Multi-level marketing, also called pyramid selling, network marketing, and referral marketing, is a marketing strategy for the sale of products or services where the revenue of the MLM company is derived.
Network Marketing is a good career for a select few. It will be a waste for most others. As with any business, a successful multi-level marketing (MLM) venture will require a significant investment of time and effort. Done correctly, it’s a great way to build wealth. But there’s no room for people who think they can make a quick buck with it.
Network marketing is a referral-based sales business. A company will offer a product or a service and recruit others to sell it for them. Sales reps, who are independent contractors and not employees, are paid commissions for what they sell. If they recruit other reps, then they’ll also earn a portion of their sales, too.
The greatest advantage of multi-level marketing is that you can build a thriving business without having to develop a product or a brand. The company provides it for you; all you need to do is sell. A well-managed firm will have systems and marketing material available to bolster your chances of success.
It’s also scalable. You can develop your business into a vast enterprise with numerous layers of recruits. If you’re willing to invest the time, eventually you can have enough sales reps on your team to walk away from it altogether. A network marketing venture can thus be an effective income producing asset. There are plenty of MLM entrepreneurs who earn six and seven-figure incomes passively.
Further, MLM is a great way to develop sales, public speaking, leadership and management skills. I often suggest it to aspiring entrepreneurs who haven’t yet decided what they want to pursue. Network marketing may not make you rich overnight, but it can teach much of what you need to know to have a successful business. You can use it as a training ground.
Lastly, a lot of people find value from the mentorship and personal develop components involved in network marketing. If you participate in MLM, you’ll join a community of like-minded others. Your peers will want to reach financial freedom, they’ll stand by their product, they’ll believe in their mission and they want to expand their skillset. That’s valuable in and of itself.
Yes – and they are plentiful. You should be aware of them before proceeding.
Scams - The MLM world is a hotbed for scams and shady characters. Companies like Business in Motion were found to be Ponzi schemes. Karatbars international, OneCoin, MMM and several others have all had run-ins with the authorities. In December 2016, Vemma paid a $238 million settlement to the US Federal Trade Commission (FTC) for non-compliance issues. I’d suggest reading sites like BehindMLM.com and ThompsonBurton.com to keep abreast of current events.
Changing regulatory framework - Trade and securities regulators have pushed network marketing companies to base their compensation models on sales commissions, rather than on recruitment. They take issue with firms who pay people to simply find others to join instead of actually selling the product (Vemma, for instance). It’s likely that regulators will continue to scrutinize the MLM industry.
Your asset can disappear - If the company folds or terminates its relationship with you, that will destroy the asset you spent years building. MLM participants are reliant on the good standing of the company. One way to hedge against that risk to is to maintain close relationships with those in your downline. They would then be more likely to come with you if you choose to switch businesses.
Network marketing can be a great career, contingent on a few factors. They include:
The effort you make - Most people become disillusioned with network marketing because they expect to make money quickly. After a few months of dismal results, they either quit or become inactive. Even worse, they often write off the experience as a scam. To be clear: MLM is a small business. Just like any other entrepreneur, you’ve got to work hard for years before you’ll see results. If that’s not an option, then network marketing (and business in general) is not right for you.
Finding the right company - There are a lot of MLM junkies; people who hop from one network marketing firm to the next. They abandon the former each time a shiny new business opportunity arises. Frequently jumping ship will preclude you from spending enough time on your venture. You’ve got to find the right firm and stick with it. As part of your due diligence, you should consider:
Legal or compliance issues - While researching prospective companies, you’ll probably find websites that call them scams. I’ve never seen an MLM business without bad press online. There will always be someone who says they were ripped off. In my opinion, you should base your conclusions on evidence. Sometimes, where there’s smoke there’s fire. Other times, however, people are either disgruntled or they’re trying to drive traffic to their own network marketing venture. Don’t ignore what you read online, but strive to understand the context in which it was written.
Your tolerance for volatility - Income in any business is never stable, nor is it guaranteed. As an early MLM entrepreneur, you may experience months of decent earnings followed by droughts. The business won’t produce reliable passive income for at least a few years. Such volatility can be stressful and emotionally draining, especially for those with high expenses. You should be prepared for earnings swings and manage the money you do make carefully.
How you spend your earnings - It’s common to spend your network marketing earnings on upgrades and training packages. The company will often encourage you to do so, justifying it as an “investment in yourself.” While there’s truth to that, people often go overboard. They’ll dump most of what they make right back into the firm, leaving little for themselves. Doing that too often can dry you out.
As a rule of thumb, you should try to invest in activities that will directly produce revenue. For example, if you spend $200 at a hotel to host a recruitment seminar, you might make $1,000 from it. That’s opposed to spending $200 on sales training and justifying it by saying, “Well, the skills I develop will be worth it.” Continually purchasing programs and activities that have indirect potential can be a dangerous trap.
Conclusion - Network marketing can be a good career to pursue. You can do quite well if you build a team of hard-working individuals. The passive income that can be produced is vast. It is certainly a vehicle to reach financial independence.
Begin by understanding that network marketing is a business. As with every business, it takes time to build from zero to profit. The most likely scenario is that it will take you time to become profitable. Don't believe anyone telling you that it is a shortcut to riches; it isn't.
