1 / What is MLM?
Multi-level marketing is a form of business development that gathers all the characteristics corresponding to people's needs, and acts in line with the 3 topics that are indispensable for everyone's professional well-being:
- Income that is compatible with the effort;
- Opportunity to project to a successful professional career;
- Acknowledgement of the work and results
A MLM business is a structure that markets a product or service through an autonomous commercial force similar to "outsourcing" offering you the best guarantees of success, through the provision of various services (communication, technologies, lobby, partnerships, economy of scale...) that is impossible to attain on one's own.
The world of work is experiencing an unprecedented change with the automation of tasks, the ever-growing wish to make the most of time, the search for independence and the emergence of "remote" work.
The wage model disappears and entrepreneurship explodes, Network Marketing is the way to combine all the advantages of wage work (benefits of a brand, strong products, team spirit, etc.) with the positive aspects of entrepreneurship (attractive income, work schedule freedom, etc.).
A successful MLM business must include the 7 following foundations:
- Entrepreneurship: Allows everyone to have the opportunity to increase their income according to their involvement and in a completely independent way, without any hierarchical bond.
- An appealing remuneration plan for financial freedom: There are 2 remuneration possibilities in the MLM, whether it is through one's own production (products or services sale), or through financial support provided to new members until they achieve success. One does not exist without the other, since it is, indeed, difficult to explain to others what to do, if your not doing it yourself.
- Scalability: Few companies are "scalable", but the MLM is by nature, since it's possible, with the same effort, to support 50 or 200 members
- Sponsorship and knowledge: Success is easier with MLM because the success of the member is also the success of the sponsor and of all his/her Up-Line. Indeed, many people care about the new member and help him/her reach his/her goals. Hence the famous adage "Independent, but never alone".
- Human and personal development: Professional development cannot be attained without the integration of the personal aspect; it is also one of the aspects that make MLM different, since it is mainly interested in the life of the businessman/businesswoman, giving him/her the necessary tools to achieve financial freedom and to have time to focus on him/her.
- A strong and profitable product or service: the greatest successes in MLM were achieved by the distribution of a product that has established itself as a reference (Tupperware or Thermomix) or by the provision of services that were perfectly adapted to the target (IAD in real estate transaction, Viseeon in businessman/businesswoman support ...)..
- Optimized work methods: Lastly, the provision of tools and work methods helps to ensure a common quality among the distributed products or services, but also to simplify the life of the businessmen/businesswomen who work for the brand.
If we had to summarize, MLM would be a similar approach to franchises, but without entry fees, and with a more viral tendency since the redistribution of incomes is global and not just for the master franchise.
2 / Is it applicable in all the companies?
Not all companies can, for several reasons:
- The distributed product or service does not allow it: It takes a strong product/service with a significant margin, that can stand out from the competition to guarantee a significant differentiation on the market to the members;
- The profession doesn't allow all forms of practice: The possibility to work in network marketing is often impossible for "non-commercial" professions, and, as a result, some regulated professions, such as notaries, or certain medical professions, don't allow it;
- The financial threshold: a network Marketing structure requires significant funding and you must be able to quickly transmit to the members the image of a large group with differentiation tools. This limits the access to this implementation form. The very low members launch costs are that low because the head of the network has made the investments for them (tools, communication, lobby, etc.).
3 / Why doesn't it exist everywhere yet?
Several reasons still explain the "non-implementation" of this method:
- First, some of them which I already mentioned in the previous question. Namely, the launch or transformation into MLM cost, whether the business doesn't allow it or whether the product doesn't correspond to this distribution model;
- The other point is the lack of knowledge, and the fact that we mistake Pyramid Marketing for Network Marketing, especially in Europe.
Some companies have indeed carried out large scale scheme with pyramid models that can be mistaken for network marketing by the uninformed eye.
The question is, therefore, how to distinguish a MLM from a Pyramid structure?
We can answer that with 3 easily recognisable points:
- The remuneration plan has no limits, each person that joins the organization receives an income. This is mathematically impossible and, as a result, the last of the chain is tricked. With MLM, there is always a payment limit depending on the level (rarely more than 5-6 levels).
- The head of the network receives a payment for each entry (selling one or more products to the members or making them pay an advance for a nonexistent service). The money that circulates within the system belongs to the members, and the last one to join is tricked. With MLM, the external clients bring in the revenue. The head of the network will only earn money if the members are able to sell the product or service.
- A pyramid scheme is focused on increasing the number of salespeople and not in increasing products sale, which is noticeable in the contract. The scheme of a pyramid structure is very light and confusing, whereas network marketing involves many obligations in terms of training, distribution, use of the brand... MLM, or network marketing, is clearly a development model of the future that is expanding more and more through Europe.
The configuration of this type of structure must necessarily be supported by professionals. The Viseeon network is able to support you, both as a MLM member, or as head of a network (created or in creation).
Why not imagine, in 2021, a new way to develop your structure integrating MLM?