What Everyone Needs to Know About MLM and Network Marketing

Network marketing (also called MLM) is a very powerful and profitable way to build a home based business. What is the best way to choose an opportunity and get started?

Here are a few of the popular questions that are asked about network marketing and MLM. These are some of the basics.

Question: Where do I begin when choosing a network marketing opportunity?

Answer: Your best bet is a company that has been around at least 2-3 years, preferably longer. Network marketing and MLM companies can open their doors and shut down unexpectedly, just like any other business. Companies with a record of long-term stability and good service are your best bet.

Question: I’ve heard that network marketing is a “pyramid scheme”. What is that all about?

Answer: “Pyramid” schemes offer fast money earned by selling the right to recruit others. They often have a product to help make them look legitimate, but it will have little real value. The real money is made by recruiting other people into the scheme, not through sale of the product. Many pyramid scams don’t even have a product – they just take your money and pay off people who entered the scheme previously. A true network marketing or MLM opportunity will offer real products, and place emphasis on sales to customers who are not involved in the business opportunity.

Question: What about “getting in on the ground floor” with a new company?

Answer: This is a big risk. If you go in knowing the odds and have money to put into it, it is possible that working with a startup business can be rewarding. Every solid and reputable network marketing company today was a startup at one time. Just be aware of the risk. Companies with an established track record provide a more solid opportunity to achieve long-term income and stability.

Question: How do I get paid in network marketing?

Answer: There are several types of network marketing and MLM compensation plans. A few of the more common compensation plans are known as “breakaway”, “matrix”, “unilevel”, and “binary”. There are others that are a blend or spinoff of these. You can build a solid business and make money with any of these plans. When considering an opportunity, look first at the stability and track record of the company. Next, consider the products – quality, value, and whether anyone would want to buy them.

Question: Will I need to buy an inventory of products?

Answer: Purchasing an inventory of products should not be a requirement to sign up. It should be an option. In some cases, having a product inventory makes sense. However, your retail customers should have the option to order the products directly from the company using your ID. Inventory is important if you are building a business around retailing products (direct sales). In network marketing and MLM, this is not usually something you need to do.

Question: I’ve found a good opportunity – what do I do now?

Answer: Consult your sponsor and upline leaders. They should help you develop a plan for starting your business successfully. The company, and the upline group you join, should have a system in place for training and helping you get off to a good start. Before signing up, it’s a good idea to take a look at the training and make sure you’re comfortable with it.

Question: Can I build a network marketing business online?

Answer: Many people have succeeded building a strong business online. You will need money for advertising. Keep in mind that online MLM is still a people business – you can’t hide behind a computer and be successful. You can reach many more prospects and grow your business faster, but you still need the personal contact.

Question: I’ve heard “MLM”, “multilevel marketing”, and “network marketing” all used to describe this type of business. Is there any difference in these?

Answer: All these terms mean basically the same thing. “Network marketing” is a more contemporary term for “MLM” and “multilevel marketing”.

A final thought…

There are a lot of people looking for a home business, and for ways to make money from home. You can make a lot of money in network marketing. For this reason, scammers all over the place are peddling deals that appear to be legitimate MLM and network marketing opportunities. Just be careful and do your homework before signing up with anyone.