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when we talk about “mlm” today we are dealing with a very
different kind of industry than in the old Amway days.
Many MLMs even today are basically built on frontloading.
frontloading is the selling of product to distributors at
a ridiculous high price that makes retail impossible. Thus
the emphaisis becomes on recruiting new associates who
will go on “autoship” in hopes of making some profits from
autoship sales in their downline.
Not far off is companies that charge big monthly fees for
service that is pretty weak. These companies are sometimes
really just paid membership sites.
I am not saying any of this is wrong…. just that in many
cases the real money is being made by company brass who are
selling shovels to the miners.
For me the criteria I look for is “no-monthly fees” to stay
in the business. With some of the new online opportunities
you do not have a business unless you have the website.
There are plenty of bizops where the company website is not
a monthly fee or is not a required purchase. These are good
ones to look at.
Most people marketing these programs online will be obliged to
promote more than one simultaneously if they want to make
profit. Monthly fees eat into those potential profit and
if you build a portfolio of bizops that have monthly fees
you may find yourself on a treadmill with the expenses
of staying active exceeding the income earned.
MLM emerged in the USA as a movement that was based in
communities. It was a distribution method for products
in a time when these types of products were not locally
available and many families had no car with which to
make shopping trips.
Today the problem with online MLM is the range of choices
available. The internet is a smorgasboard of get-rich
opportunities and the sense of community within the
people interested in these opportunities is characterized.
by a mercenary attitude among many of the leaders.
What this means is that with an MLM today, if you are building
online, your whole downline could disappear very quickly,
led by a pied piper.
The big-ticket direct sales programs are different because
successful promoters get paid up front – which at least puts
money in the pocket of the individual paying for the marketing.
A lot of people have migrated from MLM to big-ticket bizops
because of this factor.
With Multi-level Programs you generally need to build a large
organization before you make any significant money…
and those organizations have a tendency to be very fragile.
The post author, Loren Woirhaye writes sales copy and creates marketing systems for business clients who want to slash customer acquisition costs and position their businesses For 20%-30% sales growth in the next 12-18 months. He writes regularly about marketing and life at his Entrepreneur Blog.
