Great idea. If you need any help with questions let me know.
I have a fair amount of experience in the MLM industry, so I am sorry if this answer gets a bit long-winded. Back in the 1990s, I sunk over a million dollars into launching an MLM company. On its face, MLM seemed like a great idea: What better way to get your products out there than to financially motivate people to talk about them?
The company experienced exponential growth during the first couple of years, but once we committed to no proprietary blends, no fillers, and full therapeutic dosages, the MLM disappeared. The higher cost of fully dosed supplements did not leave enough of a margin to support the financial burden of MLM. MLM requires multiple tiers of paying downline commissions that can go as far as 4, 5, or even more levels deep. On the top, you have a parent company that needs to be constantly fed an army of new recruits to pyramid sales upstream while paying hefty commissions back downstream. Commission payout is expensive, so brands often make up for it by cutting product quality and using fillers and proprietary blends to under-dose ingredients and dilute products. For the same reason, brands that focus on BOGOs to drive their business cannot afford the cost of higher-end, fully dosed supplements.
So how does MLM differ from a traditional model of paying commissions to a sales team? The answer lies in a question that the DOJ has been examining for decades: Does MLM actually entail selling products or selling opportunity? The pitfall of many MLM companies is that they build a marketing strategy where the opportunity of the downline distributor to profit rather than the consumers’ use of the product solely drives consumer purchases. With this strategy, product quality and efficacy are not important, so the product becomes no more than a cheap vehicle with which to drive opportunity. When corporate culture and strategy are built around paying end users to purchase products rather than use them, something eventually has to give. Product quality and efficacy are usually the first to go.
These days, many brands have incorporated affiliate programs into their marketing strategies. There is nothing wrong with this. It is a great way to reward influencers and their most faithful. It differs from MLM because the commission opportunity does not overshadow the products. "