The Flaw With Most Network Marketing Programs

There has been a tremendous amount of attention good and bad to Network Marketing or as better known Multi-Level-Marketing (MLM) in recent years as people struggle to find sources of income. An MLM is where a product or service is sold through a pyramid of distributors with everyone that is above someone making money from the sales of other people below.

MLMs have been around for years. Over 30 years ago people were selling Amway products and others. Recently Hello World (video email) and Mona Vie (juice) were the rage. Both of these products had well thought out marketing plans and attracted “affiliates” by the thousands. There is no doubt there is money to be made with any of these and thousands of people have done very well. However, for the vast majority what they found is that it is very difficult to sell a product or service to your family and friends where you are soliciting them to sign up and spend money. Why is that so?

The answer leads to the flaw most of these multi-level-marketing products have. They are either selling a vastly overpriced product so that each level of the pyramid can make money or they are selling a product or service that is flawed or has very little practical benefit for the user and the only benefit is for people higher up in the pyramid.

Let’s take our two earlier examples, Hello World and Mona Vie.

Hello World was a great idea without the infrastructure to support it. It just didn’t work very well. Mona Vie on the other hand was a decent product but overpriced at $40 for a fifth of juice and required that you buy a case every month, basically spending on inventory you might not sell or use. You would never buy it based on value. So who would buy into these programs? Only people who hoped to capitalize on the pyramid aspect and sign up people below them. And as thousands found out, that isn’t so easy! That leads us to the next thought.

What can make a MLM pyramid successful for all members? The answer is to have a product or service that has value based on its own merits without relying on the pyramid aspect. In other words, something you would use whether you made money or not. Can you think of anything like that? How about something for Free or that saves you money instead of costing you money.  Some of the shopping MLMs fit that criteria where you get to shop for items you would search for and buy anyway and with the shopping network you get a discount and also the opportunity to sign up people on the shopping network under you.

Two out of three people shop online. As people have found out it is the easiest and most convenient method of purchasing goods or services.    I’ll let you search online and see if you find anything similar to this that suits your needs.  Bear in mind that to be easy to sell the MLM aspect, the product needs to be of value.  When getting involved, don’t fixate on how  you can make money signing up others but if the product is of value.