Big Myths and Facts About Multi-Level Network Marketing Programs
This article is posted under Business, Income Opportunities.
At some point in your life, you must have been invited to join a multi-level network marketing company, I know I have – as well as almost everyone I’ve asked.
So did you join? If yes, did you lose your money or did you make some?
If I invited you now to join a network marketing company, would you consider becoming my downline or would you become turned off and never come back here again?
Truth be told, there are really a lot of people who have lost money in these companies. But I wouldn’t entirely blame it on the network marketing company.
While some are indeed pyramid and ponzi schemes in disguise, there are however, a handful of network marketing companies that have produced multi-millionaires.
I am not a member of a network marketing company (you’ll find out why later), but that does not mean that I don’t like them. Actually, I do encourage people to try it out because it is really a proven way of becoming rich.
And so for those who are “allergic” to MLMs (like I used to be), and for those who are actually thinking of joining one – I now give you some big myths and facts about Multi-Level Network Marketing programs which I hope you would find useful.
Big Myth:
Start-up MLM companies are better because its market is not yet saturated.
Fact: Saturation does not exist.
Ms. Rhea Horrilleno, a Nu Skin Blue Diamond member, explained it well by saying that if there is saturation in network marketing, then it follows that there is also saturation in other careers as well. This means that new doctors, new lawyers and new engineers should not be able find jobs today – but most of them do (if not in the country, then overseas).
Moreover, you can just simply look within your social circle – how many of them are active members of a network marketing company? Chances are there is none or only one or two.
Fact: Since there is no saturation, then it follows that it’s better to join established network marketing companies.
While I have nothing against new MLM companies, I do have a bit of bias towards network marketing companies which have been in the industry for decades because that’s proof that their compensation system is strong and sustainable – pyramid schemes usually last only a few years.
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Big Myth:
You have to be one of the first to join so you can be on top and be able to make the most money.
Fact: The amount of money you earn does not depend on when you joined or where you are in the geneology graph. It depends on how productive and effective you are in selling and recruiting.
I have personally met two people who have experienced tremendous success in network marketing. One is a distant relative of mine and the other one, the mother of a friend. Both have joined in the early 2000′s and are now financially free.
What’s important to note about them is that, they actually earn more than their direct upline and the MLM companies they joined started in the Philippines way back in the 80s and 90s.
Big Myth:
You don’t have to be a salesperson and you can do this on your spare time.
Fact: If you want to be successful at this, then you have to be a salesperson or at least be able to learn and develop sales techniques.
There are three things you actually sell in network marketing: the products, the income opportunity and your success. If you don’t know how to sell at least two of these three, then you’ll fail at it.
Fact: This will take up most, if not ALL of your free time or more.
As I’ve said in my previous post on The Basics of Multi-Level Marketing – joining an MLM company will involve setting-up and attending regular meetings and marketing schedules.
Moreover, you will likewise be spending a lot of time generating leads and following up on prospects, and not to mention attending more seminars to enhance your sales techniques.
And this is the main reason why I’m not into network marketing. It’s because I don’t think I’ll be able to give it time priority for I am already busy with other endeavors. However, I’m not closing my doors to it. Maybe in the near future, I’ll suddenly drop everything and join one. 
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Big Myth:
It’s easy to become rich in network marketing.
Fact: Network marketing is NOT a get rich quick scheme.
Again, according to Ms. Rhea Horrilleno, a network marketing business takes five years to mature. I’ve met many who quit within a year and leave feeling they were tricked into joining – now I know why.
Many considered MLMs as a way to make some quick bucks. Lured by the prospect of earning millions, they become disillusioned and disappointed when one by one, their prospects reject them and their friends start to avoid them.
A network marketing business is at the most basic level – a business. Which means it’s something that you should nurture and grow, with patience, determination, passion and focus.
How about you? Do you know any more big myths and facts about multi-level network marketing? Do share them below.
Moreover, one question that many readers have asked me – how do you know if a network marketing company is a good one? We’ll explore the answer to that question and discuss how you can choose the right MLM company that fits you in the next few weeks, so be sure to subscribe to Ready To Be Rich and not miss out on that post.
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Photo credit: dsevilla and James Thorpe
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Hi, my name is Fitz and this is my blog.
