Similarities and Differences Between Small Business and MLM

A multi-level marketing distributorship typically is a small business run by a person, a couple, or a family. It can also be a larger distributorship run by a company with several employees. I have known distributorships to have revenues of several million dollars per year.

In a typical small business, a product is invented, manufactured, and or purchased, and can be sold to a customer or to another business. Similarly, a multi-level marketing distributorship purchases product or the product is purchased on behalf of a distributor from the company, then is sold to a customer. A distributor will recruit other distributors to sell the product, which is similar to finding other businesses to sell the product.

In a small business, you could have the product drop-shipped to your customer (which could be another business). Similarly, the typical multi-level marketing company allows the product to be sold from the MLM company directly to the consumer with the distributor getting the credit. Drop shipping typically allows a company of whichever kind to keep their inventories low or non-existent.

So we see that the typical small business and the typical MLM distributorship function in exactly the same way. They buy and sell products for a profit. They can sell to customers or other businesses. They can both keep their inventories low or they can stock to meet customer demand.

The main way MLM is different is that it earns commission on several levels of business to business sales, i.e. your downline or network. This gives you a great incentive to help out those you sponsor, those they sponsor, and sometimes those 10 levels below you. MLM is a helping business. Multi-level marketing is also the kind of business where you can build up income over time for a less than superhuman effort today. You leverage your efforts with independent business people rather than employees. The income you generate can take you through retirement and you can potentially leave it to your heirs.

Now a multi-level marketing distributorship is a business and it can get busy. Busyness is a good problem to have though.

Leave a Reply