Multi-Level Marketing (MLM) What You need to Understand

I was with a young man who was telling me about how he plans to compete with Warren Buffet anytime soon and would want me to join in this great opportunity so I could become the richest person in my neighborhood then move on to become the richest in my province and the richest in and my country if I am serious with it, and I will have to work from home instead of working 9AM to 5PM in an office. It sounded to good to be true but since I wanted to learn a thing or the other from him, I decided to pick a date for a meeting with him and another person who was involved in his business. When I got to the meeting, I was shocked that I was introduced to a multi-level marketing scheme. A lot of people like Multi-level Marketing (MLM) but for me it is not really my thing, so I opted out of it. In this post, I will explain a little about MLM, you should take time to read this post to the end.

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The MLM Referrer Business

Before I continue, let me say something about business models. The fact that a business does one thing does not mean that is the business model of the company. Facebook is a social media where people meet with each other, connect and enjoy postings but this isn’t Facebook business, Facebook is in the business of advertisement in this like is the business model for MLM different from what we see it t be. It is no crime to use referral program in businesses, a lot of businesses use referrals to get more people to purchase their products and services but that of MLM is unto another level as MLM do pay people for referrals and still pay the referral for downlines brought in by their referrals

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Although most MLM companies have products they sell, they basically know they do not have money to pay for big advertising, more so nothing sells better than sales from the words of mouth, so the company decides to use people to sell their products by selling the products to them and emphasizing on bringing in downlines to purchase the product so they get more products cheap or get cash price. MLM companies sell their products which in so many cases is not known by the people around and the product are sold at a very inflated price to the people who buy from them to resell as well as their downlines.

The downside of the Business

MLM seem like a good business but the truth is the business model isn’t going to work for long because first the products are sold at a very expensive price, most of these products do not even do what they say they do, the people who are marketing do not have prior knowledge on marketing and even people who can market products very well would find it hard to sell products that aren’t guaranteed to work.