MLM - The Money Tree?
Multi-Level Marketing or MLM, as it is more widely known, is one of those business schemes that has, over the years, drawn more criticism than praise. As the title indicates, this article is not going to break any revolutionary ground by trying to bring out the latent goodness about MLM.
The very nature of the MLM business is enough to set tongues wagging about the dubiousness of it all. To state how an MLM business works briefly, a company has a network of distributors to whom it sells its products at wholesale rates. These distributors in turn sell the same product at retail rates to other people and work on converting these customers into potential distributors. There are incentives provided at different levels for selling goods, converting customers into distributors, etc. So the network keeps expanding and more and more people are drawn into it and more and more sales are made, profits reaped. At least, theoretically.
MLM - The Flawed Approach
However, there is an inherent flaw in this approach. Before talking about this flaw, ask yourself these few common sense questions - How big would the MLM entity end up being? Is it really feasible to connect the entire world into one global network of distributors and customers? If everybody were to sell, who would buy? This is a basic challenge to the age-old concept of supply and demand itself.
Going by the logic of the MLM business model, it is only fair to assume that the business would collapse under its own weight.
MLM - Where is the Money?
As far as the money is concerned, the salesman or the distributor is not likely to see too much of it anyway. An MLM basically is a top down approach and the only way money can be made is by trampling on the guy below you. The higher you are, the greater the chances that you might actually make a quick buck. But a quick buck is not where everything in life ends up. There are other things like accountability and, therefore, there are strong chances of finding yourself on the wrong side of the law, facing embezzlement or fraud charges, if you were actually a higher up in the MLM food chain and actually did manage to make some greenbacks for yourself.
MLM - Finding the Suckers
By its very definition, an MLM outfit is not necessarily the same as a pyramid scheme float. A pyramid scheme is by definition illegal, since it sells only a concept, not a product. On this count, MLMs beat the rap, as they actually sell products. However, if taken in the spirit of things, there is very little to differentiate the two.
Basically, finding the suckers is never the problem. There have always been too many people in this world wanting to make a quick buck, too many dreamers wanting to plant the money tree and watch it blossom in their backyard with no labor from their side. As long as there are MLM schemes floating around, there will be distributors, there will be customers and there will be customers that will turn distributors. Like they say, it is all about the money. The sad thing is that in an MLM scheme, chances are you won't get to see too much of it.
Robert is a full-time Internet marketer, author and publisher and contributes to http://www.CashConfidentials.com on a regular basis. Robert provides new and unique ways to make money online - check it out!