The Pros and Cons of Network Marketing
It never ceases to amaze me the extreme polar views on the topic of network marketing and MLM. Some people are passionate about it in the extreme, and there are even top celebrity authors like Robert Allen, Mark Victor Hansen, and Robert Kiyosaki doing it and advocating it. Yet, in many circles, you might as well declare yourself a leper as admit to being in network marketing.
So, what is the problem with MLM and network marketing?
Maybe it's the pyramid structure? But you can't really take issue with the tiered compensation structure--almost every large sales organization in the world has that. Salespeople get commission, and sales managers get overrides or bonuses on top of that, and sales directors on top of that, and VPs on top of that.
Or maybe it's the fact that you have to pay to participate in it? But that can't be it--that's a standard franchising model. And I assure you, the franchise fee of most traditional franchises dwarf the sign-up cost of any MLM program by comparison.
Now certainly, there are illegal pyramid, or "Ponzi", schemes. This is where the money is all being made off of signing up other people, with little or no real product ever being delivered. But in spite of whatever perceptions people may have, the fact is that Amway, Excel, Meleleuca, PrePaid Legal, USANA, and many others have sold millions upon millions of dollars of products to happy customers, many of whom are NOT also reps. So, there may be a perception problem here, but if so, the perception is out of line with the reality.
But surely the bad reputation MLM'ers has some more basis in fact than the occasional illegal pyramid scheme?
The real problem with MLM is not MLM itself, but some of the people it attracts. Network marketing is just a business model, and it really amounts to "micro-franchising". Its upside is that it has a very low cost of entry, with the potential for exceptional revenue, and there are those who achieve that.
But those same things that make it attractive make it attractive to many who are NOT really qualified or prepared to become business owners. The salient characteristics of MLM make it attractive to people who:
have not done well in their business or profession and have little money saved up to invest
have no previous experience owning or running a business
have no previous experience in sales
have little or no experience developing business relationships other than that of employer/employee/co-worker
are not satisfied with their current level of income
have unrealistic expectations of the amount of work involved compared to the revenue realized
Don't get me wrong--I'm not saying that there's anything wrong with any of these things, or that this describes even a majority of network marketers--only that it describes a disproportionate number of network marketers, and that many of them never do anything about it.
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So, what is the problem with MLM and network marketing?
Maybe it's the pyramid structure? But you can't really take issue with the tiered compensation structure--almost every large sales organization in the world has that. Salespeople get commission, and sales managers get overrides or bonuses on top of that, and sales directors on top of that, and VPs on top of that.
Or maybe it's the fact that you have to pay to participate in it? But that can't be it--that's a standard franchising model. And I assure you, the franchise fee of most traditional franchises dwarf the sign-up cost of any MLM program by comparison.
Now certainly, there are illegal pyramid, or "Ponzi", schemes. This is where the money is all being made off of signing up other people, with little or no real product ever being delivered. But in spite of whatever perceptions people may have, the fact is that Amway, Excel, Meleleuca, PrePaid Legal, USANA, and many others have sold millions upon millions of dollars of products to happy customers, many of whom are NOT also reps. So, there may be a perception problem here, but if so, the perception is out of line with the reality.
But surely the bad reputation MLM'ers has some more basis in fact than the occasional illegal pyramid scheme?
The real problem with MLM is not MLM itself, but some of the people it attracts. Network marketing is just a business model, and it really amounts to "micro-franchising". Its upside is that it has a very low cost of entry, with the potential for exceptional revenue, and there are those who achieve that.
But those same things that make it attractive make it attractive to many who are NOT really qualified or prepared to become business owners. The salient characteristics of MLM make it attractive to people who:
have not done well in their business or profession and have little money saved up to invest
have no previous experience owning or running a business
have no previous experience in sales
have little or no experience developing business relationships other than that of employer/employee/co-worker
are not satisfied with their current level of income
have unrealistic expectations of the amount of work involved compared to the revenue realized
Don't get me wrong--I'm not saying that there's anything wrong with any of these things, or that this describes even a majority of network marketers--only that it describes a disproportionate number of network marketers, and that many of them never do anything about it.
