Offline Network Marketing was once something that people easily got success in; that was before there was a definite negative stigma about MLM. You still hear stories in magazines published in various MLM companies about how someone achieved the highest pin in the company in a dramatically short period of time, typically a year or less. That always nearly occurs in the economies of third world countries, such as China, India, Mexico, South Africa, etc.
Why do you think there’s such a difference between first-world countries such as Australia and USA, and third world countries such as China and Mexico? Is it because third-world countries still haven’t achieved matured economies; economic development is still progressing? Or is it because people in third-world countries see the opportunity as something with more value and work harder than people with “good” lives in first world countries? Is it a reflection of the quote “Sometimes the good things in life get in the way of the great things in life” often passed around MLM communities? Is it because everything thinks “It’s a pyramid!!” much the same way as they think about get-rich-quick schemes? Well, there are some truth in those explanations and more.
Network Marketing is essentially just a form of distributing products, a kind of “human franchising”. Instead of buying products from shops and stores, people buy products from people. If it just stays that way it’s just like running a business as a Sole Trader without the shop. But people nowadays are always skeptical; people don’t buy with logic, they buy with emotion and back it up with logic. Emotion changes the way people think about everything in the world.
The interaction between buyer and seller is much more personalized because there is no store or shop separating the two. Thus there is much more emotion involved, it’s face-to-face and that’s where it gets interesting. Instead of getting “profit” as a Sole Trader would, the distributor of the MLM gets “commission” to the outside world (or “retail profit” to the insiders). There are two sides to every story, and just the phrasing of the end result of a buy-sell transaction changes the opinions of people.
Outsiders, the buyers, think that the distributor gets “commission” because they still see them as employees working for a business, rather than being independent business owners. Essentially they are operating their own business (or franchise, per se) without any of the headaches of traditional small-business owners. Insiders, the sellers, believe that they receive “retail profit” because they do believe they are running a true business (as reinforced by the trainings and teachings of their upline).
Along with profit that distributors receive when they sell products, they also receive bonuses, overrides or royalties (depending on the terms used in their particular MLM) on the sales of the people the introduce into the business. This is especially hard to explain to prospects as they still think in their “employee” eyes, and this is where MLMs are confused with get-rich-quick schemes.
Essentially people in first-world countries forgot about the profit they get from selling products and only focus on the royalties they receive from their downlines, which is where the real “passive” income comes from. This changed the whole concept that network marketing was thought as; distributors only cared to promote their business opportunity to everyone they met.
After the effects of being hit by advertisements twenty-four seven and the modern lifestyle of instant gratification, distributors only cared about generating a massive downline in order to generate the large amounts of money that was promised in the opportunity meetings. Distributors, about 99% being ordinary people, lacking the money to use marketing techniques that traditional companies use, were forced to heavy-handed tactics involving prospecting anyone in a 3 foot radius, cold calling, and inviting your friends and family to “just a meeting”.
After a couple of decades of such techniques a negative stigma surrounded MLM, much the same way as one is cast around telemarketers and dodgy car-salesmen. Even the mention of the word “MLM” or “network marketing” caused people to shut their eyes and ears and attempt to get out of the room as quickly as possible.
Even so, stories of people involved in MLM in third-world countries rave of fast-tracked success despite the problem of the negative stigma attached to MLM. Why is that? Like what was described above, emotion cause people to view the same thing in different ways. People in third-world don’t care about the negative association with MLM, all they care about is getting out of the life that they are currently in. And this might mean the difference between an early death of starvation and life. Reportedly in Mexico prospects could not even afford the price of one product, and so instead they buy a portion of one product until they had enough income from selling products to buy the business license!
The problem with MLM in first-world countries is the stigma that surrounds it, and the complexity of a modern lifestyle in a striving economy. There are only two reasons why people stay with a MLM: a love of the product, or relationships with people who undertake the MLM. The main problem to even get success in MLM in a first-world country, or even achieve success faster in a third-world country is to generate enough leads that will convert to either distributors or customers.
The stigma of MLM prohibits promoting the business opportunity directly. Sure, you could do that but the result will be very little leads for any amount of effort. You can promote the product and after the prospect becomes either a lover of the product or builds strong relationships with people involved in the MLM, they might ask about the business opportunity. But promoting a product in a modern world filled with advertisements and competition everywhere you look is going to be tough for a single person. Yes, you might get help from your team members but in the end people are working for their own individual results.
A new solution arrives in the form of the internet. However hasn’t the internet been around for decades? Yes, but much like everyone else who uses the internet to promote their business, network marketers just increase the advertisements and sales pitches that the internet is already overflowing with. People turn a blind eye to advertisements or sales pitches on the internet much the same way as on television, radio, newspapers, magazines and all the posters on the walls.
Business in the modern world is about relationships. Relationships with the customers will make them trust you more easily and keep them coming back for more. There’s enough competition out there even different network marketing business opportunities for them to just take their business elsewhere. But how do you do that on the internet?
Get rid of all the sales pitches and paid advertising; put forth quality content that doesn’t even promote any products and people will start flocking to you. Who would someone rather do business with? The person who gave out good quality information for free, or the person who just puts out sales pitches or advertising like the rest of the competition. If you position yourself as an expert and build good relationships with potential prospects even before they become customers, they will trust you. When you do promote your business opportunity to them on the back-end after they’ve become customers, even with the negative stigma attached to MLM, they will have known you and trusted you long enough to consider it as a real option.