What is MLM and Network Marketing – An Overview of a Powerful Home Business Model

Have you heard of MLM or network marketing? MLM, or network marketing, can be a powerful home based business vehicle, but it is not generally well understood. It is fraught with misconception and an often tainted reputation on the part of the general public.

If you have heard of MLM or network marketing before, do you think of it in positive terms or do you have a negative perception of the industry? When you hear someone such as Donald Trump, or Robert Kiyosaki, or Jim Rohn suggest network marketing is a terrific home based business vehicle for the average person, what reaction do you have? Which side of the fence are you on and more importantly, why?

If you already participate in network marketing, do you sometimes feel embarrassed to admit it? What is it about your beliefs around network marketing that lead you to have these feelings?

In this article, you’re going to get the straight goods about MLM and network marketing as an industry, how it evolved, and where some of the misconceptions came from. That will allow you to put the feelings or perceptions you have about the network marketing industry into some context, from which you can assess whether or not your feelings and perceptions are valid

Modern MLM and Network Marketing

MLM and network marketing is huge. It is a +$100 billion dollar per year industry which offers an accessible way for the average person to launch a legitimate business with the potential of generating very substantial income. It affords you the opportunity to launch a business on a part-time basis, and grow that into a full-time (or more) income. And it requires the least amount of start-up capital and ongoing operating expense of virtually any legitimate business model.

Paul Zane Pilzer, a world renowned economist and college professor, goes so far as to predict that over 10 million new millionaires will be created through network marketing over the next 10 years.
If this is true, why on earth would you feel ashamed or embarrassed to be part of this industry?
Well, as I’ve already hinted, there’s a lot of history behind network marketing.

The Early History Of Network Marketing

Network Marketing as a means of product distribution – which is really all that it is – has been around literally forever.

You can go back through history and the establishment of trade routes and find examples of traders who distributed goods, food, and fur, face-to-face, on behalf of various backers. For example, the Voyageurs established fur trading routes and posts on behalf of the Hudson Bay Company. The Hudson Bay Company itself relied upon the influence of Prince Rupert, who was the cousin of King Charles II, to acquire the Royal Charter which, in May, 1670 granted the lands of the Hudson Bay watershed to “the Governor and Company of Adventurers of England trading into Hudson Bay.”

In New England, in the mid 1700’s, began the phenomenon of the Yankee Peddler, in which peddlers would travel in their cart home to home throughout the countryside, selling their wares.

From there evolved the concept of the door-to-door salesman. The Watkins Company was launched in 1868, selling a popular liniment. The late 1800s saw the spawning of new companies employing door-to-door salesmen to distribute bibles, books, spices, remedies, perfumes, tonics and the like. The California Perfume Company, which later became better known as Avon, was founded in the late 1800s.

The Fuller Brush Company debuted in the early 1900s and it was Alfred Fuller who is credited with transforming door-to-door direct selling into something different. Rather than positioning himself as a salesman who sold brushes and focusing on the features of the brushes, he instead focused his attention on selling the benefits of his brushes to the consumers.

The early 1900’s also saw the emergence of vacuum cleaner and encyclopedia companies such as Electrolux, World Book and Britannica.

The term “network marketing” specifically is 20th century creation.

It is out of this trend that the term “belly to belly” marketing – or warm market as you may better recognize it – was coined.

A company named California Vitamins came to the realization that many of their new sales recruits were in fact friends and family of their existing sales force. That led the company to recognize it was easier to build a sales force with a lot of people who sell a small amount of product, than it was to find a small number of top sellers who would move mountains of product.

And so California Vitamins designed a revolutionary sales compensation model encouraging their salespeople to invite new representatives from satisfied customers, most of whom were family and friends. This allowed the sales force to grow exponentially. The company rewarded its representatives for the sales produced by their entire group – or network – of sales representatives. And so multi-level marketing was born.

The original party plan was the Stanley Hostess Party Plan, by Stanley Home Products. The focus of the party plan was to demonstrate the myriad of uses and benefits of the products right in the home. Out of the original Stanley dealer roster came the founders of such future marketing program giants as Mary Kay and Tupperware.

The introduction of the multi-level, person-to-person sales program in the mid 1950s coincided with another pair of new giants arriving on the scene: Shaklee and Amway.

