Multilevel marketing is sometimes frowned upon by people, with some even calling it pyramid selling, which it’s not – pyramid selling is obviously illegal.
But multilevel marketing, these days, is a pretty good method of setting up businesses. There are a number of reasons that it works very well, and why you should consider that type of business structure if you’re looking to try to make some additional money.
However, there are a couple of things that you need to still be careful about.
What To Watch Out For
Firstly, if you’re going to go into any type of business, you want to actually make sure that you believe in the product. Assuming you believe in the product, that is the biggest barrier out of the way, and therefore you need to have a look at the business model on how you can make sales and make money.
Too many multilevel marketing businesses or online businesses are set up with the promise of making big money, but the actual product is either not too good or just overpriced.
Where multilevel marketing works really well is that it’s not reliant on just you finding multiple people to buy the products. The selling part of the business might not be your biggest skill, but what you can do is recruit people into your network, and some of those people will have very good skills for selling products. Others may have very good recruiting skills.
If you build a network with people with various skills, you’ll find that you make money. So multilevel marketing makes money in two ways. Firstly, with most multilevel marketing plans these days, you have to buy the product, so you’re a consumer, and sell the product. You are then selling to other people who may want to use the product.
The people that you’re selling to, you want to get them set up with an automatic order, so that they’re buying products every month, and you’re therefore getting recurring commission from those products every month. That’s the sales side of the business. Often, you only have to have a few people set up on that to ensure that your product purchases are effectively paid for through your commission payments.
The exciting part of the business is recruiting people that want to use this to make money. Those people will also be customers, so they will be purchasing products, and they will be recruiting people to become customers as well. But in addition to that, they will be recruiting people whose main focus will be on building a network.
Where multilevel marketing comes into it is that every person within the specified network, you will get a small percentage of the commission that they earn in the company. Unlike pyramid selling, you only get the commissions for a restricted network, rather than commissions on everybody. This is done to ensure that you try to help people build their own teams of businesses, as well as being actively involved yourself.
The benefit is you can build up a very strong passive income that recurs every month and puts dollars into your bank account. Good network marketing companies are good businesses too. Many of them focus on having exceptional products and making sure they have pretty good value for money. They can do this because they are generally the manufacturers of the products, as well as the retailers, or you are the retailer. Therefore, they cut out a huge chunk of the distribution and cost. This allows them to share the product and the value of the product.
