MLM FAQ – Find Your Answers Here

This MLM FAQ page is just what you need to get you started if you are new to Network Marketing or trying to find out more about it.

When I was first introduced to MLM I had a ton of questions which I wanted answers to, so I hope this page provides everything you need to know for the short term.

Ten MLM FAQ – With Answers

MLM FAQ #1 - What exactly is MLM?

This is definitely the most common question asked by people when they first hear about this business model. To start from the top, MLM is Multi-Level Marketing, also known as Network Marketing.

In short, you have to be signed up to an MLM company which distributes a product or a variety of products. Being signed up to a company gives you the rights to distribute products such as vitamins, cosmetics or jewelry.

Being a member of a Network Marketing company gives you the opportunity to have access to their products at wholesale price, which means you can make a retail profit on the products you sell to consumers.

At the same time you may find that you use the products yourself – substituting what you would usually use from the supermarket for example, which is beneficial to your business.

Why? Because you are recognized for the number of products distributed under your name and in return, the MLM company you are with rewards you with a cash rebate.

The amount of money you earn will be determined by the amount of product distributed by you. So the more products you distribute under your business, the better it is for you.

It probably sounds quite difficult to reach the highest rebate levels, but it’s best to use the power of duplication to get you to your financial goals.

Duplication is the other side of MLM, remember, it’s all about networking with others in order to grow your business to a good, solid, sizeable team.

So, apart from selling products, you can also sponsor others into your team. By having others in your team means that you will also be recognized for the number of products they sell and consume too!

That's is the general overview of MLM. You sign up to a company, start consuming or distributing their products, sponsor others into your team who are also interested in the business model and earn cash rebates in return for the volume of product you and your entire team distributes.

If this isn’t enough for you, check out the ‘What is MLM’ section of this site.

MLM FAQ #2 - Is MLM Legal?

There is a lot of skepticism around Network Marketing and whether it is legal or not. In most parts of the world, yes, it is legal and there is no problem with it whatsoever.

However, there are certain countries or specific parts of countries who may not fully approve of MLM and allow it to be practiced.

So before you get involved in Network Marketing, it is important to ensure that before you sign up to any company, you don’t put yourself in a position where you will be violating any laws in the country or state in which you are residing.

You also need to be aware of any limitations your country has on distributing your products and sponsoring others into your team.

MLM FAQ #3 - Is MLM a pyramid scheme?

Absolutely not! When you first look at the business model which Network Marketing uses, it may appear to be a pyramid scheme, but actually it isn’t.

The model is based on duplication and works in conjunction with rebate level requirements and the specific compensation plan.

There is no ripping people off or fraud involved such as that found in pyramid schemes.

In order for an MLM company to be legitimate, it must exchange an actual product for money.

Check out this further information on MLM fraud and pyramid schemes so you can recognize one when you see it.

MLM FAQ #4 - How do you become successful with MLM?

Not everyone is successful with MLM, in fact, about 97% of people who join MLM fail. Why? Because they give up…and why is that? Because they weren’t given any proper training that teaches them effective techniques on HOW to actually succeed in this industry.

The most important concepts Network Marketers need to know are sales and marketing, but in addition to this you need to be able to apply these concepts with effective methods.

In order to sponsor a lot people into your business and also sell a lot of products, you need to position yourself as a leader and expert as opposed to annoying people who are not one bit interested in your opportunity.

To get yourself started on learning how to become effective at Network Marketing, visit the MLM recruiting part of this site.

MLM FAQ #5 - Which MLM company should I join?

If you are looking for information on Network Marketing, then it is either because you are looking at building a home based business on the side or you have been introduced to it by an acquaintance who is already with a company.

Before you join any company it is important to make sure you do your background research, otherwise you may be throwing your money away.

The vital points you should check off before committing to any company is to ensure they have been around for at least 8-10 years, because most new companies will fail before they reach the 3-5 year mark and you don’t want to get caught up in one of those ones.

You also need to look into the financial performance of the company you are interested in, it is important that they are showing continuous growth because it would be a shame if they had to reduce the cash rebate amount wouldn’t it?

These are just a couple of the areas you should do your due diligence in, but I strongly recommend looking at my MLM home business opportunity checklist which explains in great detail what you should look into.

If you are discouraged at trying to find a great company, then don’t worry, I have done some research for you on the top 10 MLM companies in the world along with their rankings.

MLM FAQ #6 - What costs are involved with MLM?

The costs associated with MLM will vary a lot between different companies. But in general, there will be a sign up fee which gives you rights to access products at wholesale price and distribute them, as well as being able to sponsor others into your team.

The registration fee may range from costing you nothing at all, as some companies do this, up to $200.

You will usually also receive a starter kit which includes some of the most popular products, so remember the fee is paying for those products too.

This means the annual renewal fee will tend to be a lot less, maybe less than $100 per annum. This is the set up I prefer, because you only have to pay a small fee once a year to stay in the company.

Why do I say that? Well, some companies may require you to buy a certain amount of product each month just so you can retain your membership, which isn’t the kind of pressure you need when trying to build a business.

Again, before you join any company find out the joining costs and any on-going costs if there are any.

MLM FAQ #7 - What products should I distribute?

The best products to distribute are consumable products. This is because you want to have a customer base that needs to reorder products from you on a monthly basis.

The main reason for this is that MLM companies will tend to pay you your cash rebate on a monthly basis too.

The best products are generally health and nutritional supplements. So try and find an ideal company that passes your due diligence which distributes this kind of product as a minimum.

MLM FAQ #8 - What kind of MLM pay plans are there?

There are actually many kinds of pay plans being used in Network Marketing. The pay plan that I like best is one which doesn’t limit the size of your business and the speed at which it can grow.

Most companies have different compensation plans, so it is crucial to find out how they reward their members including how they let you grow your business.

You may find that you can only sponsor a certain number of people into your direct down line (width) and that you can only have so many levels of people under you (depth).

I like to know that I can build my business as wide as I want and as deep as I want, without any limitations at all.

It’s probably a good idea to learn more about network marketing compensation plans if you are a little confused.

MLM FAQ #9 - Are there any personal requirements in MLM?

Because you are trying to build a business it is ideal to have discipline, commitment, time management and good communication.

These are all important if you want to progress in this industry. Leadership is also desired, but this will develop as your business grows.

In addition to this I strongly recommend learning the basics of a MLM marketing plan because it will give you a great advantage when trying to promote your opportunity and products.

This is a major area of knowledge that most Network Marketers lack. The up lines of new comers rarely provide education on sales and marketing which is a common reason why people don’t succeed.

MLM FAQ #10 - How long has MLM been around for

Network Marketing has been around for a very long time. Most people don’t realize this and come to believe that it has only been in action for no more than 20 years.

The history of Network Marketing Started in the 1940’s and its popularity has been growing ever since. There was a large, sharp growth during the 1970’s and early 80’s when the Federal Trade Commission officially recognized MLM to be a legitimate business model.

So, to sum things up, Network Marketing has been around for the best part of 60 years which shows how successful this type of business opportunity is.

MLM is becoming ever more popular with an estimated 12,000 people joining an MLM company daily, worldwide.

Return from MLM FAQ to Network Marketing Constultant