In this MLM review I’ll tell you exactly what an MLM company is about but the choice is yours whether you should get involved with one or not. Not all MLM companies are the same. Even so, you may want to think twice about it.
What is an MLM Company About
When it comes to MLM companies, MLM stands for multi-level marketing. MLM is also referred to as a pyramid scheme, network marketing, as well as referral marketing. However, MLM (multi-level marketing) is a marketing strategy for the sale of products or services.
The revenue of MLM companies depends on using a non-salaried workforce to sell the company’s products or services. But the compensation to this non-salaried workforce, is based on a pyramid-shaped compensation commission system.
That means the commissions you earn working for a MLM company is not solely yours but it’s shared multiple ways. How many ways in which it is shared, all depends on the pyramid structure. So after all is said and done, all your hard work may not amount to much commission for you.
For example, think about your job for a minute. You get a salary and that salary isn’t shared with anyone on your job. Now if you were working for an MLM, you won’t have a base salary but be paid on commissions for the products or services you sell for the company.
However, you won’t be paid all the commissions you earned, but part of it. How much you are paid depends on the commission structure of the MLM company.
2 Common Features of MLMs
Compensation plans for MLM companies would vary across the board.
- Each company dictates its own specific financial compensation plan.
- Compensation plan pays out from at least two (2) revenue sources; your commissions from sales to your customers, as well as from your down-line.
So whoever you sell the companies products or services to, you’ll make a commission from that. If your customers also become sellers of said products and services, then you earn from their commissions as well. In this case, your customers become your down-line. So the cycle of the split commissions continue.
MLMs Compensation Plans
In some cases, the compensation plans of these MLMs can often be complicated. For example, the compensation plan of Pampered Chef is a doozy. They must have some kind of system to help them keep track of who is doing what.
With pampered Chef there are several ways in which you can earn commissions. You can earn as a consultant, senior consultant, team leader, director, advanced director, senior director etc. But it may not be as easy a journey getting to the various levels.
How to join a MLM company
Each MLM company would have it’s own requirements for joining. For example, in some cases you actually have to purchase the products/service up front to get started. Most often this is a monthly requirement and it has to be a certain amount. Remember you are a sales person. But the difference is you first have to buy the product, then sell it.
In some cases you are offered different levels of membership, with the promise of making more money. In some instances the level of membership could be tied to the amount of sales you make and in other instances you may have to pay for the membership.
Are all MLM Companies a scam?
No. All MLM companies are not scams. There are several ways in which you can spot a scam. But one sure-fire way is if the company does not have a product or service being offered. For example, if it’s all hype like Empower Network and MOBE, then don’t even bother.
There are legitimate MLM companies out there. In fact, you may have heard of some of them. Check out the top 20 MLM Companies below, based on revenue.
Top MLM companies
Of course there are lots more, but this is a good list to get started with if you are thinking on getting into this sort of thing. The top 20 MLM companies based on revenue, include the following:
- Avon Products Inc.
- Herbalife Nutrition
- Nu Skin
- Young Living
- Oriflame cosmetics
- Rodan + Fields (Creators of Proactiv)
- Ambit Energy
- DXN Marketing
- O Boticario
- USANA Health Sciences
Now while these companies made millions and billions of dollars, it s not certain how much there non-salaried workforce made. What we know for certain is that the financial gains would have been centered around the top of the pyramid.
Should YOU Get Involved in an MLM Company
Well, like I said the choice is yours. However, according to the Federal Trade Commission’s website “at least 99% of the people who join MLM companies lose money.” It seems like the MLM business models just aren’t the best opportunity for most people, when it comes to making money.
So why do they flourish, right?
Well, because the participants in the down-line are often encouraged to hold on to the belief that they too can achieve the same large returns. But with a pyramid compensation plan, that’s unlikely, unless they are moving up the pyramid.
You are probably wondering if that’s the case, why do people join. Some people just don’t know of the statistical improbability. That’s often a fact that is de-emphasized by MLM companies. But you never know. You might fall into that 1% category, or NOT.
What is really boils down to is business ownership really. But these days it is very easy to start your own online business. That way you determine your own income. Added to that, if you don’t want to do it yourself, you can get someone else create and run your online business for you.
An MLM Company Alternative
If you don’t want to be part of the 99% and you are looking for a great way to make money form home in your spare time, then check out my top recommended work at home opportunity.
You definitely won’t have to split the commissions you earn, several ways. Added to that, you can create multiple streams of income. If that’s something you might be interested in and you want to go directly to the source, then click on the link below.
You’ll get some free training and you’ll meet a community of people that will definitely support you in reaching your financial goals. Is it going to be easy? No. But it’s worth it!