As a former sales professional, even the term multi-level marketing annoys me. Here’s why. Sales is a great profession. Most of us go into sales as an honest route to make money. We don’t go in to deceive our customers, and though we all know about sales techniques, we approach the sale with a level of ethics.
MLM is basically a sales technique, so please call it that. There’s nothing wrong with being a salesperson. Marketers do a different job, their role in the world is about product, price, position and promotion.
You already know MLMs
You might be new to the name but you already intuitively know about MLMs. You’ve probably heard of Avon and Mary Kay. You might have come across Herbalife or Amway. There are hundreds out there.
How does an MLM work?
There are usually two ways in which an MLM works. Firstly, you get a commission from your sales. Next you recruit people who also sell and you get a commission on the sales they make.
Read the next sentence carefully. Even better, you might earn a commission on the sales by people selling on behalf of the people selling for you. You see that there are three levels of people selling here? Yes, it’s convoluted. It is meant to be. It’s the mark of these sales techniques, and it is why they are sometimes called pyramid schemes.
Are they inherently bad?
Not necessarily, but they can have certain practices which are dubious. Imagine for a moment, you were about to take a sales job for a car company. Would you think it reasonable for the company to ask you to buy a new car as your starter kit? That would be crazy, right?
MLM’s may often ask you to ‘make an investment’ to get started. Asking you to buy a starter kit for $50 is the same principle as asking you to buy a new car. The only difference is the price.
You and someone close to you are selling the same thing
In corporate sales, people are given a territory. In an MLM you’re likely to recruit people who are close by, who recruit close by too. There comes a point where all of you are trying to sell in the same area and none of you is making any headway.
Does anyone make any money?
Absolutely. There are people who are trotted out at every sales conference as the high flyers. These people have found a way to work the system and they are making the big bucks.
But these people are the ones who would be likely to succeed anyway. These are the ones who could be running their own business and have the networking and closing skills.
There is a lot of research on MLMs on the internet, and if you’re thinking about joining one at least do yourself a favor and read it. Then you can go in with your eyes open.