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Pitfalls of Multi-level Marketing Systems

Oct 7th 2010 at 9:23 AM

If you haven't yet had any MLM experience, this article can helpĀ  you avoid some pitfalls.

Most all make-money-from-home systems work on one or other matrix, which needs to be filled in order to achieve profits.
What does that mean in simple terms?
You will have to find "customers or referrals", other people who want to use the same system to earn money working from home.

Now this is exactly where 95% of would be entrepreneurs fail.
It has been proven that most people can only refer 2 other people to any given program. It is important to know this fact before you sign up for any home-business program, since it determines your success or failure.

Unless you are a skilled marketer and already have built your own list of "customers" (people who trust you and follow your advice), you may have real trouble filling a matrix with more than two people on your first level.

Another very important factor to watch out for before signing up for a program is it's product/s, since that determines the lifespan of the program. e-books, for instance, aren't viable products. They have a very short life-span, are outdated very quickly.
Most of the time they are used to camouflage pyramid schemes and scams.
Good products can be used by almost any person, either for personal or business use.
To give an example : every business needs an auto-responder,
every online marketer needs hosting.
Good products can also be promoted easier, so your chances to find the
"customers/referrals" you need to fill a matrix are that much better.

You further have to know some specific terms in connection with matrixes.
In a forced matrix, for instance, new referrals automatically get placed downwards on each level. This means that if you are requested to refer two people, they are placed directly under you. If you refer more, they are placed under your two or under their two, but still are in your down-line. This is then called spill-over.

Though spill-over is a nice bonus to receive, you have to beware of relying on that. It may or may not happen. When you decide you want to earn money online, you have to take the responsibility for your own business. You cannot rely on other people to do the work for you. If you go into business with that attitude, you're set to fail right from the start.

Evaluating a home-business system before jumping on the wagon and spending money on it is the vitally important to ensure you have the best chance on success. The time spent on evaluating is time well spent.

Please to comment
Dec 3rd 2010 at 1:11 PM by drkelp
A very balanced and realistic article. Thx for sharing it with us.

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