How Does Multi-Level Marketing Work?

Oct 5, 2018Sheffield Blog

What Is MLM?

Multi-level marketing is the process of ordinary people selling products or services for an established company. They work as independent contractors, not employees, who receive sales commissions. For every sale they make, they receive a percentage of the profit.

In the past, this process involved the activities of door-to-door salespeople. A well-known example is the Avon commission program in which women sold makeup products door to door. Modern examples are affiliate marketers who advertise the products of other companies on their own blogs or websites.

How Is It Legitimate?

Multi-level marketing is legitimate for many salespeople and companies around the world. Earnings from sales commissions provide supplemental incomes for millions of people. People who sell products independently usually work from home, free of supervision, and choose their own work hours.

Although not the same as MLM, a similar example is a franchisee who sells the products of a franchise. The franchise is a well-known business that has proven its ability to make money successfully. Like franchisees, MLM salespeople rely on companies that are proven to earn them a steady stream of profits. When the business that they work for is legitimate, the entire MLM process itself is legitimate.

How Is It Not Legitimate?

Make sure to do your research before investing in an MLM company. MLM stops being legitimate when the products being sold are worthless or not capable of earning steady profits. The sellers cannot make commissions if no products are sold, and the only people who make money are the MLM companies. Then, it is called a pyramid scheme that rips off salespeople who fail to sell products or services that no one wants to buy. So make sure that you do your homework first and ask the right questions.

When Is Consulting Needed?

Working independently is more difficult than working as a salaried employee. There is no guarantee that the earnings will flow in steadily, and for many salespeople, it takes months until they see the results they want.

In the first year, most of the people who participate in network marketing do not see any profits and immediately quit. However, no successful business person gives up without coming up another plan. It’s recommended that you have the right amount of patience and the right resources to succeed in business. Consider hiring a MLM consulting company to create a more effective plan for finding leads and retaining customers.

Multi-level marketing does not guarantee overnight results. In fact, you will not get immediate results and have to work harder than salaried employees do. That does not mean that it’s all a scam, though. And you can obtain MLM consulting to improve every aspect of your sales campaign. If you’ve tried but continue to find no success in the first year of a MLM business, contact a network marketing consultant through Sheffield Group.