Before we get deeper into the pros and cons of multi-level marketing business, let me explain briefly about what exactly is this multi-level marketing?
Some direct sales businesses utilize MLM techniques to market their products and services. Existing multi-level marketing members are encouraged to advertise and sell their products to others, as well as attract new members into the firm. Distributors are compensated based on the sales of their recruits. New recruits join the distributor’s downline, or network, and are pushed to generate sales in order to earn money. It is also called the binary system MLM.
Pros of using MLM techniques for business
- Offers business opportunities to all people
Multi-level marketing, from the name itself shows that it will require a lot of people to make it a successful business. Most MLM businesses have a development ladder in place to assist consultants understand what they need to do or achieve in order to earn greater commissions or expand their network. It is simple to establish an MLM with a modest initial investment which means almost everyone (who are interested in business) can get involved with business starting with joining any multi-level marketing business.
- Financially effective
Because MLM works in several levels and the distributors are self-employed, the firm does not have to pay set wages to the participants, and they profit from sales commissions, which keeps MLM’s sales costs cheap. You will also be able to get free coaching or mentoring sessions with your consultants, so you won’t have to pay for any separate classes. A multilevel marketing firm can help you earn ends meet, save for retirement, or increase your overall financial freedom.
- Flexible schedule
If you are working for any multi-level marketing business, it is highly likely that you will work on a flexible schedule which means that you can work at any time, from anywhere you are. You are not fixed to work like any other business which you will have to work from 8am to 5pm. With MLM business, you can even work at night if that is the only free time that you have.
Cons of using MLM techniques for business
- Exposed to scams
If you are well aware about multi-level marketing business, you will know that there are a lot of scams that uses the name of multi-level marketing. That is usually the illegal MLM business. People are wary of such schemes and are hesitant to work for them. More than the benefits, the frauds lower the worth of this company. When people start to question your business, there are less people who will be joining your team which results in bad income.
- Low success rate
Since MLM is not a strict business, people can easily come and go. I have seen some people who joined a multi-level marketing business, quit and mostly because they are looking for instant money. In MLM, you have to be patient and master all the marketing skills and that helps you to attract customers and people who are interested to work with you.
- Lack of training and support
This usually happens if the MLM that you are joining is a scam. They will just take your money and make you join a few training sessions. After a certain period, they will stop mentoring you.