|
On The Plus Side
Why are so many major companies using MLM, which
now accounts for tens of billions of dollars of sales
each year? Because they can sell products through a
distributor network without spending millions on
advertising and promotion to build up consumer demand.
Therefore, an MLM company is only as strong as its
distributor network. To succeed, such a company needs
many strongly motivate distributors. Distributors, in
turn, are attracted to MLM for the following reasons:
- Discounts. If you're a distributor, you can buy
the product itself at a discount. As long as you're
working with products that you ordinarily use, or that
your family members use, you benefit by buying
wholesale.
- Pricing. MLM products may offer better value
than traditional retail products because advertising
and promotional costs are reduced. This is attractive
to distributors who use the products as well as to
those who use low costs to help sell the products.
- Flexibility. When you work in MLM, you set your
own hours. If you have a regular 9 to 5 job, you can
spend nights and weekends on MLM, increasing your
income. Or if you have other responsibilities --
taking care of a young child, for example -- you can
schedule your MLM activities to suit your convenience.
- Taxes. There may be tax benefits to working in
MLM. Essentially, you become an independent
contractor, eligible to deduct business-related
expenses. A home office, for example, could translate
into a big tax savings but you do need to meet the
IRS's exclusivity rule: A home office must be used for
your business only -- all of the time.
- Low entry fee. If you're interested in a
business opportunity, you may have looked into
franchising. Virtually any franchise would require you
to put up thousands, even tens of thousands, of
dollars. In a legitimate MLM venture, your up-front
contribution usually is less than $100.
However, although it is true that the cost of
entering an MLM organization is much lower than the
cost of entering a franchise business, it may not be
realistic to expect your only cost to be one $50
distributor's kit. You may have to spend several
hundred dollars or more to buy samples, sales aids,
etc.
- Low ongoing costs. Most MLM businesses can be
run out of a home office, with no need for employees,
equipment, or inventory. The only inventory you'll
really need will be samples for recruiting efforts and
for direct sales to your own customers.
- No territorial restrictions. Many franchises
limit you to a certain area. In many MLM
organizations, you and your downline can sell to
anyone.
| |
