Multi-Level Marketing: Scam or Legit

By | April 21, 2020

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There are various forms of home-based businesses, ranging from freelancing, e-commerce, affiliate marketing, multi-level marketing, and lots more. Multi-level marketing is a legitimate form of business where a company recruits self-employed marketers or we refer to them as representatives. These representatives are saddled with the responsibility of raising other representatives; they promote the company’s product and earn various forms of commission as a reward for their effort. Below we look at how to identify if Multilevel Marketing business is a scam or legit, we will see basic terminologies used in this form of marketing and how to engage it for profitability.

Basic Terminology In Multi-Level Marketing 

Sponsor: your sponsor is the marketer who recruited you directly. He is responsible for familiarizing you with the company, their products, and how to engage their various marketing styles and products.

The Plan refers to the program you are introduced to. The plan shows the company’s product, the intended market, and their compensation plan.

Down line: Every one recruited and brought in below you is referred to as your down line. This will include those you have recruited personally and those recruited by others under you.

Up line: refers to those above you, let me simply explain this. Rep “A”, introduced Rep “B”while rep “C” was introduced by rep “B”; now rep “C” introduced you. Your up lines are rep “A, B and C”, while rep “c” is your direct up line.

Multi Level Marketing - Compensation Plan

Compensation Plan:  this is a layout of how each representative earns cash. Compensation is usually based on both products sold and new members recruited. There are bonuses alongside, this is paid on sales made by you and other members of your team, usually, it is based on the productivity of the company within a specific period

How to Succeed in Multi-Level Marketing 

Getting it right from the beginning is important if you are looking for a make it rich quick scheme, you are in the wrong place. Network marketing or MLM is not a make rich quick scheme, rather a business you can dedicate your part-time or full-time effort to and scale up gradually.

Highlight for a Successful MLM Business

Below are six key points highlighted by Entrepreneur for a successful MLM business.

  1. Choose Wisely: picking an MLM company o joins is the same as selecting an investment opportunity, below are 6 elements you must watch out for.

a. Stability of the company: how long has this company being in business, and what is their history like

b. what is the company’s major line of products or services?

c. Compensation Plan: I have explained what a compensation plan is, remember you are here for business. How much is the company willing to give back to their representatives and how even is this distribution between old and newly recruited representatives?

d. Company’s integrity: what is the management of the company like, you can pick any of the top management staffs and check their history. Have they been involved in failed businesses? Do they have a record of being involved in a Ponzi scheme?

e. Company’s Momentum: Check the growth pattern of the company.

f. Support and training pattern: this is very important, this accounts for why many fail in multi-level marketing.

Let us learn from my mistake, the first company I joined (Forever Living Products) has good products they have wide coverage and they have been around for ages. I must comment on them, they are a good company with good products. But, I did not get any training, I had to travel for not less than six hours to meet my up-line, thus I failed.

Then, I left Forever living for Longrish; Longrish had it all, good product, good training, a good plan, and great compensation.

2. Practice What they Teach: even if you are a pro, the moment you are joining a network marketing scheme, you must listen and learn from your up line. Multi-level marketing is all about teamwork. Your success will determine your up lines success, by this structure, they are all way eager to help each other grow. But you have to be teachable and ready to implement what you are taught.

   3. Evaluate The Top-Flyers: How helpful are the top-flyers and your up liners? Are they ready to share ideas with you? How committed are they to your success? There must be a line where you have easy and free access to your up lines. This is another thing I enjoyed with Longrich, easy and free access to my up-lines’ up lines. I use to refer to them as great grand-mother.

    4. Lead your Down-line: we use to refer to people whose uplines were not responsible for their growth as “orphans”, their direct uplines were either too busy or not just their for one reason or the other. Do not raise “orphans”, train and support your down line. Network marketing is about building long time relationships long-term relationships, my upline in Forever living is still my friend, in fact, I now mentor him in affiliate marketing.

      5. Make good use of the Internet: the internet is a very good tool; it is very reliable for marketing and likewise research. Start developing skills with regards to website development, email automation, and so on. The internet is a good platform to reach more audience when compared to mouth-to-mouth marketing.

       6. Multi-Marketing is a serious Business: the mistake so many people make is not taking it to heart, they take it as a side hustle. This is a serious business, the same as running a grocery store or a franchise for a multinational company.

Team building is an important exercise for you to succeed; you must have people who think in the same direction around you. Bye that, you can always focus on the one thing required for your success.

How to determine if a Multi – Level Marketing is Scam or Legit

It is important we del with how to determine if a multi-level marketing company is scam or legeit. Let us see these points as outlined by thebalancemb

  1. No product: a company that offers no product or one that major on recruiting new members than sales of products and their benefits is most likely a pyramid scheme. End customer satisfaction is always the main goal of any good company, so companies concentrate much more on the sales of their product and not building a network of sales representatives.
  2. Outrageous Product Claims: don’t fall for unrealistic claims, this is majorly visible in the health and wellness sector. In a bid to sell products, the rep claims their drug will do perform a miracle. Genuine companies have a good product(s) line that is targeted at solving a specific problem(s), join companies with reputable products and brand. Remember you are building a business, don’t join a company that will drag your name to the mud. Associate with reputable companies, they will help you build good relationships. These relationships will be your platform for direct sales.
  3. High sales Target: one of those things I enjoyed with Longrich is that I had independence, you can grow on your own. No sales target for the month. On my own, I worked out a monthly target based on how much I intended to achieve.
  4. Month Purchase of stocks: some companies will place you on a minimum quantity of stocks you must buy within a specific period. Many times it is on monthly bases, this is another bad indicator. You must buy stock, I agree with you, but NOT COMPULSORY. Don’t round a rope around your neck, avoid filling your garage, car, and even your sitting room with the company’s product. It wearies the soul.
  5. Expensive Training: Most reputable companies have free training, in fact I know companies that make there training available for everybody. The top of it is that you don’t need any super training to do well. With little training, consistent and dedication you will succeed. I know so many reps want to sell their ideas, the package various forms of training for sale. Avoid wasting money buying training, reduce your running cost as much as possible. Haven saw the dos’ and don’t of Multi-level marketing, you should be able to identify if a multilevel marketing business is a scam or not. Also should be able to girdle yourself and venture into one if you decided to, although there is a better way to make money the most preferred form of business is affiliate marketing. You don’t need to worry about recruiting or making a specific level of sales. This is not to say that it is easier, but I have found it to be more sustainable

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