MLM (multi-level marketing) programs allow participants to sell a product line directly to consumers and earn commissions on sales made by the people they recruit to join their network. These programs also offer incentives like money, products and travel. However, MLMs aren't right for everyone. Many people who sign up end up disappointed when their earnings don't match their expectations. Unless you really enjoy the specific product line you're selling and are eager to make it your full-time career, consider another side hustle that offers a more stable income.
Before joining an MLM program, read the paperwork carefully and discuss it with a trusted friend or advisor who is not affiliated with the company. Ask them to review the company's business plan, disclosure documents and contracts you may need to sign. They should be able to tell you whether the company is legitimate and whether it can back up claims of high earnings with real data.
If you decide to start an MLM, the most common way to make a profit is by recruiting people to sell the product alongside you, known as your down line. However, you must be aware that the failure rate for MLM distributors is high and that you're putting others at financial risk by asking them to invest in your business.
To protect yourself, never pitch an MLM business to friends and family. Instead, focus on finding commonalities and building a relationship of trust with prospective members. This approach will prevent you from alienating them with your skepticism and pushy sales tactics.
Once you've built a relationship of Preferred Herbalife member trust, ask the member what made them choose your business and why they feel so passionate about it. Use their answers as a framework for your sales pitches. If you're unsure about what to say, listen to your mentors for advice.
Most MLMs have a compensation plan that pays out commission based on the number of people in your down line and the total amount of sales. It's important to understand how this works before you join one, as some of them are actually pyramid schemes.
When choosing a compensation plan, look at the payout ratio and how it compares to other MLMs in your industry. Also, ask how the plan is structured and what percentage of sales goes to new and existing members.
In addition to commissions, some MLMs also pay out bonuses based on certain achievements. These can be anything from reaching certain sales thresholds to attending a special event or achieving a specific ranking in the business. This type of bonus can be helpful in motivating distributors to reach their goals and is a great way to reward top performers.
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