What you should know about: Multi level marketing

Network marketing software or Multi-level marketing (MLM), has been around for almost a century. It involves a company to help other independent companies to distribute their products to their consumers. One of the most successful MLM companies is Amway who is known for distributing health, beauty and home care products with multiple outlets branching out across the world. Amway is also rated as number one for the biggest direct selling marketers in the world, however they have been rumored to be using unethical practices that may chase away other independent businesses.

MLM was first founded by Carl Rehnborg who tried to create food supplements by studying in China for 10 years to learn how much nutrition an individual needs for their body to work properly. He then created health supplements based on his findings and handed them out to his friends to test, but found out they were not eating the supplements at all due to the products costing them nothing. After that, Carl Rehnborg decided to add a price on his supplements which motivated his friends to use them and asked Rehnborg to sell his products to their friends.This is where Carl Rehnborg had the idea of paying them commission for everytime they successfully made a sale. And thus, California Vitamin Corporation was borned and was later changed to Nutrilite when they became more successful. 

To get into MLM, one must learn how to attract the attention of their target audience to increase the awareness of their products by using social media to advertise their products, creating a referral program to provide bonuses for people who refer their product to their friends, creating a website for others to refer to and more. Businessmen can invest into MLM companies such as Tupperware, Amway and Avon to ensure their products are able to be distributed around more reliably and gaining profits with the help of these companies. However, some MLM companies exploit the naivety of some businessmen into investing in a more illegal method of MLM.

The most common misleading fact about MLM is that it is a pyramid scheme which is false and it is used by scammers to attract naive independent businesses. According to Randy Duermyr from The Balance Small Business, MLM must require three things to be considered legal, the quality of the product or service, income generated by the product or service and the MLM focuses mainly on sales instead of recruitment. MLM is also about making sales with your products or services, not through recruiting as many people as possible. Recently, a clothing MLM company called LulaRoe was sued for deceiving people by boasting how people can easily profit from working with LulaRoe. Consequently, they are required to pay USD 4.75 million to settle their lawsuit.

Overall, everyone is struggling to generate income during COVID-19 as lockdown further extends and continues to financially injure every business man and woman in the world. If you want to invest into something to generate income from the comfort of your home, make sure you know who you are dealing with and learn the terms and jargons to avoid facing difficulties later.

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