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MLM & Network Marketing FAQ
What is MLM Network Marketing?
Basically marketing strategies are composed of two main strategies
1. Single-level Marketing
2. Multi-level Marketing
Single-level marketing strategy is simple marketing strategy in which sale person is rewarded for selling the product only, and not for recruiting the other sale persons. While in multi-level marketing, the sale person is not only rewarded for the sale that he generates personally but also from the sale of others that he recruits and hence a chain of sale force is generated.
Further multi-level marketing includes the Network Marketing and Referral Marketing (ways to promote and sell his product to the new customers by oral communication). Mostly salespersons are expected to sell the product directly to the consumer through spoken words they relates the Multi-level marketing with the direct selling, although MLM is only one type of direct selling.
In start almost all companies were using the single-level marketing like Avon, Electrolux and Tupperware etc but with the passage of time as the business expanded globally, there were need of some more techniques to capture the market more effectively and hence MLM is one of the most effective technique that is used by these companies now-a-days. But MLM is the hottest issue of today’s business world with respect to its status.
The main contrast of view is consideration of MLM as a pyramid scheme that is totally a misconception. Then what is pyramid scheme? And why it relates to MLM? Basically pyramid scheme is an illegal, non-sustainable and risky business model that can cost a lot of people a lot of money. In a pyramid scheme, a member has to pay for joining and he is able to recover its money only by convincing other people to join up and to part with their money as well.
Actually in pyramid scheme there is no actual selling of any real product and that’ why it is considered an illegal activity. While in MLM, the actual product is in physical existence that is given to the distributors for sale not by recruiting process. Actually in multi-level marketing the investors or distributors make their money by selling the MLM products to other MLM distributors and if they are not already members of their MLM company then first sign them up, in this way the investors are in position to earn more money not only by their on sale but also get a handsome percentage of the income that is generated by those investors that have brought in MLM program due to their help.
Every MLM company has different compensation plans having different levels to motivate the investors.Hence, MLM provide the legal home based opportunity to the investors to earn a lot with negligible risk. So it makes the MLM quite different and legal from the pyramid scheme. Now-a-days, MLM approach is the common practice of all leading companies like XanGo, Usana, Team National, Neways and Xocai etc
Difference Between MLM and Network Marketing
The Multi-level Marketing (MLM) is a type of a marketing strategy wherein the sales force is compensated not just by the mere sale a representative makes, but also for the sales of the other representatives they have recruited. MLM can also be classified as a form of direct selling. Basically, in MLM, one can make money by selling their products and by recruiting other people to join the company. Though one can get a steady income simply by selling the product itself, a bigger income is generated when one gets to recruit new representatives to join the company.
Network Marketing on the other hand, is a type of a marketing strategy wherein a certain network marketing company distributes its products through its individual contractors. Network Marketing works like franchising where an individual has the right to sell the same product along with the company’s name and brand. Similarly, the individual is hired by the company to sell the product and in return, they get to have a profit by selling the same products to their very own customers. This means that Network Marketing can not only give the individual profits based on what was sold but can also let the individual build up his own sales team and create his very own list of members. With this, the individual gets to expand the business and gain from it from multiple resources.
Multi-level Marketing and Network Marketing only differs in such a way that in Network Marketing, you get to build your own team, which means you get to give them their own commission- a reasonable commission in this case. With this, if your seller gets a good commission from you, the better the chances of selling the product more and more. And if you sell more products, that means, more and bigger profit in the end.
Both Multi-level Marketing and Network Marketing need two things: Good sellers and good product. Both of these marketing strategies also mean two things: First, to able to sell the product and in return, get a profit out of it and second, get a bigger profit by recruiting other people to join your team or the company. Both marketing types generate a bigger income when you get to have more people to join you on board. Both must have a good product the individual must sell and must have a team consisting of good members working together for the same set of goals: get paid and get good commissions out of it.
In order for one to succeed in any of these marketing strategies, one should build a career path in front of him. Both need strong-willed, optimistic and very determined individuals. If an individual opts to join this kind of marketing strategy, one should look for individuals sharing the same set of principles, ideas and opinions in order to reach the end goal more easily. With that, new people will keep on joining your team, the company, and steadily, making the business very profitable.
Home business in Australia – where to start?
Home business in Australia is becoming more and more popular. From 266,000 people who worked from home full time in 1989, this increased to 980,000 in 2000. In the direct selling industry alone, there are about 500,000 independent salespersons today. Direct selling is one alternative, and one of the common ways, to having your own business. You can choose to simply work from home and earn income. If you’re thinking about having your own home business in Australia, where do you start?
