1 / What is MLM?
NETWORK MARKETING OR MLM | Multi-level marketing is a form of business development that combines all the characteristics corresponding to today’s needs, responding to the 3 issues that everyone needs for their professional well-being:
A remuneration compatible with your effort ;
Projection of opportunities for a successful professional career;
Recognition of work and results
An MLM company is a structure that markets a product or a service, through an outsourced and autonomous sales force, offering you the best guarantees of success, thanks to the provision of various services (communication, technologies, lobbying, partnerships, economies of scale…) impossible to obtain by yourself.
The world of work is undergoing an unprecedented change with the automation of tasks, the growing desire to make the most of one’s time, the search for independence and the advent of “remote” work.
The salaried model is disappearing and entrepreneurship is exploding. Network Marketing is the way to combine all the advantages of salaried employment (brand benefits, strong products, team spirit, etc.) with the positive points of entrepreneurship (attractive remuneration, freedom to organize work, etc.)
WHY NETWORK MARKETING OR MLM – A SUCCESSFUL MLM BUSINESS NECESSARILY INTEGRATES THE FOLLOWING 7 PILLARS :
The entrepreneurial spirit: it gives everyone the possibility to increase their income according to their involvement and in complete independence, without any hierarchical link.
An attractive remuneration plan for financial freedom: There are 2 possibilities of remuneration in MLM, either for own production (sale of products or services), or for the accompaniment of new members until success. One does not exist without the other, in fact it is difficult to explain to others how to do it, if you do not do it yourself.
Scalability: Few businesses are “scalable”, MLM is by nature because with the same effort you can support 50 or 200 members.
Sponsorship and knowledge: Success is easier in MLM because the success of the member makes the success of his sponsor and all his upline, so many people are interested and help the new member to achieve his goals. Hence the famous adage “Independent but never alone”.
Human and personal development: Professional development cannot be achieved without integrating the personal aspect, this is also one of the aspects that makes MLM different, as it mainly focuses on the life of the entrepreneur giving him the tools to achieve financial freedom and have time to enjoy it.
A strong AND profitable product or service: The greatest successes in MLM are facilitated by the distribution of a product that has become a reference (Tupperware or Thermomix) or by the sale of services that are perfectly adapted to the target (IAD in real estate transactions, Viseeon in entrepreneurial support…).
Optimized work methods: Finally, the provision of tools and work methods guarantees a common quality of the products or services distributed, but also simplifies the life of the entrepreneurs working for the brand.
If we were to summarize, MLM is similar to franchises, but without entry fees, with a much stronger virality because the redistribution of income is global and not for the master franchise.
2 / IS IT APPLICABLE IN ALL COMPANIES?
Not all companies can, for various reasons:
- The product or service distributed does not allow it: You need a strong product / service, with a significant margin, which can stand out from the competition to guarantee your members a significant differentiation in the market;
- The profession does not allow all forms of exercise: The possibility of working in network marketing is often not possible for non “commercial” professions, so some regulated professions such as notaries or some medical professions can not;
- The financial barrier: A Network Marketing structure requires significant funds and must be able to quickly convey the image of a large group with differentiation tools for its members. This limits access to this form of deployment. The launch costs of the members are very low because the network head has made the investments for them (tools, communication, branding, lobbying, etc.).
3 / WHY DOES IT NOT EXIST YET EVERYWHERE? NETWORK MARKETING OR MLM
There are still several reasons for the “non-implementation” of this mode of practice:
- First some that I mentioned in the previous question. First, some of the reasons I mentioned in the previous question. Namely, the cost of launching or transforming into MLM, that the company does not allow it or that the product does not correspond to this mode of distribution;
- The other point is the lack of knowledge and the fact that we confuse pyramid marketing with network marketing, especially in Europe. Some companies have actually run large scale scams with pyramid models that may look like network marketing to the uninformed.
The question is therefore to know how to distinguish an MLM from a pyramid structure. We can see this with the help of 3 easily recognizable points | NETWORK MARKETING OR MLM :
- The compensation plan has no limits, each person who joins the organization receives compensation. This is mathematically impossible and therefore the last one in the chain is cheated. In MLM, there is always a limit to the compensation per level (rarely more than 5-6 levels).
- The head of the network gets paid for each entry (by selling one or more products to its members or by charging them a discount for a non-existent service. The money that circulates in the system belongs to the members, and the last one to enter gets the shaft. In MLM, it is the external customers who bring in the revenue. And the head of the network will only make money if the members are able to market the product or service.
- A pyramid scheme is focused on increasing the number of salespeople, not on increasing product sales, which is stated in the contract. The scheme of a pyramid structure is very light and confusing, network marketing involves many obligations of training, distribution, use of the brand … The MLM or network marketing is clearly a development model of the future that is growing more and more in Europe.
The configuration of this type of structure must necessarily be supported by professionals, the Viseeon network is able to accompany you as a member of an MLM as well as a network head (created or in creation).
Joel PEREIRA
CEO VISEEON INTERNACIONAL
joel.pereira@viseeon.com
