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There is some stigma attached to the networking marketing business, especially those with multiple tiers, which can be characterized as pyramid schemes—that is, the salespeople in the top tier can make impressive amounts of money on commissions from the tiers below them.
The people on the lower tiers will earn much less. The company makes money by selling expensive starter kits to new recruits. The appeal of network marketing is that an individual with a lot of energy and good sales skills can create a profitable business with a modest investment. A good rule of thumb, according to the Federal Trade Commission FCC , is that single-tier network marketing operations tend to be more reputable than multi-tier schemes, in which people make money based on the number of distributors they recruit.
Some reputable examples of single-tier network marketing operations include Avon Products, Mary Kay, and Excel Communications. Anyone considering joining a network marketing operation should do their research before making a decision. Consider these questions:. While network and multi-level marketing programs have been accused of being pyramid schemes, there are some important differences. While those who are able to recruit more members into the program are often able to enjoy greater residual commissions, network marketing is a legitimate and legal business structure that offers real products and services sold to customers.
It is certainly possible, although not probable. Some people do enjoy great success at network marketing, largely due to their ability to recruit more members to the network. There are two main revenue sources: selling products, and commissions from sales made by team members downline.
The more people there are downline from you, the more money you will accrue - the larger the team you can recruit, the more money you can make. Most people who join legitimate network marketing programs make little or no money.
People may actually lose money. Some may become involved in an illegal pyramid scheme and not realize that they have joined a fraudulent venture, and can lose everything they invest.
Do your research and ask around before diving in. Amway consistently tops the list. Top-selling brands for Amway are Nutrilite vitamin, mineral and dietary supplements, Artistry skincare and color cosmetics, eSpring water treatment systems and XS energy drinks — all sold exclusively by independent Amway Business Owners.
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You'll only turn a profit if you sell most or all of the items that you buy for at least as much as you pay. Plus, the products from Amway aren't especially cheap RM As a distributor, you can receive monthly bonuses based on your sales volume — how many products and what types of products you sell. The BV is the figure would usually follow DP. This surely sounds great because you can earn some bonus income simply from sales — even if you haven't recruited anyone.
You could even get your bonuses fairly high in theory just by simply making enough sales. This is where most of the income potential comes. If you had a large successful team under you, then the amount earned as a performance bonus could be high.
For instance, you have 10 downlines and everyone, including you, bought a product worth RM each. Your team made 1, BV and the PV is Bear in mind that this structure is only effective if you can get a decent number of people under you and ensure that they're making sales - the idea is the more downlines you have, the more money you make.
So your PV then would be 2, This is because each of your direct downlines is entitled to a bonus. Basically, you just need everyone to spend RM a month to make that extra cash. Just take the example we gave earlier. If you want more money, you need your downlines to spend more. Yeah, your up-line may give some you motivational meth pep talk and believe that you can succeed in this MLM business, but in reality, they just need your money coming into the system in order for themselves to succeed.
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