Network Marketing (NM) also known as Multi Level Marketing (MLM) is about the most popular in the direct marketing and sales genre. It is commonly agreed to have started in the 1940s when it was adopted as a sales strategy by the California Vitamin Company that later became Nutralite. The company produces food supplement and does the distribution of its product using direct marketing.
Though originally, it was by an accident of occurrence that Nutralite discovered MLM as a viable marketing strategy when the company suddenly realized that it made more sales from people referring their family members and friends to the companys products and also engaging them as distributors to the company. Thereafter, a system of paying 2 percent sales bonus to the sponsors was introduced which subsequently led to the introduction of modern day pyramid selling.
In the early 1960s however, Richard Devos and Jay Van Andel who were both distributors in Nutralite broke away to start Amway which today is recognized as the world largest Multi level marketing business.
Presently there are countless companies who are using the network marketing business model to sell and compensate their network of members and ensure that the products are sold all over the world. Companies such as Avon, Tupperware, OrganoGold, Alliance in Motion Global (AIM GLOBAL), Electrolux, Discovery Toys, Oriflame, Herbal Life, and Kleenez are some of the prominent names around.

WHAT IS MULTILEVEL MARKETING?

It is a selling and compensation strategy that uses a network of distributors to sell and distribute a companys products and services with emphasis on direct purchases, purchases made by recruited distributors (down lines) and earnings from both the up lines (recruiters) sales activities and that of those directly or indirectly recruited by him.
MULTILEVEL MARKETING AND ITS BENEFITS
Every business its own attendant advantage and disadvantages, and it is important to diligently put all the cards on the table before venturing into such investment, however, one of the beautiful benefits presented by multilevel marketing is individuals choice, the liberty to chose whether to join or not after the pros and cons must have been taken into consideration.

ADVANTAGES OF MULTILEVEL MARKETING

1. Low-risk investment. Usually, the cost of initial investment required to join a multilevel marketing business is low compared to conventional brick and mortar businesses that may require thousands of Naira in start-up capital. In Nigeria, some MLM does not require huge investment and with as little as four thousand Nairas you can get the starter packs which in most cases are products. For example, OrganoGold, since most MLM companies promote products that you consume even if you dont sell at a profit in you can divert the product to personal uses.
2. Flexible Time. Multilevel marketing can be done while keeping your day-time job and in most cases you are not required to resume at a particular location. You can join a multilevel marketing located in thousands of miles away in as much as your product can be shipped to you and you have access to online platform for training and payment. Multilevel market businesses are so flexible that a single individual can join as many as he or she has capacity to join, however, the contract paper must be properly read for a non-compete clauses and other restrictions. It is essentially a part-time business but can be taken full-time or at spare-time depending on your time and what you would like to achieve.
3. Income Generation Capacity. Multilevel marketing enable you create residual income. One of the major appeals of multilevel marketing is the opportunity to make passive income having done some initial work in getting others to join your network and ensuring that you support them in building their own business.
4. Verifiable Product Quality. Multilevel marketing are seen largely as a relationship marketing that involve upline personal integrity and ability to convinced family, friends and personal acquaintance to buy a product based on your personal testimony, so a lot of care must be taken at ensuring that you enlist with a company whose products would pass the integrity test.
5. No employee to hire and no inventory to keep. Investment in multilevel marketing does not require that you hire personal staff, or rent a space and keep inventory simply these are done by the parents company and such support are extended to you free of charge or most likely built into the cost of the product. Today MLM companies operated an automated compensation and tracking system that enable manage relationship more effectively.
6. Leverage and Team-Work. Multilevel marketing is essentially a business based on relationship and the ability to take advantage of such relationship to promote one own business and work with others as a team. In the word of Wil Chirinos MLM is people business, business of appointment, business of helping consumers find what they have the needs for and the business of helping others create businesses.

DISADVANTAGES OF MULTILEVEL MARKETING

• Pyramid schemes and bad reputation. The colossal failure of Wonder Bank and the most recent case of MMM in Nigeria is a sharp reminder that all that glitters is not gold. It is important to state here that MLM is legitimate, is done within the ambit of the law and not left to fraudsters that build on peoples ignorant and lack of due diligent to create pyramid like system where people are recruited into the scheme or business without any legitimate business or product that they sell.
When asked to invest money in a multilevel marketing company without any line of product or services that they provide but given an assurance of return in a few months period please take to you heels that is most likely €“ 99.9% a pyramid scheme.
• Nobody build your business except you do. Investing money in multilevel marketing business without making effort at building your network is a recipe for failure. Multilevel marketing is not-invest and sit business it require a good amount of time and personal involvement.
• Doubt and misgiving based on past experiences. Naturally as human we fear losing or investment or taking risk more so when you are introducing a business without you having an office or a space where you can be contacted in person. Most MLM marketers dont have business names but join as individual which really the way it works but this has equally cast some doubt on the probability of inability to recoup ones investment in the case of business failure.
Having worked and invested in MLM companies, my advice is for you to carry out due diligence before joining any network marketing company especially in the online companies. Please note that getting information online about the company is not sufficient because anybody can craftily post information online and intelligently promote it overtime to gain acceptance yet it is fraudulent in nature.
The wisest thing to do is get referrers, speak with company already on the scheme, get product sample, do a check on the product acceptability, check on the reputation of the company and its founders and lastly cross check to know how they payout their compensation.

THE ADVENT OF DIRECT SALES COMPANIES IN NIGERIA

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