What is MLM programs and its red flags
Download as PPTX, PDF1 like539 views
The document explains multilevel marketing (MLM) programs, detailing their structure, potential risks, and key features, including the recruitment of new distributors and commissions based on sales. It highlights five red flags to consider before joining an MLM, such as unlimited recruitment and focus on selling to recruits rather than retail customers. Additionally, it discusses various compensation plans used in MLM, with examples of successful companies like Amway and Herbalife.
What is MLM programs and its red flags
- 1. WHAT IS MULTILEVEL MARKETING PROGRAM AND 5 RED FLAGS YOU KNOW BEFORE JOINING ANY MLM PROGRAM.
- 2. INTRODUCTION Since the rise of various MLM programs in last decade. Many persons (including me and my friends) believed it way to get success in less time and efforts. I would be honest that not every programs were failure nor every program was successful. But with my hard earned experience I have learned that person need to be very vigilant about program he/she is investing his/her money or will get their hands burn. “MLM” is a generic acronym for any type of multi-level or endless chain product distribution program. Multilevel Marketing, or MLM, is a system for selling goods or services through a network of distributors. MLM firms sell theirgoods not through a conventional distribution system and retail outlets, but through individual people, selling to their friends, acquaintances and strangers. Multi-level marketing program is a strategy some direct-sales companies use to encourage their existing distributors to recruit new distributors by paying the existing distributors a percentage of their recruits' sales. The recruits are the distributor's "downline." All distributors also make money through direct sales of products to customers. Amway is an example of a well-known direct-sales company that uses multi-level marketing. Before starting further I would like to put an Important disclaimer – Never Invest too much money in one single program which you would not able to payoff if that program fails. I have seen people lose their whole like saving in dream of becoming millionaires via these MLM program.
- 3. MLM MODEL
- 4. FIVE RED FLAGS Is unlimited recruitment allowed?: Each person recruited is empowered and given incentives to recruit other participants, who are empowered and motivated to recruit still other participants, etc. – in an endless chain of empowered and motivated recruiters recruiting recruiters without regard to market saturation. Distributors: Advancement in a hierarchy of multiple levels of “distributors” is achieved by recruitment, rather than by appointment. Business Opportunity: “Pay to play” requirements are met by ongoing “incentivized purchases,” with participants the primary buyers. Pay Overrides: The MLM company pays commissions and bonuses on more “distributor” levels than are functionally justified; i.e., more than five levels. Pay Plan: (in commissions, bonuses, etc.) per sale for the total of all upline participants together equals or exceeds that for the person selling the product – resulting in inadequate incentive to retail and excessive incentive to recruit.
- 5. MLM PHASES Attracting: Focused on attracting new members to join its MLM network with a clear marketing strategy and at the same time, built confidence and trust among members. Protecting: Created barriers to guard its members from sabotaging the company’s success, while allowing them to proper within MLM framework. Training: to enhance the knowledge & marketing capabilities of its team. Competing: contented for market share with other giant MLM networks. Simultaneously, introduced varieties of products in the MLM network with partnership with suppliers. Prospering: launched its own branded products as well as expanded its presence in different parts of the countries.
- 6. MLM SEVEN LAWS The First Person You Lead is Yourself: When you’re ready to lead, start with the person in the mirror. You Grow Your People, and They Grow the Network: Just like your own growth grows your business, the growth of the individual people on your team is what causes your network to grow. You Don’t Manage People – You Lead People and Manage Things: Manage the things: autoships, event attendance, volume, training, etc. But when it comes to your people – lead them. True Leaders Don’t Develop People’s Belief in the Leader — They Develop Belief in the Followers: Don’t sell your team on what a great leader you are. Sell them on their own ability to have more, do more, and become more. Build their belief in their own unique abilities to be great, and you will truly be a great leader. If You Ask Everyone to Lead — No One Does: You need the whole spectrum: leaders, followers, and product users. Let everyone self-select what category they want to belong to. Leaders Nurture and Celebrate the Success of their Followers: Recognize and celebrate the achievements of your team, and there will always be more to recognize and celebrate. The True Test of a Leader is Not How Many Followers You Have – It is How Many Leaders You Develop: Your real criteria should be never to do something for a team member that they are capable of doing themselves.
