MLM or Network Marketing is still a mystery for most of the commoners out there! Most of them feel it is something fishy or not legal.

Well, that’s not the case! It’s a completely genuine business, but there are certainly some fishy companies out there in the market. If you make sure that each step you take is by careful means, then you can reap the maximum from the same.

This blog tries to list out some of the frequently asked questions (FAQs) and their answers regarding the direct selling business!


#1. What is Network Marketing?

Network marketing is a form of business system where the products or services manufactured are directly made available to the consumers. This makes sure that the third parties involved are bypassed.

The profits generated will be higher when compared to the normal procedure.

Also, the profits earned thus are distributed to the distributors and their teams in terms of bonuses and retail profits.


#2. What is Upline and Downline?

The term upline and downline depends on every single member in the network. For example, imagine yourself in the Genealogy tree. The persons coming above you position are called your upline and the ones coming below you are called your downline.


#3. Do i need to invest a lot of money to start an MLM Business?

No, you don’t have to. This is one of the major attractive features of the direct selling business. You don’t have to really invest a huge amount to own MLM business. You may only require to pay a very small amount to join under a network marketing company, which is called the registration fee.


#4. Is MLM Business legal?

Yes, it’s a purely legal business in many parts of the world like the United States, Canada, etc. Some countries have also banned this format of business, only because some companies were behind the Ponzi schemes.

In developed countries like the US, United Kingdom, Germany, etc. it has been clearly mentioned that the distributors should be focusing on selling products rather than being rewarded for just recruiting more people under their downline.


#5. What are the minimum requirements needed for joining an MLM Business?

There is no special qualifications needed to be an MLM business executive. But there are certain formalities to be followed to join a network marketing company, and they are discussed below:

  • One needs to pay a certain amount and enroll in a membership plan or purchase a package.
  • Should abide by the KYC norms of the company.


#6. How to know if an MLM Company is genuine or not?

The first thing to make sure is that your MLM company focuses on selling rather than recruiting more people. Also, you can do some research about the company, it’s previous track record, quality of products etc. Make sure the compensation plan followed by the company is not a Ponzi scheme.


#7. How many members can a sponsor recruit under him?

There is no actual limit in-case of the number of person that you a Sponsor can recruit under him. Once the number of recruits increases, so does your profits (in terms of bonuses and other additional benefits).

But still, certain MLM companies do restrict the number up to a fixed digit/level!


#8. What are the scope and possibilities of MLM Business?

The scope and possibilities of the network marketing business are immense. Even the business stalwarts like Donald Trump and Warren Buffett have talked in favor of the direct selling business multiple times, and even do own some MLM companies to their credit.


#9. How can i become successful in Network Marketing?

The basic thing to do is to select a well established Network Marketing Firm if you are planning to make it really big in the field. Make sure that their products are genuine, and compensation plan is advantageous for the distributors. Moreover, stay focused and work hard.


#10. Which MLM Company should i join?

There are a lot of genuine network marketing companies out there! Try going through various reviews over the internet or by other means and finalize the one that suits your needs and requirements. Some of the MLM companies that are worth mentioning include Modicare, Infinitus, Primerica, Hedger Tech, etc.Also, you can try searching the internet for the list of Top 100 MLM Companies.


Read more on: How to start MLM Business – Tips & Tricks for Guaranteed Success


#11. How does a Direct Selling Company rewards us?

Each Network Marketing company do have a well-structured compensation plan. The compensation plan chosen by your MLM company will decide the percentage of the amount that an independent business owner is eligible for the sales generated by them. Some of the commonly used compensation plans are Binary Plan, Matrix Plan, Unilevel Plan, Stair Step Plan, etc.


#12. How are the commissions paid to the distributors?

The commission for the sales generated by the distributors will be depending upon the compensation plan chosen by your MLM company. The bonuses and other benefits earned by the distributors will be credited to their respective wallet. From the wallet you can credit it your bank account anytime, but this withdrawal request should have to be approved by the Admin.


#13. Where and how do i recruit people on my team?

The best way to recruit people for your MLM business is to begin with the warm market. Then you can get into the world of possibilities, Internet!

Use the different social media platforms to the maximum, so that you can even recruit from an entirely geographical position of yours.


#14. Do i need to be an expert salesperson to be successful?

It’s not very much necessary to be an expert sales person to be a successful MLM business man. Knowing the simple sales techniques will definitely be helping you to recruit more people. But here the basics is to educate the customer about the quality and possibilities of your MLM products, so that the sales will be automatically generated!


#15. What are the major products sold through MLM Business?

To be precise, there is no crystal clear answer to this question! MLM companies usually sell products or services that have high consumer value. For instance, it could be healthcare and nutritional supplements, cosmetics, home care accessories, etc. Some companies even do sell legal services, telecom plans, energy services, and cryptocurrencies!


#16. Should i have to stock the products and deliver them?

In most of the MLM companies you don’t have to stock and deliver the products. When an order is made, the company will be handling out the deliveries. But some distributors also keep certain products to sell directly or provide as samples.


#17. Do i need to quit my full-time job?

No, there is no particular need for quitting your full-time job in order to venture out in the MLM sector. Almost 90 percent of the people who have become a success in the direct selling sector started out as part-timers. On average working hours of 7-10 hours is more than enough. Once, you find the flow and starts to earn more than your present salary, you can quit your job if you feel so!


#18. Do i need to pay taxes for the income generated from my MLM Business?

Yes, of course you will have to pay taxes for the income earned from your network marketing business. The MLM company will not be responsible for the taxes related to the income earned by the distributors. It will be entirely the duty of the distributors to file the taxes properly. Also, it varies from country to country.


#19. What is an MLM Software?

An MLM software is a perfect platform that enables you to perform all the tasks related to your network marketing business like commission calculation, report generation, analyzing the statistical data, overall monitoring, etc. with ease. Or, in other words, it helps to automate your entire MLM business process which was all done manually in the past!


#20. How to choose an MLM Software?

Choosing the best MLM software is a bit tricky. There is multiple network marketing software out there in the market. So it’s always better to check for reviews on the Internet. Also, you can try out the free MLM software demo version of the same and finally decide on one – Secure MLM Software Demo.



The above given are some of the most frequent questions (FAQs) on network marketing or MLM business.

Do go through them and comment below if you feel there are certain more additional questions to be in the above-given list!

Wish you all the best in your MLM career!