Multi level marketing or direct marketing is a type of marketing methodology in which, a product market does not have any hierarchy of distributors, wholesalers or retailers. The company sends the products directly to the independent distributors who sell the products to the end users. These independent distributors then get rewarded for the amount of products they have distributed and for the sales targets achieved.
Multi level marketing is becoming one of the best techniques to sell products due to the rise of online marketing and sales. You might have seen a lot of your friends selling products online with minimal budget and considerable profits. However, there are some myths about MLM companies you must not believe. Some people believe that it is the best way to get rich while some say MLM companies are scam. So what’s the truth?
We have come up with the 10 lies you need to stop listening right now about the MLM companies:
Table of Contents
- #1 You might become extremely rich while working with an MLM company
- #2 All the independent distributors are business owners
- #3 The independent distributors get rewards quite impressive while working in MLM
- #4 Multilevel marketing is completely legal
- #5 The products sold through multilevel marketing are rare and atypical
- #6 Network based marketing is the best way to pitch customers
- #7 It is easy to find customers and sell products quickly
- #8 Anyone can succeed in MLM business
- #9 It just requires one time investment and then you gain high revenues
- #10 All MLM companies are malicious
#1 You might become extremely rich while working with an MLM company
A lot of people have this misconception that working with an MLM company welcomes instant fortune. However, the truth is that around 90% people working with MLM companies earn few hundred dollars annually. The real life scenario of MLM company distributors is not as lucrative as it seems. The conventional companies and businesses put a lot more hard work in bringing in money compared to MLM companies and thus, if you think that you can become a fortune maker while working with an MLM company, think twice.
#2 All the independent distributors are business owners
A lot of distributors think of themselves as business owners while the truth is that they work for an MLM company that provides products/services to them and they get the money based on the sales they bring for the company. it is partially true as they won’t have to be answerable to any managers but it is a distributorship profile and not an entrepreneurship program. There is a marketing arrangement under which products or services can’t be sold in shops.
#3 The independent distributors get rewards quite impressive while working in MLM
There are multiple new distributors that quit the job because MLM companies often present a hypothetical image of the flow of revenue in the company which is difficult for some distributors to understand. The industry is aware about people who have succeeded but the major ratio of the people who failed is kept hidden.
#4 Multilevel marketing is completely legal
In a lot of countries, MLM companies are not permitted to launch their businesses. no doubt that it is legal in some countries but it is important for distributors to check whether the business is registered and acts as per the rules. Many countries ban such companies as they have to deal with taxes, registration and such complications.
#5 The products sold through multilevel marketing are rare and atypical
The MLM companies deal with multiple product categories like apparel, health supplements, cosmetics etc which are also available online. This means, you can purchase the same products at quite affordable rates and better quality online. Thus, the products are not rare and can be purchased from other sources too.
#6 Network based marketing is the best way to pitch customers
A lot of statistics prove that network based marketing is not the most advantageous marketing methodology for making any business successful. Network based marketing makes people feel pressurised to pay more than the original the MLM price of the products and also the product choice is limited. The MLM companies make distributors pitch their social groups, friends and relatives which is not suitable for everyone.
#7 It is easy to find customers and sell products quickly
A lot of people may feel that pitching the customers while offering lucrative prices is quite easy and it can also bring better sales while the real time scenario is completely different. The fact is that only 1% retail sales are achieved through MLM.
#8 Anyone can succeed in MLM business
A lot of people believe that attending training sessions for few days can help them become a successful sales person but the truth is that a marketing specialist having best leadership skills, networking skills, presentation skills, motivational skills etc can become successful as an individual distributor.
#9 It just requires one time investment and then you gain high revenues
The direct sales companies are bound to purchase minimum amount of products on monthly basis to remain active in the business. A lot of distributors are not able to sell the products and have to return which causes personal loss to the distributors. You are able to make profit only if you sell the products.
#10 All MLM companies are malicious
There are a lot of skills required to become a successful business owner in MLM business. Not all the companies are scams and not all the distributors fail.
If a person is determined to become a successful business owner, working with dedication and commitment can help. People can even make it a full time career and earn a handsome amount.