Nice article… i agree with your analysis of Myth #s 3 & 4, especially. Thanks!
I will anticipate the sequel to this.
Thanks for the excellent, well written, and informative post. The part about sales really resonates with me. I wrote in my ebook that you MUST have sales skills to succeed in this industry. Without this, it is almost impossible to find success in MLM.
Thanks again!
Michelle
I really do not trust MLM companies in the Philippines especially those that highly depend on earnings from new recruits.
Making money online is better than MLM…
Recently I’ve been attending seminars on FINANCIAL LITERACY and so far I’ve learned a lot about them and about money management and investment – mutual fund, health insurance, real estate ect.
Their company is the INTERNATIONAL MARKETING GROUP or IMG located at AYALA. Their progarmme so far is giving seminars Series 1 to 25. From series 1 to 3 it’s free but from series 4 and above you have to pay around P3,700 pesos for the kit, brokerage license and the S.E.C. registration.
I have been acquainted to a lot of them their. Some of the trainers are doctors, musicians others have work outside too.
I was asked to bring in somebody their to.
I am close to believing that they are MLM to or Networking company.
Just don’t know if you know about this company Fitz? If you did, please hit me back!
Thanks more power!
By the way here’s their website: http://www.img-corp.com/index.php
Hi Fitz, I just want to share my article with regards to this topic of yours entitled “25 Questions to Ask Your Sponsor in MLM”. This pretty evaluates what should be considered in joining an MLM company. It is also my most commented article among all my posts. :
http://www.millionaireacts.com/1450/25-questions-to-ask-your-sponsor-in-mlm.html
@Roldan – Though, you asked Fitz, I cannot help but express some unsolicited thoughts
IMG is a network marketing company. They package products/services ( from different companies i.e. ALI, Grepalife, PhilEquity, etc.) which fit into their mission/vision. Financial literacy is VERY important (Fitz, I am sure won’t disagree to this.). That is IMG’s core mission, which I believe is a noble one. Learn as much as you can from their seminars. It is also their aim that all members will be good financial planners and executors. Hence, aside from seminars, they also package and sell the corresponding products/services.
I know some people there at IMG, and some from World Marketing Alliance (way back 2000)- which, if I am correct (verify this), is where IMG is affiliated.
I am not a member of IMG now for 3 reasons:
1) TIME – I do not want to chew more than what I can swallow. It is really great to know that there are lots of opportunities out there. But, time is our only true limiting resource. I will feel I am being ‘greedy’ if I get into it with my current load, and perhaps, just make a mess out of it.
2) I already have similar products/services (real estate, insurance, mutual fund, etc.) that IMG offers. As for their seminars, I am already exposed to the concepts way before, through other companies and from my own personal study, learning, research and experience. But, I do not mind attending their series of seminars if I can squeeze out time from my current schedule. I am sure I will pick up a thing or two and learn some more, and meet interesting people.
3) If in case I decide to give it time, I think I will rather setup my own company with similar mission.
Every business, IMHO, has a bit of ‘network marketing’ by nature. All have to ‘network’, ‘connect’, to people for the business to flourish. Profits from sale of products/services are also given to people involved in the business process.
Network marketing, multi-level marketing, or direct selling companies are very good ‘schools’. It is in this business that you can have the chance to really know your potential, your strengths, personality, attitude – an acid test worth going through. It is also in network marketing that you can learn a lot about and from people you know and those you just met in the process. The results are visible and palpable – success, disillusionment, positive mindsets/attitudes, mental closure, etc.
When the dust settles, I would like to think that it is mostly not about the company that network marketers experience failure, but it is what they do in the business process. Like all businesses (MLM, traditional, or whatever classification), an MLM or network marketing, or direct selling company, is still a business. There is always the risk of failure, and of course success.
Learning, applying, learning some more, and applying some more, making decisions, going for it – is the process which makes this ‘life’ more exciting. It goes the same with any business, network marketing or not.
Nice post Mr. Fitz, and very inspiring for people aspiring to own mlm networking business. Just found an mlm site the http://www.chatching with SEC approve as http://www.sec.gov/cgi-bin/browse-edgar?company=ChatChing&match=contains&action=getcompany, have you come across this mlm site? I found it nice same as your site. Thank you for a nice article.
Are you open for a joint venture?
kind regards
Peter