Ever hear a network marketer say “people word of mouth products all the time and never get paid for it”? The idea being if you tell your buddy about the great movie you saw and he goes to see it, the producers owe you a cut for your advertising efforts. Companies are getting free advertising from us all the time and we never see so much as a red cent. Oh the injustice!

But word of mouth marketing is such a powerful force precisely because the people doing the marketing are NOT getting paid to do so. We truly believe you when you say you loved that film because you have no ulterior motive for saying so. And therein lies the major flaw of the network marketing business model.

I know, I know. You really believe in your products and would recommend them even if you weren’t compensated. Me too. But since we are getting paid to recommend our products, there will always be a little bit of doubt in our prospects heads. Sorry, but that’s the truth.

Here’s the other major flaw of MLM: it’s very, very personal. There’s a good chance the person you are enthusiastically (and sincerely, of course) pitching your products to isn’t completely sure it’s legal. They may be worried that you’re getting yourself into a pyramid scheme. (A shockingly prevalent misperception even to this day.) Not a very fun or fruitful conversation to have.

Worse still, is the guilt purchase. They may be completely uninterested in your product, have absolutely no desire to buy it, and would tell you to take a hike if you were some peddler on the street. But, since refusing this particular peddler (a friend, co-worker or relative) would prove too awkward, they buy from you out of guilt. Now in addition to their buyer’s remorse they have a sneaking feeling you’ve exploited their relationship all in the name of a sale. I don’t know about you, but I like my business transactions to be guaranteed mutually beneficial. I like the motives of the seller and buyer to be completely transparent. And network marketing destroys this transparency.

That is, unless, you are marketing your business online.

When you’re marketing online all these nasty little problems disappear. Here’s why:

• Initial transactions are between two strangers with no prior relationship baggage
• The customer is part of a target market who is already educated and sold on the MLM business model
• The transactions are initiated by the customer who brings their own personal motives for buying; not ones manufactured by their friend of family member

Online marketing takes the backward, awkward, embarrassing and generally unprofessional network marketing business model and transforms it into a standard mutually beneficial business transaction.

The Internet has changed and continues to change the business world in ways that we can’t even comprehend yet. And as people become more educated about online business and see the potential for passive residual income offered by MLM, I predict the horrid industry success rate of 3% will improve dramatically within the near future.