The Advent of MLM

The term multi-level marketing, or MLM, became a part of the industry lexicon. And the direct selling industry would never be the same.

The popular notion that MLM companies are illegal pyramid schemes really gained steam in the mid 1970s when the US Federal Trade Commission (FTC) charged that Amway and its multi-level marketing structure constituted an illegal pyramid.

Out of that court decision, the “Amway Safeguard Rule” set the legal standard for direct selling, multi-level, and network marketing based companies going forward.

The Myth of the MLM Pyramid

Amway and its multi-level structure were targeted by the FTC partly in response to a proliferation of pyramid programs in the 1970s. There was no underlying product or service. It was the emergence of several high profile schemes that led to a rash of regulatory requirements and the ultimate targeting of MLM as a structure. It also led to the clarification of speculative or fraudulent schemes and legitimate direct sales activities.

The Amway Safeguard Rule identifies three key points which ensure the validity of the opportunity. It was the existence of these three points as part of the Amway structure that led the court to conclude the business was not an illegal pyramid.

These therefore are important criteria with which to assess any network marketing or MLM opportunity and establish whether it is in fact legal as opposed to “one of those pyramid scams”.

Does the opportunity require the retail sale of products or services before one can qualify for any recruiting commissions or sales?

Does the opportunity have a mechanism in place to prevent the stockpiling of inventory of physical products with no intention of reselling?

Does the opportunity offer representatives who choose to leave a buy-back provision on unsold, unopened inventory or products?

The term “network marketing” became popular in the 1980s.

Ultimately, direct sales and multi-level marketing are distinct subsets within the overall network marketing industry. Multi-level marketing is where the profit or commission for a retail sale is shared with an up-line (or recruiter). Typically there are also bonuses paid based on recruiting activity, so long as the recruiting is accompanied with ongoing retail sales activity. In Direct sales, typically only one profit or commission for a sale is paid to one person, so there is no sharing of the profit with the up-line recruiter.

MLM and Network Marketing Gains Legitimacy

A number of very well known and respected authors and business people began to lend their public endorsement to the industry. People such as Brian Tracy, Robert Kiyosaki, Paul Zane Pilzer, Jim Rohn, and even Donald Trump began to openly talk about the merits of the industry and, in fact, encouraged people to consider it.

At the same time, network marketing has morphed into a proven, preferred method of product distribution by some of the largest companies on the planet. Corporations came to the conclusion that network marketing, as a distribution channel, offered many advantages, not the least of which is that it’s lower cost.

Commissions are only paid on the sale of product or services and the structure allows the companies to offload much of the time and training requirements onto its representatives, who are incented to train the new representative they recruit. So it’s a very cost effective method of distribution for a business to utilize.

In particular for new product launches, network marketing distribution allows companies to avoid costly traditional advertising campaigns.

Pretty soon telecommunications companies, travel companies, satellite providers, financial services companies, and many other industries joined the party. Today there are literally thousands upon thousands of network marketing based companies operating throughout the world.

Network Marketing MLM: Is it For You?

Now you have a much broader understanding of the MLM/network marketing industry and the history from which it has evolved.

Debt Settlement Tips – Legal Way To Never Pay Back Half Of Your Credit Card Debt – Part-2

All those who are suffering from credit card debts want relief in huge financial debts. If you know the debt settlement tips then you will get maximum relief. Debt settlement companies are available in the markets to help the debt suffering people but it is important for the people to have knowledge of the settlement process. If you have knowledge of the settlement methods then you will never hire the fraudulent settlement firms and can get maximum benefits from this method.

The Federal government has introduced the option of debt relief for those who have debt up to ten thousand dollars or more. By hiring a settlement firm, you can legally get up to sixty percent reduction and you never have to pay this reduced amount. The debt settlement tip for you is that do not pay the upfront fee to the negotiation firm because after the implementation of new laws, the settlement firms are not eligible to charge advance fee and if any firm demands for upfront fee then it means that it is not a genuine one and you must not hire it. All the reputed firms always follow the rules and they only demand for fee when the reduction deal is successfully completed. Once you hire a settlement firm, it will negotiate with your lender on your behalf and by eliminating the financial charges and other hidden charges, it will manage to get relief for you. Apart from this relief, these firms also convince your lender to provide you more time to pay the remaining dues with affordable monthly installment. Many people believe that they can negotiate with the lender by their own. It is true but another debt settlement tip for you is that do not negotiate with the lender on your own because you are a layman and there is a possibility that the lender may refuse to allow you reduction.