- 7. MLM FEATURES 1. Enrollment of distributors and customers 2. Building and maintaining the downline 3. Order placement 4. Payment methods 5. Commissions payment 6. Bonus calculation 7. Ability to assume distributors and customers identity for call center users 8. System and call center users administration 9. Money withdrawal 10. Replicated sites administration
- 8. MLM STAGES Risk Takers Confident & Extroverted Entrepreneurial Achievers Achievement Social Astuteness Presentable Confident Presentable Confident Friendly Enthusiasm Routine Follower Became a member Aspires to Achieve 50% Not yet on Achiever 25% Target Achiever 15% Like to buy the product, discount & expand network Like to succeed through promotional products & activities Achiever 7% Super Achiever 3% Successful Members: Director & Manager Successful Member: President
- 9. FIVE STEPS PROCESS OF MLM 1. Create Your Attitude a. Develop a positive attitude b. Beware of dream stealers c. Apply basic principles in your life 2. Write Your Values, Dreams and Goals a. Determine what is important to you b. Re-establish your values c. Define your dream 3. Gain the Basic Knowledge a. Know your products b. Know your company c. Know your compensation plan d. Know the industry 4. Understand Business Finance a. Understand accounting process b. Be realistic about money matters c. A dollar save is a dollar earned 5. Build Your Prospect List a. Who do you know Dream & Goals Values Daily Activity
- 10. MLM PLAN MLM (or) Multi-Level Marketing has always considered as one of the best sources of regular income. Despite any controversy, MLM still survives because of its eye-popping compensation plans. Modern Multi-Level Marketing Industry deploys various MLM Strategies and derives numerous compensations plans that can suit to the present economic policies. Each Plan has its own pro’s & con’s, Strength & weakness. Before getting into actual network marketing environment, it is essential to acquaint the current and varying trends in Multi-Level Marketing. For Multi-Level Marketing companies, choosing an MLM Software will be quite easy as they know about the current Network Marketing plans. But in the case of a beginner, it takes a lot of time to study and understand how each MLM Plan will work. Let's see the possibilities of most popular MLM Compensation Plans
- 11. BINARY PLAN Binary plan is the most widely used MLM compensation plans. It involves a bit of teamwork and endeavor. ★ Simplicity ★ Spillover ★ Unlimited depth ★ Volume Driven ★ More than onebusiness Center
- 12. MATRIX PLAN Asthe name indicates, Matrix plan concerns of a matrix-like structure of fixed no. of rows and columns. Matrix plan limits to a certain width. ★ Potential for spillover ★ Potential to have more than one sponsor ★ Downline grows faster ★ Distributors will remain motivated
- 13. UNILEVEL PLAN Unilevel MLM Plan allows you manage all downline in one single level. There is no width limit on the imposed. ★ Simple enough to explain to beginners ★ Easily customizable ★ Effortless integration of rewards and bonus
- 14. BOARD PLAN Board Plan is a unique system that makes your success certain and gives you an opportunity to make benefit from the effort of all the board members. ★ Auto splitting of Boards ★ Re-entry ★ Unlimited board income ★ Cross matrix
- 15. MONOLINE PLAN From the name itself we can understand the basic concept of this plan, it is all about pertaining about a same "mono"(single) line. ★ First come first serve methodology ★ Fast return ★ No limit or no mandatory level
- 16. GIFT PLAN Also known as Donation Plan or help plan. Gets benefit by Gifting or Donating to others. Simply this is a typo of “give and take” concept. Basic concept is to send gift to one member and receive multiple gifts from many other members ★ Give and take concept ★ Chance of Getting high return
- 17. GENERATION PLAN MLM Generation plan is concerning of a whole volume from upline to downline (this includes people with the same and different ranks). ★ Whole volume Calculated ★ Paid to many leveldepth
- 18. FOREVER LIVING PRODUCTS MLM PLAN Forever Living Products
- 19. CASE STUDY The top 3 MLM companies: Avon Products, Inc. founded in 1986. Avon has annual sales of $11.3 billion and over 6.5 million sales associates. Avon markets various beauty products, jewelry, and fashion apparel. Binary Plan is implemented for marketing the products. Amway founded in 1959. Amway has annual sales of $10.9 billion and over 3 million sales associates selling cosmetic, wellness and food and beverage products. Matrix Plan is implemented for marketing the products. Herbalife Ltd., founded in 1980. Herbalife has annual sales of $4.8 billion and has over 2.7 million sales associates. Products include cosmetics, personal care items and nutritional supplements. In 2016 Herbalife was cleared of allegations of having a fraudulent business model after an investigation by the FBI failed to find sufficient evidence. Binary Plan is implemented for marketing the products.
- 21. THANK YOU PLEASE SHARE YOUR THOUGHTS.