99% of all MLM and Network Marketing companies DO NOT manufacture their own products.

Think about all the MLM and Network Marketing opportunities you have seen or have somehow been involved. The origin of the product is usually hidden or its true origin are hidden from the distributors or affiliates promoting the products. The MLM company owners are the middle men. They either import, stock, and then distribute the product to their distributors who then pass it down the line or they buy from a master licensed distributor who themselves have set up the importing and distribution chain. Either way all of those transitional costs add up and have to be padded onto the final customers per unit price for the product. That's why most products from MLM or Network Marketing companies carry premium prices. They not only have to price in the commissions paid to the customer upline, the pricing also reflects the cost to manufacture, license, ship across the sea, truck to distribution center, then deliver to mlm company warehouse. This HIDDEN part of the MLM pricing model is usually 40% of the final consumer price. Now you know why it always seems that MLM and Network Marketing products are higher priced than off the shelf at your warehouse or grocery club store.

The best MLM commission payouts and ideal payout structures are the network marketing companies who own their own manufacturing plants. Think about it. NO MIDDLEMEN. If you can cut out the middleman (cost to manufacture, license, ship across the sea, truck to distribution center, then deliver to MLM company warehouse) then you can take that 40% cost and add it onto your MLM or Network Marketer's commission structure.

I know what your thinking. Why would a manufacturer sell their product directly through MLM or Network Marketing when there are more established distribution channels set up for channeling and retailing their goods? Good question!!
The old method of manufacturing to distribution is being ripped apart and turned on its head by the likes of Walmart and the other big box retailers. You can't get your product into those big box stores unless you agree to very thin profit margins. And any other bricks and mortar retailer falls prey to the elements of time and carrying costs.

Selling via normal distribution channels into retail adds the cost of the entire distribution chain, it also adds the element of time and inventory. And as any manufacturer or retailer will tell you time to retail and inventory carrying costs are enormous and extremely hard to predict in todays economy.
So why do most products that come into your home come via the grocery store or the big box warehouse? PRICE!! Today's consumer says "I want it cheaper or the same price as Wal Mart"!
So what do WE look for BEFORE we sign up for an MLM or Network Marketing offer?

1. Manufacturer to end customer "ONE STEP". NO distribution or middlemen.
Higher commissions all the way around. Higher quality product (no damage). Quicker New product to market cycle (beating the competition).

2. Are all the products consumable products? From webster's dictionary: "able or meant to be consumed, as by eating, drinking, or using."
If you have a good, high quality, low priced consumable your
distributors will make money hand over fist and your downline will grow LIKE WILDFIRE!! Especially if your retail prices are below the big box stores. Monthly residual orders are the holy grail of marketers!

3. Is the MLM or Network Marketing company new or established with hundreds of products?
If they are an established company with hundreds of products and have been around for 10 or more years then most likely they will be around for another 10 or 20 years.
If they are new, they have an 80% chance of being out of business in 2 years or less. Its a proven statistical fact that 80% of new companies fail in the first two years.

4. Probably one of the most important if not THE MOST IMPORTANT question to ask is how new is the MLM opportunity? That is a big determining factor in how easily you will be able to build a downline. The obvious opportunity would be to find a well established bricks and mortar manufacturer who is changing their business model or entering a new market via MLM or Network Marketing. But those are rare finds. If you see one and it meets all of the above criteria SIGN UP IMMEDIATELY!!! If it's a prelaunch EVEN BETTER!

Author's Bio: 

Vance is a very successful network marketing consultant with over 30 years experience in MLM and network marketing.
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