Don’t be afraid of MLM, Part 1: What is MLM?

Have you ever recommended a product or service that you liked to a friend or family member? Of course, we all have. If that person acts on your recommendation and subsequently concurs with your opinion, it’s likely they will make the same recommendation to someone else. We know this action as word of mouth.

Let’s say the product/service you recommended was a landscaping company. You paid money for their services, as did the person to whom you recommended them. However, neither of you received any compensation for the referral, yet your word-of-mouth marketing has contributed to their bottom line.

From this scenario arises the question: What if you could get paid for every recommendation you made, as could the people who told you? The answer is: Yes, you could – through the enterprise of Multi Level Marketing, or MLM.

MLM, or Network Marketing as it’s now known, is a hierarchical marketing system in which the goal of a business owner is not only to sell a product/service, but also to recruit others to buy and sell that product/service as they do. The new business owner continues this cycle, which ideally occurs ad infinitum, since each owner receives a portion of the start up cost paid by his/her team members – as well as a share of their profits. Thus, the owner’s income grows exponentially with each new participant.

Network Marketing can change not only your financial status, but every other aspect of your life, in a very positive way. Just ask anyone who has succeeded in one of the many companies structured this way, including the one near and dear to my heart, SendOutCards. Many entrepreneurs have created successful lifestyles within companies such as Amway, Herbalife, Mary Kay and hundreds more.

In the case of SendOutCards, the company structured itself as MLM recognizing that this business model was the best way to grow a market that had been stagnant for many years. Mary Kay’s goal was to uplift women who, at the time of the company’s founding, may not have had as many avenues to real entrepreneurial success. The point is, MLM is not a dirty word, but a way of doing business that is bringing financial and educational opportunities to millions of people while effortlessly delivering products to purchasers who appreciate the ability to buy directly from the merchant.

Coming up in Part 2: A brief history of MLM.