The Basics of Multi-level Marketing

Posted by Fitz Villafuerte under Business, Income Opps, Investing on December 16, 2007

Multi-level marketing or simply MLM is one of the most popular ways to generate passive income.

It’s unfortunate to see that a lot of those who go into it fail to profit from their investment simply because they were merely disillusioned by the prospect of earning lots of money. At worst, they got scammed into a pyramid scheme, resulting to loss of their hard-earned income.

There are however, people who have successfully made money and enjoyed the benefits of network marketing. With time and dedication, they were able to get back their investments and earn several folds more.

If you’re planning to enter a multi-level marketing company, I suggest that you take into consideration these basic facts. These are some of the things I’ve learned personally during the time when I was still active in MLM.

Due diligence is required.
Learn everything about the company. Make sure that they have all the legal documents to show that they are recognized as a legitimate business.

I do not advise joining start-up companies, I firmly suggest that you join only those who have a good track record and has been visible in the industry for at least five years. Believe in the principle of abundance and you will see that your market is rarely saturated.

Lastly, before signing in, make sure that you understand the policies of the company specially their regulations on how you will earn. Look for those who have been members for quite some time and see if the company has been paying them regularly and on time and ask if it’s easy to get your earnings.

This will take up most, if not all of your free time.
Don’t join a multi-level marketing company if you’re not willing to give it time.

There will be regular meetings and marketing schedules to attend to. You will be spending a lot of time following up on prospects and attending seminars.

Don’t believe them when they say that this is something you can just do on your spare time, reality is, this will probably be the only thing which you’ll be able to do on your spare time.

mlm The Basics of Multi level Marketing

Rejection will be your best friend.
When you join a multi-level marketing company, your family and friends immediately become your initial prospects. But you have to accept the fact that not everyone is interested in making money through MLM, so be prepared to be rejected.

When you’re best friend refuses to join in, don’t take it personally, be a good sport and accept his or her decision then continue down your list of potential clients.

No matter what they say, MLM really involves selling.
All legitimate multi-level marketing companies sell a tangible product or service. When you sign in to join the company, you instantly become its endorser.

So make sure that you believe in the product or service that they are selling and would actually use it yourself. This is important because again, no matter how many times you hear that this will not involve selling, the fact is, at the very least, you will be selling the idea of MLM profit to others.

If you feel that you are not a good salesman or you don’t feel comfortable talking to people you don’t know, then better stay away from multi-level marketing.

Have an exit strategy.
I personally believe that you should consider multi-level marketing as a short-term investment with medium risk and high yields. Although some people have been able to sustain their income for several years, most could only do this for a few months to a little over a year.

Reasons vary from waning interest in the recruitment and selling process to physical and emotional burnout. It is important to know beforehand the conditions when you will have to leave the company.

Is it when you’ve earned this much already or is it after a specific period of time? It’s really up to you when and for what particular reason. Just be sure to save your income and have good investment plans for your earnings.

Good luck!

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Image courtesy of Caroline Middlebrook

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6 Responses to “The Basics of Multi-level Marketing”


  1. Zernanv says:

    Kudos to you. You’re site is a throve of informative treasures.

    ZernanV

  2. Lett says:

    Wow, thank you for sharing your thoughts! I am about to go into an MLM business and this definitely cleared a lot of the questions I had in my mind.

    The post is more than a year old but its sill relevant. Good job!

  3. James says:

    Thank you for your tips about the basic of MLM. Surely, this will help people find a good company.

    If I may add, if we really go into the basic of MLM, it’s very simple – All we have to do is to find people like us who would like to do what we are doing. Just find the presentors and users of the products at the start. These will be the leaders and easier to achieve duplication of the business … and this will be the secret of residual income.

    Robert Kiyosaki, Les Brown and other great writers and motivational speakers have very good things to say with this industry. :)

  4. I lost lots of time and money following my sponsor’s advice, he was successful and still is, but I could just not duplicate his system, thank heavens for online MLM and the ability to generate leads online. What is your best lead generation strategy, if you do not mind me asking. Thanks.

  5. Erin Villanueva says:

    I own a printing press, since i have always believed in the power of leveraging, i decided to convert my business by using the marketing strategy to dispose of my products, be helped, and help others. If i like to own the franchise and have other people avail it, what should i do? pls help

  6. Mark Anthony Armea says:

    How to know if a MLM company is a scam or legitimate???

    Basically even you don’t make a research,you will easily find out if a MLM company is a scam or not. If your investment is value for money it is not a scam. Here in Philippines the required return of investment should be at least 72% should be returned to you by products and benefits. :) If a company offers no product and no effort it is a scam. :)

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