Just 10 years ago, this article wouldn’t have been all that relevant. MLM was the top dog and the default choice if you wanted to start a Network Marketing business. But more recently, there has been a rise in the prominence of Top Tier Programs which the internet has played a part of. But which business model is right for you? First, let’s define the differences between MLM & Top Tier Programs.
MLM
MLM or Multi Level Marketing has been around for over 50 years and is still the most dominant form of Network Marketing (Avon did over $10 billion in sales in 2008 alone). MLM companies have some of the best products going around and have been at the forefront of many advances in their industries.
The products are marketed by distributors who get paid a commission based on the amount of product sold by themselves, and also by their downline (people who they have brought into the company as distributors). As the name suggests, you get paid a commission on multiple levels, up to 5 or 7 levels deep.
The products themselves are usually a physical product such as health and beauty products. While often more expensive (and often better) than their supermarket equivalents, they are still generally fairly low end, so the startup costs are lower than a Top Tier’s. However, the commissions are also a lot lower than a Top Tier Program. What this means is that while it may be cheaper to start up, it is going to take longer to generate a meaningful income.
MLM, even today, is mostly promoted offline through methods such as: approaching your warm market, cold calling, prospecting in public (such as at shopping centres and conferences), classified ads etc. The internet cannot be ignored by the MLM industry however, and online promotion is starting to become more important, with most companies now having websites for promotional purposes.
Top Tier Programs
Top Tier Programs are a relative newcomer to the Network Marketing industry. You could probably say that it is a cross between MLM and Direct Sales. The products are sold directly to the public and you get paid before the company does. You keep your commission and send the rest to the company. Some companies have a two up program, where new people have to pass up two “training sales” to the person that sponsored them before they can receive a commission.
The products are often digital products such as online training programs. They are generally focused on wealth and financial education as well as self development. Some companies also offer exotic overseas “wealth conferences” as a flagship product. The products are generally high end products (usually over $500), so the initial start up costs are higher. But because the products are more expensive, the commissions are higher. This means that you can generate a substantial income in a shorter amount of time.
Top Tier Programs are based around the internet more so than MLM. Offline methods are still used somewhat, but the prospects are always pointed towards a company website which informs them about the products and compensation plan etc.
In addition, many online methods can be and should be used to obtain prospects such as: Social Marketing (Facebook, Twitter, YouTube etc), Content Marketing (Articles, Forums, Blogging, Video etc) and Paid Marketing (Pay Per Click, Solo/Ezine/Banner Ads, List Builders etc). Unfortunately, a lot of the companies don’t teach people how to market online properly.
MLM vs Top Tier – Which Should You Choose?
Both models are proven to be successful for those that are prepared to work at them. So it really comes down to personal preference.
Do you have little money but lot’s of time to invest and don’t mind building your business long term before you see meaningful results? MLM might be for you.
Or do you have some capital to invest, prefer to promote your business through the internet and want to get something happening quickly? Then a Top Tier Program might be for you.
Some people are even involved with both models. They combine the long term residual income of MLM with the fast cash of a Top Tier Program. I wouldn’t recommend this for a biginner though, as it can be overwhelming enough with just the one business.
Either way, don’t fall into the trap of thinking that either of them is going to be easy. Just like any other business, its going to take hard work, the right information and dedication to build a successful business.
