We have all heard about multi-level marketing at some point, and along with this was a pitch to set up an MLM business. The majority of the people who have heard this most likely had a more than just a little bit of scepticism when they heard the pitch, and the cautious ones definitely would not have given in because of the concept and how it goes against regular business ideas. But that is only on the earnings side. If you really do think about it, an MLM business has all the right ideas of sales without going through a retail outlet, which would just increase the price of whatever is being sold. Let’s go through the elements of an MLM business and see how the whole thing works:
1) The product – one cannot go into business without having a product or service to sell, and this becomes the core of your MLM business. It still has to be something great, sell-able, and should fill a need that already exists. All that needs to be done now is to prove that the product or service works so that your sales force could go out and boldly state that what they have is something that the buyers would want and need.
2) The sales force – in the traditional marketing world, you would be looking for people who would display your product on their stalls, and that could involve a lot of haggling. Even your price would be at risk because the retailers would definitely want a cut from the sales amount. In an MLM business, the retailer is taken out, and that money is used on the bonuses that your people would get. Let us delve into that a little deeper:
So with your sales force, you get one person to sell for you. He gets his products at a base price, and gets discounts if he orders in bulk. This person, let us call him salesman number 1, sells to a few more people, and two of them like the product so much that they decide to sell as well. They become salesmen 2 and 3. Since they are recruits of salesman number 1, he gets a cut of their sales because they are his team. That cut could be compared to the cut of the retailers.
3) The drive – of course every person wants to capitalize on all possibilities to make money, and this is what drives a sales force to push for more sales. They sell more, and they increase their team which increases their bonus and increases the sales force for the product.
Now how does this affect you? In an MLM business, it would be best if you are one of the first in your area to get the product and start selling. From there, you benefit from your own sales and start developing a huge team that would add to your bonus. It just needs time because you will need to develop presentations for your potential customers, strategies in order to increase your sales, and you definitely would not want to just enlist people to sell and then leave them on their own. Meetings with your team, celebrating their success and goal setting to further their earnings would always be helpful for both parties.
The concept of an MLM business is not new at all. It is just a new way of executing an old idea. Before jumping in and setting up your own MLM business, know the product that is being sold, and do a little research to see how effective it is. If it does answer a need, then you can start selling, and as you develop your team, you would be amazed to see how much you can earn is a short span of time.
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