Did your friend invite you to look at one of those pyramid deals?

MLM stands for Multi-level Marketing (also known as Network Marketing). Much like a franchise business model, independent business owners operate their business by selling products or services and building an organization of business owners who do the same. In a legal MLM business, commissions and bonuses are paid when a product or service is sold.

There are tremendous benefits to business ownership in the MLM model when compared with a more traditional business model.

  1. No inventory is required. A typical business requires inventory. However, with the MLM business model, the company holds the inventory in warehouses and thus holds the risk of buying and tracking product inventory.
  2. No product shipping. The MLM company ships the order out from their warehouse once your customer places an order.
  3. No website development. Typically the MLM company will develop a website that you can use to sell products. When orders are placed, the company handles the transaction for you.
  4. No merchant account. Processing money is a risky and time-consuming endeavor. Even the most experienced business owners can run into big problems related to credit and debit card processing. With the MLM business model, the company takes care of the processing for you.
  5. Your income is not limited. You can choose to earn zero dollars or you can choose to build your business to whatever size income you desire. There are no inherent limits on the income you can earn. This is not to say everyone will get rich, only that your income does not fall under the typical confines of an hourly wage.
  6. No employees (or very few employees). When you build a successful MLM business you hire employees to make your life easier, not because the business demands you to hire more people. I know leaders who do hundreds of millions a year in sales with zero employees.
  7. Your business does not necessarily limit you to living in a particular geographic location.
  8. Starting an MLM business doesn’t cost much money. Typically you can get started with an MLM company for a couple hundred dollars and that usually includes some products to try out. Compared to other businesses and professions, MLM is very inexpensive to get started.
  9. Demand is growing for many MLM products. MLM companies have a reputation for high prices, but typically the high prices are associated with high-quality products (there are some exceptions). High-quality products get high prices in return. Personally, I would rather sell a high-quality/high-value product to a small niche market than a commodity product to the masses.
  10. Happy customers buy again, creating ongoing income. Some call it a residual income and I’m fine with that, but residual income doesn’t really mean walk away and completely forget about your business while the money rolls in. Yes, I know people who are basically retired because of MLM (me! lol), but I still put a few hours a week into my MLM business.

MLM is not a perfect business. Newsflash: there is no such thing. But the benefits of an MLM business far outweigh the negatives. You can choose to build your business like an MLM ding-a-ling or you can choose to build your business like a professional entrepreneur. Some people will judge you for looking to better you and your family’s life by launching your own independent MLM business. In the end you have to make choices that are best for you and your family.

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