Network Marketing - Pros and Cons of Earning MLM

Service Business

Network marketing is a very attractive form of earning money for some people. Although this method attracts flexible working hours, attractive profits, bonuses and discounts on products sold, it has many opponents. What is network marketing? Is it an attractive form of doing business or is it a great scam? We present two sides of the job coin in the form of MLM.

What is network marketing?

Network Marketing, also called Multi Level or MLM, comes from the English name Multi Level Marketing. MLM is built around a kind of sales ladder. Obviously, the more sales someone gets, the higher they climb the rungs of the ladder. The basis of network marketing is the lack of a traditional sales network so anyone can start making money this way. The company's products are sold by thousands of people around the world, without the involvement of stationary stores or stands in shopping centers. In addition, network marketing is guided by the principle of reducing costs related to marketing activities for the benefit of co-workers. The key issue in the form of MLM business is gaining as many sellers as possible, who build a network of contacts and sell products themselves. Additionally, companies based on network marketing do not have managerial staff to manage sales. Each distributor of goods has equal rights and equal chances of reaching a higher level in the hierarchy.

Network marketing - advantages and disadvantages of multi-level sales

As with any form of work, network marketing also has its advantages and disadvantages. It is good to get to know them all and consider whether this form of business is right for us.

Advantages of Network Marketing:

  1. Low start-up capital - many forms of business involve high investment costs. Additionally, we need an office, goods and warehouse to store goods. Network marketing frees us from all these expenses. All we need to do is sign a contract, get a starter kit and start our business.

  2. Flexible working hours - thanks to the MLM method, you can be the boss yourself. You work when it suits you and wherever you want. There are no set hours or limits, you decide how much time and commitment you want to devote to this work.

  1. Possibility of creating your own network of distributors - in order to earn more in MLM business, you need to build your distribution network. By inviting more people to work, you get additional profits. The level of generated income depends on orders that will be carried out by people from our distribution network.

  2. Support from leaders and training - each leader wants the salespeople in his structure to achieve the best results for a simple reason - their remuneration depends on it. Therefore, they help you achieve better results. In addition, network marketing companies often offer various types of training, where you can learn the best sales techniques.

  3. No restrictions due to age or education - it does not matter whether we have higher or vocational education and what age we are. When selling MLM, willingness is more important than experience and skills. For this reason, it is a good solution for people who have just graduated and would like to gain experience and earn.

Network Marketing Disadvantages:

  1. A large number of alternative products - there are many options on the market to buy products - in stationary stores, online, in shopping malls or supermarkets. To sell your products, they have to be either very attractive, at a low price, or we need to sell well.

  2. No impact on the prices and quality of products - often the prices of products offered in the MLM system are very much overstated. We cannot influence their amount, so we are forced to offer products at a price agreed in advance. The same is the case with the quality of the goods. Even if we know that the offered product differs significantly from what we present, we cannot change the manufacturer in order to obtain a better quality of the goods.

  3. It requires a lot of commitment and patience - in order to earn more money, you need to be patient and be prepared for customer refusals. It may take many months or even years before we learn the right sales techniques and gain experience. For some, it may be too much of a sacrifice for the initially low earnings.

  4. You earn for people higher in the hierarchy - until you create your own distribution network, your earnings will not be very satisfactory. In addition, the greater part of your sales will go to the person higher in the hierarchy.

Network Marketing seems like a great sales tool, but it requires a lot of dedication. MLM allows you to generate a lot of profits, but it cannot be said that it is easily and quickly earned money. Is it a profitable business? Everyone should make this assessment on their own.