Upon starting or joining a business, anyone can have questions and doubts about the business like how it works, is it a legit business, how the income can be generated, etc. So it’s important for companies to make their prospects understand everything about the business and make everything clear first. It’s the same in the case of Network Marketing or Multi-Level Marketing business. That means, as an MLM company, you will have to answer and clear all the queries of new members when they join your network as a distributor or downline. For those who are planning to join the MLM business, here’s a list of the top MLM FAQs to help better understand the MLM industry and how it works.
1. What is MLM?
MLM stands for Multi-Level Marketing. It is a business model wherein the company products are sold directly to the end customers by the distributors of the company.
2. Who is a sponsor?
A sponsor is someone who recruits a member of the MLM business network. The recruited members will be added to the downline slots and the sponsor will be benefited out from them directly with commissions and bonuses.
3. Who are downlines and uplines?
In the genealogy tree of the MLM network, the members who are below a particular member are known as downlines and members who are top levels of this member are uplines.
4. What is an MLM compensation plan?
It is a scheme that an MLM company uses to define its structure, commissions, and bonuses. Distributors and members earn income and recruit others as per the compensation plan adopted by the company. In short, compensation is how everyone in the network is paid.
5. How many members can one sponsor recruit?
It depends on the compensation plan chosen by the company. Normally there are no limits and one can recruit an unlimited number of members as downlines. However, an MLM company can restrict the recruitments with a limit.
6. Is MLM business legal?
Yes, MLM business is a 100% legit business model. Although there is a common misconception that MLM business is illegal because of its Pyramid structure. Most of the business organizations in the world follow the pyramid structure. So It is not the structure, only the pyramid schemes are illegal.
7. What to focus – selling or recruitment?
The main focus of an MLM business must always be on product selling. Recruiting members is also important to the business in order to increase sales efforts. So, for stable business growth and more earnings, it’s better to keep a balance of both.
8. What kinds of products are sold in the MLM business?
There are various product categories that are sold in an MLM business. The major product categories are skincare, health & wellness, household, cosmetics & beauty, food & supplies, personal care, jewelry, etc.
9. What is the success rate of MLM business?
Just like any other business, the success rate of MLM business depends on your constant effort and time. If you really invest your time and effort, you can earn a good figure of income.
10. What are the criterias to join an MLM business?
It’s quite easy to join an MLM business. Generally, the process is as below:
- One needs to sign up and enroll in with a membership
- A membership fee has to be paid upon the initial registration
- To make the membership active, he/she has to make the first sale or purchase of a package (for free registration)
- Do KYC verification (depending on the rules of your country)
These criterias can vary from company to company.
11. Is it better than a conventional business?
Both the MLM business and other traditional businesses have their own risks and benefits. However, MLM is very easy to start, requires less investment, no need for a physical building, no need for inventory, or any employees compared to the traditional business models.
12. What is an MLM Software?
MLM Software is a tool that is used in today’s MLM and affiliate businesses to manage the network, compensation plan, and users in the network. It also calculates and manages payouts, commissions, and bonuses while providing MLM reports for the smooth running of the MLM business. An MLM company with the best MLM software will provide both the company and its members with better results and greater earnings.
Now that you have got a basic idea about MLM business and how it works, it’s better to understand that MLM business is just like any other business out there. It’s just that the way it works is different and unique from others. That’s the reason why people are more attracted to MLM business or network marketing business than other businesses. Just do your research about the MLM company, stay away from scams and you are good to begin your journey in the MLM business world.