Editor’s Note: Multi-level marketing is a legitimate business strategy, while pyramid schemes are scams; this article does not encourage participation in any illegal activity.
The cannabis and cannabidiol (CBD) industry is far from being risk free. Many of the pitfalls associated with running a business still apply with added concern for evolving regulations. Needless to say, starting a cannabis business and ensuring consistent growth can be a tricky endeavor. How can you make things easier?
Let’s talk about multi-level marketing (MLM), a business strategy used by many direct sales companies to recruit new distributors.
In general, creating a business can be quite expensive due to various startup costs and ongoing expenses. For example, brick and mortar operations often require large investments up front and have high operational costs–not to mention staff payroll and monthly rent payments. A huge advantage with MLM, also known as network marketing, is that it’s less costly, since it avoids most of the expenses mentioned.
It would be an understatement to say that the CBD market is hot at the moment. As recent reports have shown, CBD revenue has grown rapidly within the last couple of years due to increased consumer demand all over the globe. MLM strategies are especially effective when you’re selling a quality product that’s all the rage.
The brick and mortar store used to be the crown jewel of any entrepreneur looking to start a business. With the advent of the tech age, the way consumers interact with businesses has changed massively, making things even more difficult for traditional stores. Today, CBD products can easily be purchased online from an endless number of retailers. MLM operations are highly flexible and can be run from anywhere as long as you have access to the internet and a phone. Flexibility is key in markets that are constantly evolving, such is the case with cannabis.
MLM is all about people. Without people willing to purchase your product, you are dead in the water. An ideal MLM strategy deeply connects with the needs of the customer and guides them to the product they are looking for. There are innumerable benefits to having solid connections with your customers, repeated business being one of them.
Since the costs associated with MLM strategies are lower than traditional business operations, there is greater potential for growth. Rather than being weighed down with business-related expenses, network marketing strategies have less limitations.
While here we’ve outlined the potential benefits of MLM, it’s very important to do your own research before diving in. There is a very thin line between MLM and pyramid schemes, which are scams. Protect yourself and your investment by looking out for any red flags. As the cannabis and CBD industry continues to move forward at lightening speed, it’s important to pause before making any big decisions that could cause any harm in the long run.