Multi Level Marketing Companies

If you look on the internet, there is a lot of confusion about multi level marketing companies. Some people don't understand what they are. Some people don't understand whether they are a scam or not. Many people don't understand how they work. Also many people don't understand what it takes to build one successfully.

There are many different marketing strategies that a business can use to grow its revenue base. This business model consists of the company recruiting a team of independent sales distributors. The distributors either earn a commission for the sale of the product or they earn retail profits when they purchase the products wholesale and sell them retail.

What makes this business model different from other sales commission structures is that the independent sales distributors can also recruit distributors as a part of their organization. Whenever those distributors buy products wholesale or earn a commission for the sale of the product, the distributor that recruited them has the opportunity to earn an override commission.

Depending on the structure of the compensation plan, distributors that are a part of Multi Level Marketing companies can earn on multiple levels of sales.

As for the legality of these companies, in the United States that are completely legal. In fact, there was a court case that settled this issue by the Federal Trade Commission back in the late 70s. After several years it was ruled that multi level marketing is a legitimate business opportunity.

Known as The Amway Safeguard Rules because Amway was the company that was challenged, these rules define the difference between legitimate multi level marketing companies and illegal pyramid schemes. You can learn more about this by reading about The Landmark Amway Case as well as reading the Amway vs FTC decision.

Some people use the pyramid structure of these companies to argue that it is not a legitimate business opportunity. They argue that if you get 3 who get 3 and so on, eventually you are going to run out of people to recruit into the opportunity and saturate the market. This is simplistic thinking at best.

Do you have a refrigerator in your house? You probably do. Does everybody you know have a refrigerator in their house? They probably do as well. So why is it that stores still sell refrigerators if you have one and practically everyone you know has one? Shouldn't refrigerators be saturated by now?

What these saturation theory's fail to factor in is several elements.

1. I might move to a new house that doesn't have a refrigerator. Now I need to buy one.
2. My refrigerator may break. That means I now need to buy another one.
3. I may not see the value of a refrigerator at first. However, in the future I change my mind and see the value in it and now I buy one.
4. When I have kids and they move out and live on their own, they may also face scenario 1 and/or 2 and buy another refrigerator.

This is true for cable television, cellular phones and multi level marketing companies and the business opportunities that they offer.

Finally, what does it take to be successful in building a distributorship with multi level marketing companies? Many people point to things such as the "average distributor check" which is usually a low number to justify why the business model is not legit.

According to a survey done by the Direct Sales Association 66% of distributors work less than 9 hours a week. 43% work less than 5 hours a week. So of course the average is going to be low. Instead of worrying about what the average people are doing, you should want to know what the top people are doing. If you do what the top people are doing, you can have what the top people are experiencing.

In studying some of the top distributors, I have found that although many of them have different systems in place, they all have several things in common...

1. They consistently expose new people to their products, services and opportunity and help their team of distributors do the same.

2. They have a system in place that allows their team to get trained on how to do the business.

3. They commit to a process of personal development by reading self development books, listening to/watching self development audios & videos and attending live self development events.

I have analyzed hundreds of multi level marketing companies and if you are interested you can learn more about the company that I have decided is the best business opportunity for me. If you are currently involved in a company, feel free to download my free report, which reveals the 7 strategies that I use to find prospects to talk to about my business.