Monday, September 7, 2009

MLM is not MLM itself

MLM is not MLM itself

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.

As a result, many network marketers end up:

  • over-selling the opportunity
  • inappropriately discussing business in social situations
  • coming across as desperate
  • over-focused on new recruits and neglecting existing customers as a result
  • being either inaccurate or deceptive when talking about their business
Again, I'm certainly not saying that this describes a majority of network marketers, but it does describe enough of them to tarnish the reputation of the rest. To pre-judge someone based on the basis of a small minority of people in that group is horribly unfair, but we must realize that most prejudices have some basis in reality, even if it has been distorted.

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