Why There is No Longer a Market For Multi Level Marketing

In this article Im about to look discuss some of the unique features of multi level marketing (MLM) and then show you why majority of the participants are going to earn not more than a couple of hundred pounds per month. In some cases MLM does have some great products but it comes with some inherent flaws in the business model that are never realized by the participants in such programmes. But these very flaws are very cleverly used to benefit a certain section while most of the participants are only left dreaming of the millions. I am dividing this article in four sections to explain you the ironies of MLM. The business model of MLM, its flaws and causes of failure Advertising in MLM and its ROI Who are benefited from MLM? Is MLM even legal and moral or just another pyramid scheme?The basic business model of MLM, as you know, is to sell a product as much as possible to gain profits. It creates a never ending chain of small retailers. So the whole question is if a product can sell itself so easily, why should you have so many retailers? Why exactly do the people having resale rights to these products not keep it to themselves and distribute them to others for a fee? If they have a great product why do they shy away from ordinary shops and regular vendors? The straight answer is that the product itself is not highly profitable but the resell rights are and hence they are sold to the ambitious yet inexperienced new entrepreneurs! So their plan is not to sell the product itself but to sell the resell rights again and again to have as many retailers under you as possible. So the glaring flaw is that you have more retailers than consumers! So this trick is only going to devalue the product by overselling it.Consider a simple example. Suppose Gucci sells a certain type of sunglass 5000 pairs in a year. But still they keep increasing the production and when they reach 20000 in production, they would still be selling 5000 only. So would they do with the extra 15000? Unless they sell them at heavily discounted rates, they would carry the stock till next year and they would be almost worthless. Also the customer would realize that they can get the thing at a cheaper rate if they wait for sometime thereby making optimum launch sales obsolete. MLM ignores these obvious flaws in the system and hide them with their clever marketing ploys.Online promotion can be an expensive affaire when the competition is high in the given field. If you have any idea about keyword research then you would also realize that pay per click advertising can be effective but expensive. If you advertise an MLM business on Google and wish to get a high ranking on sponsored search, you need to pay anything from 1 to 3.00 per click. It is the cost of driving people to your website no matter if they sign up or not. Internet marketing is a pure number game; its all about the traffic your site receives! Suppose you drive 100 prospects to your website and 1 of them signs up for a fee of 100. So you would still be spending 150 to get that one prospect if we assume an average cost of 1.5 per click! So it is a loss making concern and can never be called a good business. Although there are other free methods like articles, videos, press releases and forum signatures, they can only give you limited success if you have an obsolete product and your seniors in the line have already used them for the same product.So who actually benefits from MLM? It has already been explained that the profit is not delivered by the product but by the exploitation of the affiliates lower down the order. Those who are higher up on the hierarchy make profits from the losses of those who register under them. They simply sell improbable dreams of earning millions overnight to the recruit the affiliates. Such MLM marketers have been imprisoned in the past, but nowadays their highly paid lawyers manage to save them from going behind the bars.So the question is can you do the same to your friends and families? Can you mesmerize people with impressive presentations in meetings held in upmarket hotels knowing that they are going to suffer losses to make you rich? Have you already sold such dreams to some people while you are yet to earn anything yourself? I would like you to decide yourself. Just compare MLM with the illegal pyramid schemes found all over the net. Arent they the same? To be honest, there is only one way to earn real money on the web. That is with a guaranteed compensation plan and continuous support to you subordinates and of course with a really desirable product or service.