






                                                 
                            
                                          
                                                    
                                                    
                                                
                                         
                                           
           ULTIPLE  EVEL        ARKETING







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                           Some Thoughts on MLM...

Federal, state, and local governments do watch out for MLM operations that are
just variations on the chain letter principal.  Where those in at the begin-
ning win big and those who join later are destined to lose.  

However, reputable MLM companies  are simply using a different and more
efficient method to get their products and services to the consumer than
through the traditional retail chain.

For example, let's follow a product through the retail sales process:












                    Ŀ Ŀ
                     Factory($10) Ĵ Distributor($18) Ŀ
                      
                                                          
                    
                     Ŀ  Ŀ
                    Ĵ Wholesaler($30) Ĵ Retailer($45) Ŀ
                          
                                                              
                                                              
                                          
                                          
                                     Ŀ
                                      Consumer 
                                     

















A product that left the factory at $10 costs you and me $45 and the profit
from all that markup goes into the pockets of big businessmen.










An MLM company often makes the product themselves or buys it directly from the
company that does, so even if it has to buy the product, it ends up like this:

                               Ŀ
                                Factory($10) 
                               
                                      
                               Ŀ
                                MLM Co.($15) 
                               
                                      
                Ŀ
                 3-5 levels of Independent Distributors($22) 
                
                                      
                                      
                Ŀ
                 Distributor who actually makes the sale($28) 
                
                                      
                                 Ŀ
                                  Consumer             
                                 






The customer gets a better price, as well as better service - probably from a
personal friend or acquaintance, and the profit is shared by individuals (who 
each earn a few percent for having helped build the distribution network), not
by several corporations who each add 50-100% markup.

          Something said by J. Paul Getty forms the basis of network
          marketing: "I'd rather have 1% of 100 people than 100% of
          myself."  

This bases your success on the success of others. Instead of paying big bucks
for a franchise (basically just a proven business plan with shared PR),
individuals can get a good product and the positive support of their "upline"
(who are more familiar with the product, and stand to make a bit of profit
from each sale) and the company for a very minimal investment.

















                  Let's take a look at a few things to avoid:
















1.   Products/services you wouldn't buy for yourself.  You need to be sold on
     the product and believe it to be fairly priced before you can expect to
     sell it to others.

2.   Products/services that are not consumable.  Repeat sales or renewals are
     the key to profits...since you don't need to find a steady stream of new
     customers.

3.   Front end loading (pressure from the company or your sponsor to "invest"
     in large amounts of inventory right from the start.  Also known as
     'filling your basement', this may take the form of incentives to "buy in
     at a higher level" to rate some fancy title and higher commissions.  

     Companies that sell services are good in this respect, since you can't
     stock up on a service.  Services are usually supplied directly to the
     customer by the producer, too, so you won't need to worry about delivery.








4.   Companies that use high pressure or just seem shady.  Make sure you'll be
     comfortable dealing with both the company and your upline through what
     could and should be a long time to come.

5.   Companies that sell the sizzle, not the steak.  Don't be swayed by lines
     like "wouldn't you like to make $100,000 a month like I do?"  That's one
     of the early ones in, who just wants to add you to his downline.

6.   Marketing plans that *require* you continue to recruit new members--or
     fill unreasonably high personal sales quotas--to continue earning.  The
     law requires that earnings can only be made from actual sales and it is
     reasonable for the company to expect you to move some product in return
     for your over-ride, but high quotas benefit only the company, since you
     are punished if you don't constantly sell, Sell, SELL. 

MICRONEWS

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