed and ambition. Some recruiters are less honest than others. Some MLMs are willing to share more objective information about themselves, while others tend to rely on hype. High expectations sometimes lead to heavy exploitation. The best part about MLM companies is that they tend to allow virtually anyone a shot at the gold. The worst part about MLM companies is that they tend to allow virtually anyone a shot at the gold. If you are being recruited by someone in MLM, it's always a great idea to do your homework on that company and ask as many questions as possible. See how much you can get in writing. If the recruiter claims to have made a certain amount and has been in the program for awhile, ask for a 1099 (the tax form independent contractors use). How much does the average distributor make? How many distributors are in the program versus customers? If the recruiter makes a claim that isn't backed up by corporate literature, ask why. But remember, an unethical recruiter or up line does not necessarily make it an unethical company. This article courtesy of http://www.dbusinessopportunity.com. You may freely reprint this article on your website or in your newsletter provided this courtesy notice and the author name and URL remain intact.