What Is Happening to MLM?

By: Gary E Layton

I have lots of people asking me what in the world is happening
to MLM? Well that’s a good question and deserves a thoughtful

Over the past two years a lot has happened to MLM on the
Internet. The most obvious thing is that the old MLM systems
are not working like they are supposed to. People are getting
smarter and can recognize hype for hype and owner oriented
profit schemes more easily.

People are not biting on the time worn scams so common on the
Internet these past few years. The old style of MLM, promising
fast and easy money just plain doesn’t work in today’s web
environment. Impossible claims for quick and easy results
with a fully automated system and with no work involved, just
do not cut it anymore. Why? Because systems of this type do
not work for anyone except the owners of the MLM in question,
that’s why.

Why don’t they work? Well to be successful in any MLM you must
work your tail off and learn how to properly advertise and
close your sales. Not only that, but you must actually recruit
people to a downline and train and motivate them to duplicate
your effort. Many people want to participate in MLM's but never
learn the basics of how to sell or close sales.

Then we come to compensation plans; most are front-loaded to
benefit those high up in the MLM downlines or matrices. Most
compensation systems do not really pay enough to properly
reward a person for building downlines. Let’s face it, under
the current rules being enforced by most of the regulatory
agencies, paying for recruiting people is considered to be
building a pryamid and that is a definite no-no. By law the
majority of income from MLM's must result from the sales of
products and services and not from recruiting people into
the program.

That does not mean that referral fees cannot be paid but such
fees should be more or less fixed at the level compensating
those who do the recruiting for the time and work involved.

Recruiting cannot be the main purpose of the MLM. Yes, downline
clubs may charge a membership fee and pay a referral fee for
new members brought into the program, but the main source of
earned income must come from the retail sales of products and

It seems everyone has a system to get magic results with little
or no work or time requirements. I wish it were so, but it just
plain does not work that way my friend.

If you do not know and understand what a good MLM should offer
you, it is time you took the time to find out. Let’s take a
minute and talk about that and see what we can come up with.

For example never join a pure downline club or buy a membership
in one until you know what products or services are offered by
the club for you to sell. Then determine if the compensation
plan offers a real percentage of retail sales as commissions
and not some cooked-up business volume system, which requires
reaching certain levels of production to qualify for commissions.
If the MLM requires you to purchase a product in order to be
authorized to sell it, make sure you can buy the product or
service at a discounted rate or at cost. Required purchases
for members must be, by law, not subject to commissions for
MLM upline or the company involved.

Don’t mistake these costs for subscription fees you may be
required to pay for access to a commission-paying program.
If such subscription fees are required make sure this is the
only cost required and that the company furnishes the necessary
seller web sites and other normal tools you may require to run
your business. There is nothing wrong with charging subscription
fees as long as each level of the MLM upline receives the same
amount as the Company. These subscription fees are considered
direct compensation or referral fees rewarding the Affiliate's
activities in building their sales organization. These fees do
not generate business volume for Affiliates nor are commissions
paid on them. They are a source of residual income but
commissions are paid only on the sales of products and services.

Always check out the Support Plan and System promised by each
MLM. Look at the Frequently Asked Questions (FAQ) Pages, which
are part of most MLM Home Web Sites. Do the questions asked
and the responses seem reasonable and make sense or are they
just plain old boilerplate responses which can relate to any

Check the response time by asking a question. See how long it
takes to get a response and what type of response do you get.

Look hard for a professional appearance in Web Sites and
promotional material. Bad spelling, bad grammar and math
mistakes are an indicator of non-professional or ’hurry-up’
type work and nine times out of ten such Web Sites indicate
a ’shaky’ proposition and should be avoided. Serious people
take the time to do things right and portray a professional
image. Remember that.

Does all this mean that all MLM's should be avoided? Of course
not. The MLM concept is still one of the best ideas ever
conceived for a home type business and if properly operated
can bring significant rewards to those who learn how to run

Yes there are some great MLM opportunities out there. Learn
to recognize them, but be prepared to work and spend time
and money to make them successful. No one gets something
for nothing in this world, especially in a business sense,
and we must always remember that.

Owning your own business is exciting and can be profitable, so
give yourself a chance and learn what you are getting yourself
into before you commit yourself. YesFree Articles, there are millions of
dollars to be made on the Internet and working MLM's are a
proven way to do it.

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