Network marketing is promoted as requiring low capital to get started. Don't get in blindly assuming that you don't need money. There are running costs: travelling, communication (telephone & Internet connectivity expenses), hiring venues for presentations, purchasing product samples if you are building in a product based company and much more. Many people fail in network marketing because of the illusion that they will be building a business without spending.
It usually takes on average from 1 year to 3 years to go full time. That is the period it takes to earn a sustainable, full time income. It could take longer. You can shorten the curve by putting in extra work in the initial stages. If you work 16, 18 hours on most days, you can get there probably in 3, 6 months.
Compounding refers to the reinvestment of earnings at the same rate of return to constantly grow the principal amount, year after year. It is a technique of making your money work harder for you and is perhaps the most powerful tool that an average investor can use to plan for many of life’s financial goals, including retirement.
Power of Compounding Example by Chess Story
There was once a poet who fell upon such hard times that he was no longer able to feed his family.
Hearing that the king greatly encouraged talent & was famed for his generosity, the poet set off for the Royal Palace. When brought before the king, he bowed low & asked that he may recite a poem. On hearing his recitation, the king, well pleased, asked him to name his reward.
The poet, pointing to a finely wrought chessboard before the king said “Your highness, if you place just one grain of rice on the first square of this chess board, & double it for every square, I will consider myself well rewarded.” “Are you sure?” asked the king, greatly surprised. “Just grains of rice, not gold?” “Yes your highness” affirmed the humble poet.
“So it shall be” ordered the king and his courtiers started placing the grain on the chess board. One grain on the first square, 2 on the second, 4 on the third, 8 on the fourth and so on. By the time they came to the 10th square they had 512 grains of rice. The number swelled to 5,24,288 grains on the 20th square. When they came to the half way mark, the 32nd square, the grain count was 214,74,83,648 – that is over 214Cr Soon the count increased to lakhs of Crores and eventually the hapless king had to hand over his entire kingdom to the clever poet. And it all began with just one grain of rice.
Moral of the story: Never underestimate the power of compounding. If you stay invested long enough, it’ll
work for you. A small sum invested every month from the beginning of your work-life can lead to a very
impressive amount at the time of your retirement
If You Still Don't Believe In
The Power Of Compound
Interest, You Have To See This
Invest young and the power of compound interest will make you rich. Really? Yes, really. Here's a super-simple example that will knock your socks off.
I still remember that mathematics class when I was in 8th standard… our teacher introduced a new subject- Compound Interest.
OUR TEACHER STARTED WITH A STORY TO MAKE US UNDERSTAND THE POWER OF COMPOUNDING.
Teacher: “Let’s make a deal. I will pay each one of you Rs 1 Crore upfront and in return, you will pay me 1 paisa per day which will get double next day until 31 days (one month)”
Teacher: “How many of you will make this deal?”
I remember, we had a strength of 60 students and we all 60 students raised our hand thinking foolish of our math teacher.
…..until he made us realize that 1 paisa per day and double each day till 31 days will be equal to Rs 2,14,74,836.47. This is 2.14 crore!!
|Day||Amount (₹)||Total Amount (₹)|
|1||₹ 0.01||₹ 0.01|
|2||₹ 0.02||₹ 0.03|
|3||₹ 0.04||₹ 0.07|
|4||₹ 0.08||₹ 0.15|
|5||₹ 0.16||₹ 0.31|
|6||₹ 0.32||₹ 0.63|
|7||₹ 0.64||₹ 1.27|
|8||₹ 1.28||₹ 2.55|
|9||₹ 2.56||₹ 5.11|
|10||₹ 5.12||₹ 10.23|
|11||₹ 10.24||₹ 20.47|
|12||₹ 20.48||₹ 40.95|
|13||₹ 40.96||₹ 81.91|
|14||₹ 81.92||₹ 163.83|
|15||₹ 163.84||₹ 327.67|
|16||₹ 327.68||₹ 655.35|
|17||₹ 655.36||₹ 1310.71|
|18||₹ 1310.72||₹ 2621.43|
|19||₹ 2621.44||₹ 5242.87|
|20||₹ 5242.88||₹ 10,475.75|
|21||₹ 10,485.76||₹ 20,971.51|
|22||₹ 20,971.52||₹ 41,943.03|
|23||₹ 41,943.04||₹ 83,886.07|
|24||₹ 83,886.08||₹ 1,67,772.15|
|25||₹ 1,67,772.16||₹ 3,35,544.31|
|26||₹ 3,35,544.32||₹ 6,71,088.63|
|27||₹ 6,71,088.64||₹ 13,42,177.27|
|28||₹ 13,42,177.28||₹ 26,84,354.55|
|29||₹ 26,84,354.56||₹ 53,68,709.11|
|30||₹ 53,68,709.12||₹ 1,07,37,418.23|
|31||₹ 1,07,37,418.24||₹ 2,14,74,836.47|
How can we make use of this powerful concept and make a fortune? Now we understand that compound interest is really powerful but do we make its use in our financial investment? This is where the real value lies.
The ultimate advice is to start investing “NOW” and have “PATIENCE”.
Best way of Power of Compounding in Network Marketing for join us