Multilevel Marketing: a Legitimate Business Opportunity
Multilevel Marketing: A Legitimate Business Opportunity
Caleb Bowers
Belhaven University
BSM 392 – Business Research Methods
Professor: Dr. Parker
April 18, 2013
Abstract The following article has been written to provide information and further scholarship in which supports the hypothesis that a direct sales job with a multilevel marketing company is a legitimate job opportunity and can provide a viable business model for starting and maintaining one’s own personal business. This article addresses some of the common misconceptions that are often associated with multilevel marketing companies. Lastly the article provides a method and a process in which to recognize and identify a legitimate opportunity from an illegal pyramid scheme.
Introduction
While it is considered to be a form of Direct Selling it is often referred to by many different names: multilevel marketing (MLM), network marketing (NM), and network marketing direct selling organization (NMDS). It is commonly misunderstood and regardless of what it is called multilevel marketing is often a disparaged form of direct selling which can be more simply defined as a form of retail distribution in which the selling of it’s products or services is done face-to-face or person-to-person away from a fixed retail location (Albaum 1989). One of the misconceptions and most common allegations is that multilevel marketing companies may be illegal pyramid schemes and that such companies are unethical. This paper addresses the characteristics of multilevel marketing companies that are often criticized and misrepresented and presents an argument from an objective, non-biased perspective that multilevel marketing companies are in fact a legitimate, viable and ethical model of doing business. In order to do so, this paper presents the origins of multilevel marketing and a basic overview of the multilevel marketing industry. Secondly, it presents some of the issues and legalities that the industry faces.
Caleb Bowers
Belhaven University
BSM 392 – Business Research Methods
Professor: Dr. Parker
April 18, 2013
Abstract The following article has been written to provide information and further scholarship in which supports the hypothesis that a direct sales job with a multilevel marketing company is a legitimate job opportunity and can provide a viable business model for starting and maintaining one’s own personal business. This article addresses some of the common misconceptions that are often associated with multilevel marketing companies. Lastly the article provides a method and a process in which to recognize and identify a legitimate opportunity from an illegal pyramid scheme.
Introduction
While it is considered to be a form of Direct Selling it is often referred to by many different names: multilevel marketing (MLM), network marketing (NM), and network marketing direct selling organization (NMDS). It is commonly misunderstood and regardless of what it is called multilevel marketing is often a disparaged form of direct selling which can be more simply defined as a form of retail distribution in which the selling of it’s products or services is done face-to-face or person-to-person away from a fixed retail location (Albaum 1989). One of the misconceptions and most common allegations is that multilevel marketing companies may be illegal pyramid schemes and that such companies are unethical. This paper addresses the characteristics of multilevel marketing companies that are often criticized and misrepresented and presents an argument from an objective, non-biased perspective that multilevel marketing companies are in fact a legitimate, viable and ethical model of doing business. In order to do so, this paper presents the origins of multilevel marketing and a basic overview of the multilevel marketing industry. Secondly, it presents some of the issues and legalities that the industry faces.
References: Barkaes, C.B. (1997), “Multlevel Marketing and Antifraud Statutes: Legal Enterprises Pyramid Schemes?” Journal of the Academy of Marketing Science, 25 (2), 176-177. Biggart, N.W. (1990), Charismatic capitalism:Direct selling organizations in america, Chicago: University of Chicago Press. Dyer, W. Gibb (2001), “Network Marketing: An Effective Business Model for Family-Owned Businesses?” Family Business Review, 14(2), 97. Peterson, R.A, Albaum, G., & Ridgway, N.M. (1989). Consumers who buy from direct sales companies. Journal of Retailing, 65(2), Summer 1989. World Federation of Direct Selling Associations (2012) Multi-level Marketing, available at http://www.wfdsa.org (accessed April 12, 2013) World Federation of Direct Selling Associations (2011) Pyramid Selling, available at http://www.wfdsa.org (accessed April 12, 2013) Wortruba, T.R. (1990a). Full-time vs. part-time salespeople: a common on job satisfaction, performance, and turnover in direct selling