10 Pros and Cons of Multi-Level Marketing

Pros

1. Proven model

Joining an MLM is similar to working with a franchise in a way.  The company already has an established product and business model.  There is a market for the products and services being offered, they just need more distribution.  All you have to do is show up with your money, network and desire to succeed.  This is very convenient for someone who does not want to come up with a business idea from scratch.

2. Low barrier to entry (costs/experience)

Another benefit of network marketing is that it has a low barrier to entry.  The cost to join is very affordable, making this a very attractive option for those with limited start up capital.  Also, many of these opportunities do not require any experience.  They have training programs designed to teach you the business from the ground up.

3. Support system

The key to network marketing is the network, so they focus on creating a very supportive environment.  Those in the industry are fully aware of the challenges that come with being an entrepreneur, especially in the multi-level marketing industry.  They have local meeting, regional meeting and even national conventions.  All in an effort to create that spirit of commraderie.

4. Passive Income

The multi-level marketing business model is set up for you to earn passive income and is probably one of the biggest selling points they use.  The goal is to get away from being an employee or self employed, because you only  make money when you work.  A true business allows you to make money even if you are not working, because you have people working for you.

5. Flexibility in terms of your schedule

The last benefit to multi-level marketing is the flexibility with your schedule.  These businesses are a great option for someone who also has a full-time job.  You can work evenings, on weekends and even from home.  There is no minimum or maximum and you can create a schedule that works best for you.

Cons

6. You don’t own it

While the company may give you the option to eventually own your book of business, you do not own the company.  Your name is not on it.  You have no control over the prices or the product line.  You have to run your business within the parameters set by the parent company.

7. Negative stigma

You also have this negative stigma associated with this industry.  While there are some bad apples, it not representative of the entire industry.  Yet the stigma exists due to pyramid schemes and the negative experiences people have had.  Unfortunately, bad news travels a lot faster than good news.  So this is something that you have to deal with when interacting with potential customers and recruits.

8. People business

Multi-level marketing is more of a people business.  Not people as customers, but people as a commodity when it comes to recruiting.  In order for you to truly succeed in network marketing, you have to focus on recruiting because selling the product alone will not make you rich.  As a recruiter, you become a people manager.  You are constantly looking for new people, hoping to find a superstar.  But until then, you are managing the one hit wonders and trying to keep them motivated.  So when you think about multi-level marketing, recruiting is a big part of it.

9. Old school marketing

The marketing methods used by many MLM companies are simply outdated.  They are still focus heavily on face to face interactions, when we have moved into the technology age.  They do not have a lot experience when it comes to social media and content marketing.  While building in-person relationships is important, it is also very limiting when it comes to your time.  You can only be in one place at one time and the lack of advancements limit your earning potential.

10. It’s harder to brand yourself

There are a lot of MLM superstars, but they are only superstars within their respective organizations.  Many of them don’t know how to extend their brand beyond the company.  I think that this is an issue for a few reasons.  One is the negative stigma that I mentioned before.  Network marketing companies don’t get the respect they deserve,  their expertise is not deemed as valuable.  They other reason is the lack of knowledge.  They don’t know how to brand themselves as experts and the MLM industry does not teach them how to do this.  Oftentimes, you spend your career focused on one company, without thinking about the other opportunities for expansion that are available.

Bonus

The pressure to achieve results

Most multi-level marketing organizations want to keep the new recruits motivated, so they are focused on helping you have quick wins.  This is often referred to as a “fast” track and is designed for you to experience success early on in your journey.  While this makes sense, the pressure does not stop there.  There are all types of incentives and contests that are designed to push you towards certain goals.  While being goal-oriented is a great thing, these goals are often short-term goals.  Every month, the company has a different promotion and you are always chasing the flavor of the month.  As a result, you can’t focus on a sales funnel that may have higher conversion rates, because they don’t garner immediate results.

Leave a Comment





Time limit is exhausted. Please reload CAPTCHA.