Joining Network Marketing: What to Keep in Mind

You hear all these buzz words: Network Marketing, Multi-Level Marketing (MLM), Social Selling. But what does this entail? Is this something you could do? Do you really make money? It is a scam? I'm here to answer some of these questions for you.

What is MLM?

First let's begin by defining network marketing: a business model that depends on person-to-person sales by independent representatives, often working from home. A network marketing business may require you to build a network of business partners or salespeople to assist with lead generation and closing sales.

Essentially, instead of companies selling their product to larger companies such as Ulta, Amazon, Target, etc., they instead create a compensation plan with a low investment rate for individuals to share product within their network from home. This opens opportunities for people of all backgrounds - stay at home moms, those with full-time careers looking for a side hustle, or those just looking to make a little money back on paying for their product.

Pyramid Scheme versus MLM

You certainly wan't to be cautious about inserting yourself in to something illegal. They are out there, so you want to make sure you research the compensation plan yourself first.

Pyramid Schemes are fraudulent schemes.

MLMs are lawful programs.

The difference between a pyramid scheme and a lawful MLM program is that there is no real product that is sold in a pyramid scheme. Participants attempt to make money solely by recruiting new participants into the program. If the MLM is not a pyramid scheme, it will pay you based on your sales to retail customers, without having to recruit new distributors. (Federal Trade Commission Consumer Advice, 2021).

Just make sure 1) there is in fact an actual product to sell, and 2) you can make money on your sales, without having to build a team.

Compensation Plan

A lot of MLM compensation plans are very similarly structured. Things to look out for are commission percentages of sales, personal and team sale bonuses, bonuses for rank advancements, and any bonus programs they offer when you first begin your bonus.

Each MLM legally has to release compensations plans to the public. If you have a company in mind, do a quick google search and I'm sure you will be able to find a helpful PDF or YouTube video with further explanation.

Investment versus Payout

Another key consideration is to be aware of the start-up costs. Many companies offer discounted product in trade for business tools (website, access to samples, trainings, etc.). Keep in mind how much you are putting into the business & know what it takes to make that money back before jumping in.

Quotas and Renewal Fees

The last important consideration is understanding minimum sales quotas or annual renewal fees (if any). If you are discussing the opportunity with a current representative, make sure you trust them and the information they are giving you is in fact true. Again, you are able to find this information by doing a quick google search. It may take some time to do the research, but it's worth it in the long run.

Join a Company and Representative You Trust

The bottom line is, MLM's can be a beautiful thing. They are high quality products that offer the ability for people to earn income from sharing something they use everyday just as they would share their favorite restaurant, recipe, or Target find. Often, the community serves as another great perk of joining an MLM with the ability to meet people from all over the world.

Unfortunately, people expect a "get rich quick" outcome which isn't realistic. Anyone can join a company, gain a few customers, & make enough to pay for their product. But if you're looking for life impacting income with your side hustle or to replace your 9-5, you do have to treat it like a business.

I'll be honest, I joined my MLM, Monat Global, without doing any of the research I mentioned above. I didn't know what to look for or really, how I would be paid. I was just a desperate new COVID-19 graduate who was having a really difficult time finding a job while at the same time, loving my hair products. I joined a friend of mine who I trusted and consider myself very fortunate to have partnered with a company that checks all the boxes above. To learn more about what I do and my company, visit the article linked below:

Why Monat