There will be a convergence of two worlds, MLM and affiliate marketing. If you’re only in one world, you need to understand the other so you can get beyond the misconceptions and better compete.

Know that there are legitimate MLM (“network marketing”) companies. These differ from pyramids which are illegal.

When a firm pays new independent reps (or “networkers”) for sponsoring others into the program or mandates that new reps must each purchase a certain amount of product to receive the right to sponsor others into the opportunity, then the company can be vulnerable to pyramid challenges.

Most mainstream MLM companies do require the purchase of a start-up kit containing sales materials to become an approved independent rep.

To stay within legal parameters, MLM companies have extensive policies and procedures for their reps. In addition, they have compensation plans that, because of their tiered structures, have some complexities that have to be accurately explained.

Also, disclaimers and disclosures regarding the income opportunity and the products are needed.

That’s why mainstream MLM firms will have start-up kits whereby the reps are given information needed to help them operate their businesses within ethical and legal parameters. A manual is included along with brochures, business cards and other sales materials.

Note that reputable companies sell these kits at cost without any bonuses made to reps. This is done to avoid any possible legal challenges relating to monies being made purely for the act of recruiting.

From a marketing perspective, having a start-up kit also helps to screen reps from those who just impulsively sign up as opposed to those who show some real interest since there is this minimal purchase involved. (Many of the kits sell for $49 or less.)

MLM companies without start-up kits have a far greater number of people who sign up and never get active selling products as opposed to those mainstream firms that do require the purchase of a kit.

Affiliate marketers can relate to this. You know that since people can become affiliates for free, resulting in an overabundance of inactive affiliates in a given affiliate program.

Hence, how one enters an MLM program as opposed to an affiliate program differs. Agreements, along with the policies and procedures, are usually more stringent in the former.

If you participate in the upcoming convergence of MLM and affiliate marketing, you’ll want to utilize the best strategies and tactics to create a synergy between the two to expand your business.

This article serves as a start to a more vivid understanding of both worlds.

(This article is for informational purposes only and no legal advice is given as an experienced MLM attorney should be consulted for such matters.)

Debbi A. Ballard is a well known MLM consultant, expert witness, speaker and author who is educating people about the upcoming MLM and affiliate marketing convergence, and spearheading the development of MLM best practices at www.MLMconsultantsblog.com.

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