1 / What is MLM?
Multi-level marketing is a form of business development that meets all the characteristics corresponding to today's needs, answering the 3 themes that everyone needs for their professional well-being:
- Compensation commensurate with your efforts;
- Projection opportunities for a successful professional career;
- Recognition for work and results
An MLM business is a structure that markets a product or service, through an outsourcing and autonomous commercial force, offering you the best guarantees of success, through the provision of various services (communication, technologies, lobbying, partnerships, economies of scale...) impossible to obtain alone.
The world of work is undergoing an unprecedented change with the automation of tasks, the increasingly important desire to make use of time, the search for independence, and the advent of "Remote" work.
The salaried model disappears and entrepreneurship explodes, Network Marketing is the way to combine all the advantages of salaried work (benefit of a brand, strong products, team spirit, etc.) with the positive points of entrepreneurship (attractive remuneration, freedom to organize work, etc.).
A successful MLM business necessarily incorporates the following 7 pillars:
- Entrepreneurship: It allows everyone the opportunity to increase their income according to their involvement and completely independently, without any hierarchical ties.
- An attractive compensation plan for a financial freedom: There are 2 possibilities of compensation in MLM, either for own production (selling products or services) or for supporting new members until success. One does not exist without the other, in fact it is difficult to explain to others how to do it, if you do not do it yourself.
- Scalability: Few companies are "scalable", MLM is by nature because with the same effort, you can support 50 or 200 members.
- Sponsorship and knowledge: Success is easier in MLM because the success of the member makes the success of his sponsor and his entire Up-Line, so that many people take an interest and help the new member to achieve his goals. Hence the famous adage "Independent, but never alone".
- Human and personal development: Professional development cannot be achieved without integrating the personal aspect, it's one of the aspects that make MLM also different, because it is mainly interested in the entrepreneur's life by giving him the tools to achieve financial freedom and have time to enjoy it.
- A strong AND profitable product or service: The greatest successes in MLM are facilitated by the distribution of a product which has established itself as a reference (Tupperware or Thermomix) or by the sale of services perfectly suited to the target (IAD in the real estate transaction, Viseeon in the support of the entrepreneur ...).
- Optimized working methods: Finally, the availability of tools and working methods makes it possible to guarantee a common quality in the distributed products or services, but also to simplify the life of the entrepreneurs who work for the brand.
If we had to summarize, MLM would approach franchises, but without entry fees, with a much stronger virality because the redistribution of revenues is global and not to the master franchise.
2 / Is it applicable in all companies?
Not all companies can, for various reasons:
- The product or service distributed does not allow it: You need a strong product / service with a significant margin, which can stand out from the competition to guarantee your members a significant differentiation in the market;
- The profession does not allow all forms of practice: The possibility to work in network marketing is often not possible for non-"commercial" professions, so certain regulated professions, such as notaries or certain medical professions, cannot;
- The financial barrier: A Network Marketing structure requires significant funds and must be able to quickly convey the image of a large group with differentiation tools to its members. This limits access to this form of deployment. The very low member launch costs are so because the network head has made the investments for them (tools, communication, branding, lobbying, etc.).
3 / Why isn't it everywhere yet?
Several reasons still explain the "non-implementation" of this mode of exercise:
- First some that I cited in the previous question. Namely, the cost of launching or transforming into MLM, whether the business does not allow it or the product does not correspond to this mode of distribution;
- The other point is the lack of knowledge and that we confuse Pyramid Marketing with Network Marketing, especially in Europe.
Some companies have actually carried out large-scale scams with pyramid models that may look like network marketing to the uninformed.
So, the question is how to distinguish an MLM from a Pyramid structure?
We can see this with 3 easily recognizable points:
- The compensation plan has no limits, each person who joins the organization receives a compensation. Which is mathematically impossible and therefore the last one in the chain gets cheated. In MLM, there is always a limit on pay per level (rarely more than 5-6 levels).
- The head of the network is remunerated for each entry (by selling one or more products to its members, or by making them pay a rebate for a non-existent service. The money circulating in the system is from the members, and the last one in gets cheated. In MLM, it is the external customers who bring in the revenue. And the network head will only make money if the members are able to market the product or service.
- A pyramid scheme is focused on increasing the number of sellers and not increasing the sale of products, which is noted in the contract. The scheme of a pyramid structure is very light and confusing, network marketing involves many obligations for training, distribution, use of the brand ... MLM or network marketing is clearly a development model of the future that is expanding more and more in Europe.
The setup of this type of structure must be supported by professionals, the Viseeon network is able to support you both as a member of an MLM and as a network head (created or being created).
Why not imagine in 2023 a new way to develop your structure by integrating MLM?
Joel PEREIRA
CEO VISEEON INTERNATIONAL
joel.pereira@viseeon.com
