This is a guest post by Larsa Michaels
Many people are considering home-based business as their new way of life. The cost of fuel, childcare, food, and clothing has become overwhelming, even for people with considerably large incomes. One option is multilevel marketing. The following are common questions about MLM opportunities:
1. How Does the MLM Strategy Work?
Multilevel Marketing is a moneymaking strategy what works on a down-line system. To put it simply, the person at the top of the line is the one who started the business. That person comes up with a new miracle product or service that he or she acquired inexpensively from a distributor. Somehow, he or she convinces others to believe in the product and in a special “business opportunity.” The believers invest in this miracle product by signing up for a continuous supply of it. The person at the top of the line automatically makes money off the believers.
Next, the line-topper explains to his or her “believers” that they can make their investment money back by selling the product and recruiting those buyers to push the product. He shows them a model of their potential profits. He promises them that they can make thousands of dollars a week if they recruit enough people. The believers then make tremendous efforts to recruit their own believers, from whom they (and the line-topper) will make money.
2. What Types of Products Do MLM companies Offer?
MLM companies market various products, from weight-loss items to beauty-enhancement systems. The products are usually overpriced and their effectiveness is questionable. The representatives in these companies often profit more from the individuals they recruit to sell the products than they do from the products themselves. This method of making money is often viewed as a scam.
3. Is MLM Profitable?
Success with multilevel marketing depends greatly on the person’s position in the down-line and how much efforts they put forth to recruiting. Naturally, the person who started the business is going to make the most profits because he or she receives money from every transaction that takes place. That person may very well make thousands of dollars a week while a newly recruited person may only make ten dollars a week. Anything is possible if the individual can learn how to use the tools to bring in new recruits. Most of the profits from MLM come directly from recruitment and not product sales.
4. Is MLM a Scam?
There are many multilevel marketing companies on the internet at this time. Each company has its own system and moral structure. One MLM company may use ethical tactics while others may not operate. The best way to find out if an MLM company is legitimate is to research the reviews. People who have been scammed or cheated in any way will definitely speak up.
5. What Should I Watch Out For?
One thing to look for is non-clickable authenticity seals. These are common on bogus MLM websites. Another thing to look for with MLM companies is extremely fine print. For example, some of them offer “free” videos to potential members. The company promises that the individual will learn how to “make money fast” from the video. Quite often, an excited prospect will give his or her credit card number without reading the fine print. This usually ends up with that person being charged $39.95 after the “trial period” ends. Not only that, but some of the videos do not even contain useful information.
About the author: Larsa Michaels enjoys writing about consumer protection, saving money & Buy.com Deals.
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