MLM Frequently Asked Questions (FAQ)

Wow if there was ever an exciting industry to be involved in it is MLM or Network Marketing as it is commonly known. There is so much confusion and misunderstanding surrounding the industry that I thought it would be helpful to offer some basic FAQs for those prospects and newbie network marketers who are just dipping their little toe in the water and deciding whether this business is really going to be their future. After a total of 5 years in the industry with 2 different companies I have some good practical experience of the common concerns of the new prospect looking at MLM for the first time so here goes:

1)Q. Why do I need to pay to join the company when I will be working for it?

A. This is often heard from people who don’t understand the potential of network marketing. There are several answers to this as follows:

a) Firstly people don’t appreciate things that are free! The joining fee in my first company was quite low and because of this I found that many people who were not at all serious were attracted to join. In turn they would quit as soon as they realised that further investment would be required along the way. I prefer to work with a company that has an upfront moderate investment in exchange for good quality products and system. That way I know I am working with those who are looking for a business not a get rich quick scheme.

b) You generally pay only a very small enrollment fee to join the company which covers the administration costs and in the case of the company I work with, gives you a free 21st century back office to track your downline commissions, organisation and to run a paper free office.

c) You pay to receive the products and materials to actually run your business. In all large, successful network marketing companies there should be a strong emphasis on using the products. Consumable products offer very solid and long term passive income because of this. If you are serious about building the business you will need to feel conviction that your products are outstanding. The only way to do this is to use them and get results. You will also need products for marketing purposes and sampling.

d) This is not a job. Business people buy their own pencils! You must own your distributorship in order to own the passive income cheques that will follow if you do this right.

2)Q. Why are the products not sold in the shops if they are so good?

A. It’s ironic that so many products sold in shops are really not good at all!

They have a very high mark up and often a very low value to the customer. MLM products are generally much higher quality than shop products and the money is invested into the product and the distributor is highly rewarded because this is the most cost efficient methods of distribution out there. More and more smart companies are cutting out the middle man and using those massive savings to provide better quality products to the consumer. Look at Dell and the revolutionary way it is cleaning up in the computer industry. In modern MLM companies the product is delivered and sold by the company direct from the warehouse to the consumer. This is why Network Marketers can be so well paid.

3)Q. I read on google that this is a pyramid scheme….Is that true?

A. My best advice here would be to disregard anything you read on Google about opportunities unless you know it is from a credible source. 90% of what you read on Google is hype from competitors who are piggy backing on the wave of the growth of a certain company, by adding their own negative publicity spin so that they can advertise their own business whatever it may be. Evaluate your chosen company (I recommend you evaluate a good selection) and speak to the person who would be your sponsor to find out more. Review everything carefully including the company website. Pyramid schemes do exist but usually they are out of business as quickly as they appear because the industry is highly regulated today. Most good companies are members of the DSA and of course have had to pass all of the regulations and red tape of opening up in any country which is not simple to do.

Some ignorant people think that MLM is another word for a pyramid scheme. That is just lack of understanding of the industry and can be quickly overcome by those who can be bothered to study the facts. MLM is a 100 billion dollar industry operating in over 100 countries and it is growing every day, as more and more people seek to work from home!

4.)Q. How do I make money?

A) In very simple terms you make money by being the reason that product is shipped from the warehouse. In the old style companies this would involve stocking loads of products at home and having a retail shop. This is no longer necessary as the company can take care of all that for you and just send you a commission cheque on a monthly basis. Your job is to introduce distributors and customers who want to use the products. The bigger your organisation, the bigger your pay cheque!

There are many different compensation plans…some better than others. As a rule you want to join with a company that pays out early in the plan so you can get into profitability quickly, but that also offers long term passive income many levels deep, so that you can develop a ‘walkaway’ residual income down the line for when you are ready to step back and drink from a coconut!

5) Q. I’m not good in sales. How can I succeed in the business?

A. This is a very common misconception. The great MLM businesses are not focussed on sales. As long as there is no crippling monthly personal volumes to meet (check this out!) there is absolutely no need to focus on sales. The most successful people in the industry are those that develop teaching and training skills. Make sure you join with an upline who has a solid duplicative system so that you can train and build a huge organisation without spending all of your money on advertising.

In closing if you think you have the drive and the work ethic to run your own business from home then there are no limits to where you can go with the Network Marketing vehicle. Do your due diligence and don’t listen to what ‘they’ say.

ABOUT THE AUTHOR: Rachel Henke coaches people to work from home with a proven system and millionaire mentors. Find out how you can get the lifestyle you deserve and Escape The Rat Race at her website: To arrange a consultation with Rachel complete the call back section on the website or contact her via Skype: Rachelhenke