MLM Home Based Business – Big opportunity if you do your research

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Multi-level marketing, more commonly known as MLM or network marketing, has received some bad press over the years and people looking for a MLM home based business tend to shy away. There are those who think it’s illegal because they consider MLM the same as a pyramid scheme – but there’s a big difference.

Donald Trump, appearing on the Dave Letterman Show on CBS, was asked by Letterman what he would do if he lost everything and had to start over.

Without missing a beat, “The Donald” answered, he would find a great network marketing company and get to work.

When he received some hisses and boos from the audience, he looked at them with complete and total authority and responded, ” that’s why I’m sitting here and you are all sitting out there.”

Pyramid sales, though often confused with MLM structures, are illegal because there is no solid product or service base. Newcomers have to pay a sum of money upfront just to get into the action but sooner or later the pyramid scheme collapses when the lower level recruiters fail to bring in enough new money to support the members on the highest level.

In a recent article aimed at those looking into a MLM home based business, Susan Ward owner-partner of Cypress Technologies, an IT Consulting business, explains the difference this way. “The big difference between MLM and a pyramid scheme is in the business' operations. The entire purpose of a pyramid scheme is to get your money and then use you to recruit other suckers (ahem - distributors).
The entire purpose of MLM is to move product. The theory behind MLM is that the larger the network of distributors, the more product the business will be able to sell.”

Many thousands of men and women are making substantial incomes through a MLM home based business while many others have been victims of ill-conceived programs because they failed to take the time to research the company, product or service behind the program.

In many MLM programs, individuals have to buy products at a wholesale price and sell them at the retail price for a profit – or it can be simply taking orders for later delivery. All the while it’s essential that a MLM salesperson builds a strong network of distributors. By sharing the product or service with friends, neighbors, family and acquaintances, one is able to build a strong network with which to move more of the product. A salesperson can then sponsor a new recruit and teach them both how to sell and build a business of their own.

If your considering a MLM home based business, Susan Ward suggests you consider these questions before you sign on the dotted line.

• Are you required to "invest" a large amount of money up front to become a distributor? This investment request may be disguised as an inventory charge. Legitimate MLM businesses do NOT require large start up costs.
• If you do have to pay for inventory, will the company buy back unsold inventory? Legitimate MLM companies will offer and stick to inventory buy-backs for at least 80% of what you paid.
• Is there any mention of or attention paid to a market for the product or service? MLM depends on establishing a market for the company's products. If the company doesn't seem to have any interest in the consumer demand for its products, don't sign up.
• Is there more emphasis on recruitment than on selling the product or service? Remember, the difference between MLM and a pyramid scheme is in the focus. The pyramid scheme focuses on fast profits from signing people up and getting their money. If recruitment seems to be the focus of the plan, run. These next two questions will help you determine what the focus of the company is:
• Is the plan designed so that you make more money by recruiting new members rather than through sales that you make yourself?
• Are you offered commissions for recruiting new members?

Do your homework – check with the Better Business Bureau. Don’t make a move or hand over any money until you know everything there is to know about the company, product or service that you will represent.

A MLM home based business can mean financial independence and being part of a well run MLM business can also make you part of a team that’s just like family.

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