How to Explain MLM Business to Someone Who Never Heard About It Before?

explain mlm businessWhen you try to explain MLM business principles to someone who never participated, or never dealt with it before, it’s easy to run into the old excuse of “this sounds like a pyramid scheme…”

However, if you know how to present it to the prospect, it’s usually relatively simple to overcome the objection.

Firstly, any business is, in essence, the same. It offers a product, which has to be bought, stored, shipped to customers, and promoted.

In a corporate business like apartment stores and major food or clothing retailers, this usually consists of an intricate web of management staff, storage, different branches, and lots of advertising on television, in magazines, and on popular websites.

In addition to that, any corporate business is built on a foundation of sustainability, and managed with the aim at constant growth – as far as the market will allow.

Secondly, while most pyramid schemes share some characteristics with network marketing, there is – when you try to explain MLM business principles – one fact that puts the WORLDS apart:

In legitimate MLM businesses, the products are worth their price, so there are people that buy them without worrying about the money making opportunity attached to it.

This is in stark contrast to pyramid schemes, where the product usually isn’t worth what you pay for it, and the whole business model is dependent on recruiting.

However, as you may explain, if MLM business becomes totally illegal, the MLM companies will still remain. All that will happen is that they will find other ways of distributing their products (through stores or via e-commerce websites), and they can still continue.

Lastly, explain MLM business concept as compared to corporate business:

In a chain of stores, you have branch managers, area managers, divisional managers, and then you have top management (CEO CFO, COO, and CMO). In multi level marketing, you also have people working on different levels in the distribution chain.

In a chain of stores, a lot of money is spent on marketing – and the same happens in MLM. In fact, in BOTH business models a specific amount of money is set aside for marketing and promotion. There is, however, one MASSIVE difference between corporate business and MLM business as explained:

In multi level marketing, the marketing staff members (people like you and me) are paid purely based on their performance. The marketing budget is spent purely on commissions, and not on salaries. If you don’t work, you make peanuts. If you work hard, you can make more money than your sponsor.

You will NEVER have that opportunity in a corporate business – because there are only so many management positions open that you can aim for. Many good people regularly leave the corporate business environment, or move on to other companies, because they have potential – but are overlooked, regardless of the reasons.

If you explain MLM business model this way, it should make sense to most people – except of course those people who don’t want to face the facts. Walk away from those people – believe me, you don’t want someone on your team who is going to fight with you every time you explain something they don’t understand.

  
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