S1 Ep. 12 - MLM: Is it Legit?
November 15, 2022
Today’s conversation is all about Multi-Level Marketing (MLM) and it's legitimacy. Most people have been approached by a friend, family member and/or colleague to see if they would be open to a new opportunity. In this day and age with the impact of inflation, people are looking to create additional income streams. MLM or network marketing is an option if you’d like to generate income in sales without having to develop your own merchandise. However, please do your due diligence when choosing the right network marketing partner to avoid losing your time, effort and most importantly your hard-earned money. This episode will focus on multi-level marketing vs pyramid schemes. Now, let’s start today’s conversation!
Welcome to the True Talk Café Podcast Ep. 12 - MLM: Is it Legit?
What is multi-level marketing (MLM)? The term marketing (MLM) refers to a strategy used by some direct sales companies to sell products and services. MLM encourages existing members to promote and sell their offerings to other individuals and bring on new recruits into the business. Distributors are paid a percentage of their recruits' sales. New recruits become the distributor's network or downline and are, in turn, encouraged to make sales to earn money.
What is multi-level marketing (MLM)? The term marketing (MLM) refers to a strategy used by some direct sales companies to sell products and services. MLM encourages existing members to promote and sell their offerings to other individuals and bring on new recruits into the business. Distributors are paid a percentage of their recruits' sales. New recruits become the distributor's network or downline and are, in turn, encouraged to make sales to earn money.
Although it is legal, multilevel marketing is often controversial. One problem is pyramid schemes that use money from new recruits to pay people at the top rather than those who perform the work. These schemes (and the people behind them) take advantage of others by pretending to be engaged in legitimate multilevel or network marketing. You can spot pyramid schemes by their greater focus on recruitment than on product sales.
Show agenda:
- What is Multi-Level Marketing (MLM)?
- Guests Questions
- Though MLM has been likened to pyramid schemes, there are several vast and profitable MLM firms that assist individuals in establishing a profession and maximizing their earning potential. Can you tell us how you were introduced to the MLM model and how did you select your product/service that you wanted to sell?
- In every business model there are pros and cons. Can you tell me some of the advantages of the MLM business model? What are some of the Disadvantages?
- Many MLM schemes are legal, but there are also illegal operations that are run as pyramid schemes. This has cast some negative light on legitimate MLM businesses. How have you overcome the ‘scam’ factor in your recruiting process? Can you give us an example of overcoming objection(s)?
What Are Some Red Flags to Look Out for an Illegal MLM Pyramid Scheme?
- Make extraordinary claims of enormous earning potential
- Try to persuade people that recruiting others is where the real money lies
- Pressure people to get involved without learning more about the company
- Make it clear that an opportunity will be lost unless people get in immediately
- Seeing existing distributors who continue to buy products that they can never sell so that they can qualify for some kind of reward
- Guests:
- Shawna Atwell, Entrepreneur
- FB: https://www.facebook.com/Shawnaskissandmakeup
- IG: @Shawnaskissandmakeup
- Website: https://senegence.com/shawnaskissandmakeup
- Patrick Hu, RPSGT
- IG: @hUPAT77
- TikTok: patrickhu77
- Shawna Atwell, Entrepreneur
- Pod crew questions
- Renee
- Karla
- Lollie
- Anna
- Conclusion
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