Why Multi-Level Marketing (MLM)?

Multi level marketing, or MLM, is a form of direct sales home business in which independent representatives sell products or services from a company to an end consumer. The multi-level aspect refers to each representative’s ability to recruit and train other representatives to start their own business and earn a commission on their representatives sales.

Income earned in MLM comes from the commission earned on personal sales, as well as a percentage of the sales earned by other reps recruited by you.

It’s simply a way businesses can use the power of word of Mouth for their Marketing. The commissions earn’t by representative is simply these companies marketing.

Is Multi-level Marketing a pyramid scheme?

No Multi-level Marketing is not a pyramid scheme! Because pyramid schemes are illegal. The vast majority of pyramid schemes rely on profiting from recruitment fees and seldom involve the sale of actual goods or services with intrinsic value. Multi-Level Marketing operations (MLMs) are similar in nature to pyramid schemes but differ in that they involve the sale of tangible goods.

However when most people ask if it’s a pyramid scheme they are actually asking is it a Network Marketing or Multilevel Marketing business.

Why would a business use the MLM Model?

Word of Mouth

Word of Mouth is one of the most if not the most powerful marketing methods. Here are a few reasons why:

  • 83% of consumers say they either completely or somewhat trust recommendations from family, colleagues, and friends about products and services – making these recommendations the highest ranked source for trustworthiness. [Nielsen]

  • 70% of people trust consumer reviews online. [HubSpot]

  • 74% of consumers identify word-of-mouth as a key influencer in their purchasing decision. [Ogilvy Cannes]

  • Consumers discuss specific brands casually 90x per week. [HubSpot]

  • Word-of-mouth has been shown to improve marketing effectiveness by up to 54%. [MarketShare]

For more statistics see this article by Ambassador.

Empowered Sales Force

Paying commissions to your best customers is not new but Network Marketing allows for all customers to earn commissions. The model allows for anyone with little start up costs to share a companies products and be remunerated for this. This allows for growth that simply wouldn’t have occurred via other marketing methods.

Empowering Women

Out of all participants, 74% of them are women, and the remaining 26% are men. The number of both men and women joining network marketing has increased over the year. It has empowered countless female entrepreneurs around the world.

Hierarchical Organisations

What most people don’t realise is that the traditional way of doing business is hierarchical and pyramid structure. Most large corporations are all set up this way. The renumeration for the vast majority is just a fixed salary rate set by the company. The CEO generally is paid the most and how much you get paid generally depends on what level of the organisation you are on. Hierarchical structures are set by business for many other reason other than just pay. It’s also a communication structure and an incentive structure for people to work harder and get promoted.

Source: www.forbes.com

With Multi-level Marketing you are rewarded for your own efforts and earn commission accordingly. You are generally not capped at what you can earn. And your earnings can certainly be greater than fixed salaries.

Why did dōTERRA choose Multilevel Marketing as its business Model?

dōTERRA chose this model, because of the power of Word of Mouth. dōTERRA products are so different to other essential oils that they command a higher price for their quality. If these products are put side by side on a retail self with cheaper oils, consumers do not know the doTERRA difference and the how powerful essential oils can be. Shop sales are often driven by price and position in the store.

Using Word of Mouth as their model, dōTERRA could get across their message much more effectively and safely.

It has proven a very wise decision as dōTERRA hit a Billion dollars in sales from 8 years of starting and is still seeing startling growth.

Why would you want to partner with dōTERRA as a Multi-level Marketing business?

  • Uncapped Earnings

  • Be Your Own Boss

  • Choose Your Own Hours

  • Choose who you work with

  • No Office politics

  • You can not be fired

Will dōTERRA Ever Sell in Shops?

No dōTERRA will never sell in shops. They will only sell via their distributers or Wellness Advocates. They are committed to this sales channel and are loyal to the growth this channel has given them. Wellness Advocates are permitted to sell in One off, shops, spas etc if all products sold this way are at the retail price.

dōTERRA is a member of the UK Direct Selling Association