The Pros and Cons of Network Marketing
It never ceases to amaze me the extreme polar views on the topic of network marketing and MLM. Some people are passionate about it in the extreme, and there are even top celebrity authors like Robert Allen, Mark Victor Hansen, and Robert Kiyosaki doing it and advocating it. Yet, in many circles, you might as well declare yourself a leper as admit to being in network marketing.
So, what is the problem with MLM and network marketing?
Maybe it's the pyramid structure? But you can't really take issue with the tiered compensation structure--almost every large sales organization in the world has that. Salespeople get commission, and sales managers get overrides or bonuses on top of that, and sales directors on top of that, and VPs on top of that.
Or maybe it's the fact that you have to pay to participate in it? But that can't be it--that's a standard franchising model. And I assure you, the franchise fee of most traditional franchises dwarf the sign-up cost of any MLM program by comparison.
Now certainly, there are illegal pyramid, or "Ponzi", schemes. This is where the money is all being made off of signing up other people, with little or no real product ever being delivered. But in spite of whatever perceptions people may have, the fact is that Amway, Excel, Meleleuca, PrePaid Legal, USANA, and many others have sold millions upon millions of dollars of products to happy customers, many of whom are NOT also reps. So, there may be a perception problem here, but if so, the perception is out of line with the reality.
But surely the bad reputation MLM'ers has some more basis in fact than the occasional illegal pyramid scheme?
The real problem with MLM is not MLM itself, but some of the people it attracts. Network marketing is just a business model, and it really amounts to "micro-franchising". Its upside is that it has a very low cost of entry, with the potential for exceptional revenue, and there are those who achieve that.
But those same things that make it attractive make it attractive to many who are NOT really qualified or prepared to become business owners. The salient characteristics of MLM make it attractive to people who:
have not done well in their business or profession and have little money saved up to invest
have no previous experience owning or running a business
have no previous experience in sales
have little or no experience developing business relationships other than that of employer/employee/co-worker
are not satisfied with their current level of income
have unrealistic expectations of the amount of work involved compared to the revenue realized
Don't get me wrong--I'm not saying that there's anything wrong with any of these things, or that this describes even a majority of network marketers--only that it describes a disproportionate number of network marketers, and that many of them never do anything about it.
So, what is the problem with MLM and network marketing?
Maybe it's the pyramid structure? But you can't really take issue with the tiered compensation structure--almost every large sales organization in the world has that. Salespeople get commission, and sales managers get overrides or bonuses on top of that, and sales directors on top of that, and VPs on top of that.
Or maybe it's the fact that you have to pay to participate in it? But that can't be it--that's a standard franchising model. And I assure you, the franchise fee of most traditional franchises dwarf the sign-up cost of any MLM program by comparison.
Now certainly, there are illegal pyramid, or "Ponzi", schemes. This is where the money is all being made off of signing up other people, with little or no real product ever being delivered. But in spite of whatever perceptions people may have, the fact is that Amway, Excel, Meleleuca, PrePaid Legal, USANA, and many others have sold millions upon millions of dollars of products to happy customers, many of whom are NOT also reps. So, there may be a perception problem here, but if so, the perception is out of line with the reality.
But surely the bad reputation MLM'ers has some more basis in fact than the occasional illegal pyramid scheme?
The real problem with MLM is not MLM itself, but some of the people it attracts. Network marketing is just a business model, and it really amounts to "micro-franchising". Its upside is that it has a very low cost of entry, with the potential for exceptional revenue, and there are those who achieve that.
But those same things that make it attractive make it attractive to many who are NOT really qualified or prepared to become business owners. The salient characteristics of MLM make it attractive to people who:
have not done well in their business or profession and have little money saved up to invest
have no previous experience owning or running a business
have no previous experience in sales
have little or no experience developing business relationships other than that of employer/employee/co-worker
are not satisfied with their current level of income
have unrealistic expectations of the amount of work involved compared to the revenue realized
Don't get me wrong--I'm not saying that there's anything wrong with any of these things, or that this describes even a majority of network marketers--only that it describes a disproportionate number of network marketers, and that many of them never do anything about it.
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The Pros and Cons of Network Marketing
The Pros and Cons of Network Marketing
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Product Details
| BN ID: | 2940012904843 |
|---|---|
| Publisher: | unique5stardeals |
| Publication date: | 10/22/2015 |
| Sold by: | Barnes & Noble |
| Format: | eBook |
| File size: | 256 KB |
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