Posted by: The Soaring Eagle | June 26, 2012

Making Money Online – MLM


 

This is the third article in our discussion of the different approaches to making online money. Please read the first article before reading any other article in the series. It sets the right stage for what comes next.

  • 2. MLM

Multilevel Marketing (MLM) is based on an existing business model, which has been around for quite some time, even before the proliferation of the web and e-commerce. The basic idea is to build a matrix. There are different types of matrices, but they all share a common concept: When you refer a new member to an online program (business), that new member is placed “under” you (not physically, of course :-). When that member refers another member, that second member is placed under the first member, which you had hired.

Since you’re on top of the matrix, you receive a percentage of any commission earned by either one of the two members. That is the simplest matrix. It’s called a linear matrix. It could grow whenever new members join, to a certain number of layers. For example, if it was a 10-layer deep matrix, you would share the commissions of nine people under yourself, in addition to your  own commissions.

Another type is called the binary matrix. As the name implies, this matrix has two branches: Right and left. The first member you sponsor (or bring in to the business as an affiliate), sits on the right of left branch. The second sits on the other branch. Each one of the two would have his/her own two branches under him/her, and so on. This MLM tree type resembles binary trees data structures, used by several programming languages. Again, there has to be a limit to the number of branches, or the depth of the matrix.

MLM requires marketing/sales skills. No matter how much the sales pages tell you that everything would be “done for you”, when the rubber hits the road, you’ve got to promote or sell something, in order to build your own matrix, your own commission structure.

For people who don’t like marketing, or lack the necessary skills, this money-making approach is not exactly for them.

I’ve mentioned this in the first article, and I’m going to repeat it again here: Making money online is not much different from making money off-line. The reach could be farther, the information could be easier to gather, but the basic skills are the same. If you’re a good marketer off-line, once you learn how to find your way around the web, you would be a good online marketer. As simple as that.

Before delving into any MLM scheme, any type of matrix, ask yourself: Is MLM for me? If the answer was yes, then you would ask: Do I know how to market and sell products, services, memberships, fish in the ocean, etc… Based on your answer, you may decide what your next step would be.

So how does it work? The first step is to join an online “program”. Depending on the age of the program, you would be put in the next empty spot on the matrix, or a matrix. Your first task is to build your own matrix, regardless of where you had started. You need to bring people in, and place them under you, so that you maximize your income, by having those people work partially for you. But you still need to market and sell the products and/or services of the program. Your marketing skills, your negotiation and convincing skills, are called for to sell the  program to new members, as well as selling the products and services of that program (in order to gain your own commissions).

How would you market/sell? That’s what we covered in the second article on “online advertisement”. It takes using banners, referral links, email campaigns, etc. The banners have to be placed strategically, so they would attract online traffic, and hence visitors. Once the visitors convert, you’ve got yourself a sale (or a new member, if you were still hunting for new affiliates to fill up your matrix). Please refer to that article for full details.

The main advantage here is the potential of recruiting an army of sellers, who share with you the fruits of their own sweat, just because you’d brought them into the program (not very fair, in my opinion).

The downside is the complexity of the model: The matrix, the pay structure, the selling of ideas and products, the management and motivation of remote team members, and the necessity to do all of that online, and sometimes, via conference calls.

The above covers key concepts of this huge subject. To get the full scoop, you  must research. And please, don’t  join “any” MLM program. Find something that can show and prove a track record of stability, fairness and success. Another key aspect you need to make sure of is whether the program pays its members on time or not. Or whether it pays at all!

Any comment, addition, or question are very welcome. You may use the form below. Your information, as always, is kept strictly confidential.

Till the next post, stay safe, do your homework, and only join the best programs (if you’re convinced that MLM is for you).

The field is full of programs. You have the chance to shop for the right program for you. Take your time. Email or call the program’s administrator. Ask questions. Use search engines to find as much information as possible about the program you intend to join. If you sent an email, and no one replied within 48 hours, move to the next program on your list. Responsiveness is the first indicator of a good or bad program.

All the Best!

The Wealth Maker

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