Luann Savage | Understanding The Basics Of The Multi-Level Marketing Business Model

Jeannine:  Well, that’s a very wise thing. Thank you for sharing that with us.

Luann:  You’re welcome.

Jeannine:  So then—just to reiterate then, to avoid running into some of these problems, you have to accept that this is a business. Like any other business, like any other entrepreneurial venture that you’re going to get into, you have to treat it as such. Even though there is—there might be some marketing that you are handed, there’s a lot of information provided to you, there might also be some systems and processes already in place.

Bottom line, you need to treat it like a business and work it like a business, and understand that it’s just like anything else – I’ve got to understand my product and services, and the benefits and values it’s going to bring to someone, and I need to understand the structure of the company so that—because part of the multi-level marketing is building your downline.

If I don’t understand and know how to properly explain the compensation plan to someone, then it’s not going to appeal to anybody, because they won’t understand how they can make money other than selling the product or service. Correct?

Luann:  Correct. You’ve got to do your homework before you get involved.

Jeannine:  Okay. So this is a lot of really good information, which I greatly appreciate you sharing with us today. So with all of your experience through the years in this type of business structure, what do you find to be—when you’re talking to people—the common misconceptions that they have regarding multi-level marketing businesses?

Luann:  Oh, one misconception is those who think MLMs are illegal, or call them scams or pyramid schemes. MLMs certainly are not illegal. They’ve been around for many years. And as for a pyramid, a pyramid scheme is illegal, because they recruit people at a heavy price, but there’s no products that are being sold.

A MLM is always about a product being sold. It’s just that the company chose direct selling as its way to bring the product to market instead of a brick and mortar store. They choose word of mouth recommendations instead of expensive buildings and expensive advertising. Network marketing is simply recommending.

We’ve been doing that all our lives with movies, restaurants, books, a whole bunch of stuff. But nobody’s ever offered to pay us for that. Some MLMs—some claim MLMs are “get rich quick” schemes. Well that certainly isn’t the case, because there’s dedicated work involved. You have to be willing to work beyond your comfort zone.

And then there are those who believe it’s too good to be true. People don’t see how something so inexpensive to get into can have so much promise. Some think the promising future would be in purchasing an expensive franchise. Franchises are, at the least, hundreds of thousands of dollars to get into.

These people believe that’s what it will take to make it big and be their own boss. However, that carries headaches of employees and paychecks, rent, utilities, plus the food or products that will be for sale. With an MLM, instead of paying hundreds of thousands of dollars to get started, you pay only hundreds, and you don’t have the headaches of the franchise.

You’re your own boss though, and in a way, you are looking for good employee types in the people that you bring into your downline. You’re looking for people who want to work the business with you, and you help them to win along with you. It happens all the time. MLM, or network marketing, is the best business model there is. It’s the only one that will still pay you years down the road for something you did correctly years earlier.

Jeannine:  Wow, that sounds really—it sounds like a really good model to consider getting into, if you do know that you have the dedication and that you want to be an entrepreneur as opposed to someone who would prefer to be in a cubicle, or somewhere else, where they’re working for someone. It sounds like a more structured first venture, if you will, if that is something that you want to get into.

Or maybe if you are heading towards retirement age and you don’t want to sit still doing nothing, maybe consider once you retire from your 30-year gig at whatever company you’ve been working at, maybe you should start looking into maybe a multi-level marketing company that speaks to you, and you can work on building that to have some income to add to your nest egg that you’ve saved.

Luann:  And now’s a good time to be doing that, while you are working in that cubicle for some big corporation. You’ve got a lot of people around you that you can talk to.

Jeannine:  That’s right. Exactly, yeah. Why not try your hand at it? And plus, I think getting into a multi-level marketing company, the expense, several hundred dollars, depending on the business, if you look at it, if I am a burgeoning entrepreneur, what better way to taste what life is going to be like doing that?

Because you can then apply anything that you have to do to work your business, whether it’s multi-level marketing or something, you opened up your own, a doctor, a dentist, a chiropractor, restauranteur, whatever it is, it’s all the same. It’s all the same hard work, and why not try with an MLM where you have some things already in place for you, and you’re not starting from ground zero to even see if that is a road that you want to consider taking.

Because I think, like you mentioned before, people think it’s a “get rich quick” scheme, or it’s too good to be true. And they think that on some ends “I don’t have to do any work,” because maybe that’s the way they envisioned it. But bottom line, it’s like any other business. It’s hard work and you’ve got to invest the time and the effort if you want to make anything out of it.

Jeannine Barcarse

Jeannine Barcarse is an entrepreneur, business owner, and author. She is an independent contributing reporter to Business Innovators Magazine & Show Host on Business Innovators Radio showcasing trusted leaders in business and entrepreneurship.