Direct Selling As Your Home Business
A number of huge companies have been doing direct selling for decades, even for more than a century for a few. Direct selling is simply a method of selling your product to your customers. Think of it as bringing the store to them through your home business.
Most companies give their independent salespersons incentives or bonuses for recruiting people to become distributors like themselves. That’s on top of the commission they earn from the products they sell. This, then, is called multi-level marketing or MLM.
In Australia, over 4% of the labor force is involved in direct selling or MLM as their home business. 81% of this population is women. In the world, Australia shares more than $1.2 billion in the total national sales from the direct selling industry.
A reputable company
First of all, if you will be in the MLM industry, select a company that you would like your home business to represent. In Australia, there are almost 70 registered members in the Direct Selling Association Australia (DSAA). The DSAA is an organization that makes sure all its members adhere to their Code of Ethics to protect the consumers from pyramid schemes. Huge companies such as Avon, Amway, Herbalife, and more are members of DSAA.
From the DSAA statistics, complementary medicines and skin care products have a significant share in the industry. They generate 23% and 15%, respectively, in the direct selling market.
A start-up cost is simply the amount you will have to initially shell out for your home business. Do a little more research on whether the company requires you to have an inventory. This is usually overlooked by those antsy to jump into a business.
When your business is new, keep in mind that you may have additional expenses. Some MLM companies do not include product samples in their start-up cost, meaning you will have to buy them from the company.
As I’ve mentioned earlier, MLM companies give bonuses when you’re able to recruit people who will also become independent salespersons through their own home business. Although you will also earn income even if you do not recruit, getting leads is the secret to working smart and earning more in an MLM homebusiness.
This part may seem very challenging to many home business owners. Without the right tools and proper training, they usually find themselves on a dead end trying to get leads. But with the various internet marketing strategies, this shouldn’t be as difficult as people think.
Australia is one of the top 10 countries searching for “home business” and related keywords on Google, generating more than 300,000 searches every month. This may indicate that more people are looking for their own business, which would allow them to work from home. In other words, there is a demand for home business. These could be your leads.
What is Network Marketing Australia?
The most simple and detailed definition of Network Marketing is that it is a method of marketing where the company take the services of independent representatives, in order to reach their potential customers which is not possible though through general marketing strategies. So as it comes by its name that network marketing is a type of marketing, which is totally different from the traditional online and offline marketing strategies. Here the companies target the social network of every individual representative. Everyone keeps his or her own social network, a network of family, friends, colleagues and many others to whom we are in contact in any way. So the company focuses that social network of that representative.
In order to explain network marketing, the best example will be of insurance agents, they are the perfect example of Independent Representatives or Associates. Insurance companies recruit independent representatives to boost up their sales volume. The core motive for recruiting Independent Representatives is to touch those customers those can be convinced more effectively through a face to face demo by someone who they trust and know. Only those insurance agents make progress that have good influence over their social network and people in their social network, give importance what they say or explain.
In Network Marketing, a company recruits independent representatives but they are not the employees of that company, because they act as independent representative and own their own business. They are not bound by any work timing and limitations, but the targets are provided to them to qualify for the associated earnings.
The representatives are paid according to their performance, the more a representative is active, the more he or she is getting paid. In order to motivate their independent representatives, the companies offer different promotions for levels and each level has its own qualifications to meet, in order to be qualified for that level. Income varies from level to level. The higher level offers more income to Independent Representative.
In Network Marketing, the representatives have also the opportunity to build their business o the extent, they want. There are no limitations, the more expanded business a representative keeps, the more income he will be generating. A question arises here, that why a company is willing to share their profit with so many people. It’s obvious; the companies are touching the social networks of the representatives. And it’s much clear that a word of mouth marketing is much powerful than the traditional marketing tools. And the company is willing to pay the representatives for communicating their products to their network of friends and family. There are many Network Marketing Companies to join but one must be careful and do research before doing so. The wrong decision could waste allot of your time and money.
MLM leads in Australia – where are they?
Looking for MLM leads? Australia has increased in internet usage, number of people working from home, and even the population involved in MLM. Every month, searches about “leads”, “MLM”, and related keywords amount to millions. So what’s the fuzz all about? Such leads are often also refereed to as home business leads.
What is MLM?
Sometimes referred to as network marketing, MLM stands for multi-level marketing. Different from the simple buy-and-sell business, MLM lets its business owners earn from: 1. Selling products and 2. Selling the business opportunity. This is what you need your MLM leads for. Let’s talk more about that in a bit.