It is no more problematic for those who are suffering from unsecured debts because by following the debt settlement tips and the negotiation process, they can easily get reduction in their financial liabilities. It is better to adopt the debt settlement process rather than going for bankruptcy as you can legally get up to sixty percent reduction in the total debt by opting for this option.

Credit Card Consolidation Loans – Will Bad Credit Stop Me From Getting One?

Credit consolidation loans for those of us whose credit rating is poor are rare…very rare, hence the question asked in the title of this article.

It never used to be the case, but the decline of the economy over the past two years, due to the global fall out from the sub prime mortgage fiasco, has meant that lenders are reluctant to lend to anyone who doesn’t have a credit history cleaner than a cake of Howard Hughes’ soap, the job security of God and more collateral than Fort Knox (under the circumstances we had better scrap that one!)

Joking apart, the situation has never been bleaker for people looking to reduce their outgoings by means of consolidation, especially for those who have no collateral. It’s not all doom and gloom though; lenders are starting to be enticed by government bail out money and other ‘encouragements’, to open up their lending departments once again. However, they will need to employ a few cleaners (on short term contracts obviously) to wipe away the cobwebs and turn the calendars from 2007 to 2009!

The problem still remains though for those with no collateral, as the likelihood is that increased lending will be on the lenders terms, which, if I was in their shoes, would be the secured loan route initially. For those of you with collateral great news you may have a chance.

Those of you still here who are still waiting to read a glimmer of hope regarding applying for and gaining approval for a bad credit consolidation loans, I salute you. Your patience is outstanding.

My advice would be to give up on looking for an unsecured consolidation loan, for the time being anyway, and concentrate on managing the debt you have.

Debt management is what you need to look at and you can either get help from a non-profit professional debt management outfits like ‘Debt Relief USA’ or ‘Debt Free America’ or you can look to take care of business yourself, which is surprisingly easy and very fulfilling.

Stop worrying about your debt and take action to control it or it might just be around your neck for a lot longer than it needs to be, the time will come when you will be able to get that bad credit consolidation loan your looking for, but for the time being you should check out the sites at the end of this article for a little guidance.

The financial institutions are the ones who have gotten you and I into this mess and it is typical that they are very slow in acting to help us get out of it. They all know about the legal, moral and ethical methods of debt elimination that these sites talk about and how effective they are at eliminating debt, (so effective in fact that they work quicker than Donald Trump offloading Enron shares!) and they don’t like them, funnily enough.

Perhaps it’s the moral, legal and ethical part of these methods that the banks can’t stomach. We already know they struggle with the concept.

Proven Debt Relief Tips – Legally Never Pay Back Your Credit Card Debt

You might not be able to digest how not paying bills can help you with eliminating debt. Ironically it is quite true and can really boost your chances for being eligible for negotiation with the credit providers. To understand this concept better, here are some real time tips:

  1. These tips holds good if you satisfy other conditions for being eligible for debt bargain. If your total outstanding amount oversees the threshold value set by the administration you can consider yourself lucky.
  2. Few other conditions like your present credit score and your previous repayment statements are also important. To legally never payback your credit card debt, you should make sure that you satisfy these conditions. If your credit ratings are not so impressive and you have been paying the minimum bailout amount for the past few months, you stand a good chance for debt negotiation.
  3. Also, if you are not able to pay the bills for last few months, you can be confident of getting a handsome waiver over the total amount. If you pay the bills, your credits score might get a positive push and may give a wrong impression while the analysis.
  4. Being a victim of recession, you have all the rights in this world to claim for debt reconsideration. Your credit status clearly shows how bad your current economy is and how deeply you are struggling against your huge debt.
  5. To legally never pay back your credit card debt, you should properly analyze the total scenario. It is highly recommended to take advice from learned economists and take their assistance. You can also refer to the various websites that offer free tips; you just need to put your concerns and seek advice from them.
  6. Make a strong plan for showing your creditability so that the creditors get confidence in it. Make them believe that if the amount is reduced considerably, you will be able to repay it easily.

These tips can really see you sail through the problems of huge debts. However, before going further with settlement process, keep in mind to take a good look at the conditions that the programs imply. This is important since you might get trapped by some fake programs.