Multi-Level Marketing - Pyramid to Fear or Brilliant Business Model?

Multi-level Marketing is a business model developed and operating in the United States and over 100 Countries throughout the world with great success.

The business model developed on a product direct to consumer concept solved man issues for companies that wanted to minimize their advertising dollars while rewarding their associates for taking proactive action to sell the products and promote the business to broaden the sales force.

Over the years this business model has been highly successful, sometimes abused. often argued and always controversial. Most of the controversy has stemmed from compensation plans that were developed by some companies that highly rewarded people for sponsoring people or encouraged product loading of their associates in order to obtain certain advancement in the established sales levels. As a result, scrutiny has followed the industry for years as individuals and watch dog groups alike take a close look at how companies in the industry are structured for product movement and compensation.

The term "pyramid scheme" has been the main slang term used for the industry in a broad sense instead of the specific offenders that were indeed built as pyramid schemes to defraud the public which certainly has happened over the last 40 years in the industry.

Ironically, the structure of the field representatives compensation often reflect how most conventional corporations are structured in a top down fashion though there are many variations of compensation plans used in the industry. From a matrix, to a unilevel, to a binary or stairstep break away...compensation plans vary greatly from company to company.

Are their companies that are "scams" in the industry? Let's say there are companies that have compensation or operational issues that may not follow the letter of the law for the industry. Possibly intentionally or by accident.

Two of the more obvious warning signs would be

1) A company that pays a sponsoring bonus with no product movement to justify the dollars payed.

2) A company that has all of it's product sales through the associates and none or very little to the general public.

If you are looking at or are part of a company that has one or both of these characteristics, it's a flaw that in the long term can become a problem.

All of this being said, direct selling or Network Marketing can be a highly effective means of getting a product to market or expanding a distributor base and literally millions of people worldwide participate in these companies mostly as independent contractors.

The advertising savings of network marketing companies can often lead to more affordable products or more research and development for companies allowing innovative products and solutions to be brought to market.

Ideally, if you're reviewing this type of opportunity your company should have a product or service that is absolutely stand alone and has a powerful WOW factor or Unique Selling Proposition that makes it easier to talk to people about and grow your business.

Additionally, having a product or service that ideally saves your customers money in this economy is something that will turn a lot of heads and will allow more regular people to succeed in presenting their business to the public.

If you have a product that costs a lot of money and doesn't immediately make sense to a broad market of people, you're going to have a much harder time successfully presenting and growing your business. Not all network marketing opportunities are therefore created equal.

Before you get involved in a MLM network marketing business, don't get caught up in the hype and excitement. Let the dust settle and be realistic with yourself and ask yourself if you can indeed see yourself presenting the products and the opportunity to people. Just try to visualize it. Can you? If not, you may want to keep looking for a wow factor that makes presenting it fun rather than work.

How you present your opportunity and products or services and to whom is a whole different topic that you need to become a student of once you join an opportunity.

Home businesses come and go, but a home business opportunity that has the most powerful unique selling proposition I've ever seen in my 22 years in networking can make all the difference. It saves people substantial money on something they absolutely need every single day and that fact alone will allow you to build a business faster and easier than you ever dreamed possible as you help families in a very dramatic way.

By Chris DeVincentis