Selling the products
Products or services are the heart of an MLM company. Without these, you would just be selling memberships to your MLM leads, which would then classify you as a pyramid scam. If you’re selling “Planet Jupiter Real Estate”, that would be another scam. Australia takes pyramid schemes seriously and is illegal to offer or be involved in it. The products you sell must be of high quality and in demand.
In MLM, you earn commission or profit from the product sales you generate. So let’s say an MLM company gives you 12% commission on every product you sell. If their lipstick retails for $10, and you’re able to sell 200 of them, you receive $24.
Selling the business opportunity
If you’re simply selling the products of your MLM business, that’s really fine. However, bigger rewards start at selling the business opportunity. Throughout your business, you will encounter two types of customers – the kind who just wants your products and the kind who also wants to sell your products.
If you can successfully get the latter customer to sell your products, too, you can earn commission or bonuses from the sales that he or she makes. So, for example, your MLM company gives a 10% bonus for every sale that your recruit makes. If your recruit is able to sell 200 lipsticks, too, you receive a commission of $20 on top of the $24 you personally earned. Now, if you have recruited 10 people who each make a $200 sales, you now have a total of $224 earnings.
What are leads?
MLM leads are your prospective customers for your product or your business opportunity or both. They are basically the ones who will help your business succeed. When refereed to as: Australian MLM leads it refers to prospective customers located or living in Australia.
There are several ways to get MLM leads. Most of the time, first-timers in the industry get leads from within their circle. They present their business opportunities to family, relatives, and friends. More often than not, these leads are not really interested.
To succeed in getting MLM leads, you must have a specific target. For example, those visiting your website are already interested in what you have to offer. Instead of you going to them, let them come to you. Today, there are advanced tools, which will help you get more interested MLM leads.
Where are these leads?
With the internet technology making the world a smaller place, your MLM leads do not necessarily have to come from Australia. Every month, there are more than 300,000 searches about home business in Australia. More searches are made around the globe.
At present, more than 500,000 Australians are in the direct selling business, some of which use MLM strategies. This population is just a little over 4% of the current working labor force of the country. Still, tens of thousands of people in Australia’s workforce do not have a job. Can you imagine how many MLMleads those are?
MLM Australia – Why work from home?
To work or not to work from home. That is the question. Over time, it seems that more and more people in Australia choose the latter. Currently, almost a million have their own home business. 500,000 of them are in the direct selling industry, which also utilizes the MLM or multi-level marketing strategy.
So, why the huge number of Australians switching to work from home?
A cheap office, cheap marketing, fabulous impression
Work from home has minimum requirements. Phone, check. Internet connection, check. Computer, check. For just a few dollars every month, you already have your office. You can even be mobile, if you want to.
With everything online now, you cut down on overhead expenses. Getting a basic website does not cost a fortune with all the internet help you can get. You can use social networking sites as one of your marketing tools, which are actually free. Traditional flyers and print ads cost more yet not as effective as internet marketing strategies.
Choices – the more, the merrier
If you choose to work from home, you still have more options for the kind of job you want. The most common choice for home business is MLM. MLM is somewhat similar to having a franchise. You sign up with a company, pay the joining fee, and then operate your own business representing the MLM of your choice.
Bulk of the MLM operations can be done from home, depending on the company. The bottom line is you decide when to work and where to work. You can be working from Australia and get leads from Europe.
You can also choose to do some paid surveys. If you work smart, this can be your source of income. Otherwise, consider this work from home option for just extra cash.
Office related jobs are available online, too. You can work from home as a virtual assistant, a graphic designer, web designer, and more. The Franchise Council of Australia has about 150 home based business opportunities that you can choose from.
Not so risky investment
When you decide to have the traditional business as we know it, you risk letting go of hundreds of thousands to maybe more than a million dollars. All these for renting an office space, investment for your initial inventory, salary of employees, and fees for legal documents. On top of that, you have your monthly bills. Plus, nobody knows your name, so you still have several months to several years to work on that.
Most MLM companies’ start-up cost range from $10 to maybe about $500, depending on the kind of product or service they offer. I’m almost sure that if ever things do not work out for your home business, you’d rather just lose $500 than $1 million.
When you work from home, say with an MLM business, you invest on the name of the company you wish to represent. Most likely you already have your internet and computer at home. Now, instead of paying your internet bills for leisure, it becomes an investment, which means you can recover the cost.
For any MLM & Network Marketing related information in Australia visit www.mlmtopsandadvice.com.au