Multiply and Conquer
Yes, there are opportunities in MLM. Fortunes
have been made and will be made in the future. But you
need to know what to look for in an MLM organization,
and you also need to know what to avoid.
To begin with, you need to understand MLM.
Virtually any product or service can be sold via MLM,
but most of the companies in the field emphasize
consumer goods, such as cosmetics, vitamins, and
personal care items.
Every person in an MLM organization can sell those
products directly to a consumer, receiving a commission
on each sale. However, it's doubtful you'll succeed
strictly through your own sales efforts.
Instead, with an MLM program, you'll make the most
money by recruiting other salespeople, sometimes known
as distributors. Then, you'll earn a partial
commission, known as a bonus or an "override," on all
sales made by the distributors you recruit. Here's how
a sample MLM operation might work:
Every distributor starts out paying a nominal
amount (usually under $100) for a distributor's kit
that might contain a carrying case, a manual, a product
catalog, brochures, order forms, audiocassettes, video
cassettes, etc. In addition, distributors can buy the
company's products at a discount, say 20% off the
retail price.
Each distributor recruits other distributors, who
recruit still more distributors, and so on. All those
below you in your organization are known as your
"downline," and you'll share in the commissions on what
they sell.
Often, a minimum amount must be generated in sales
by your downline before you're entitled to bonuses and
overrides.
Suppose a first-level recruit (a distributor you
brought into the organization) reaches a certain level
of sales, $300 dollars worth of products in a month.
Then an override kicks in, and you might collect 5% of
your recruit's total sales. If a second-level recruit
(someone your recruit has recruited) reaches the $300-
dollar plateau, you might get a 4% override. This
structure continues down the line so you might get 3%
for a third-level recruit, and so on.
