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What do Barry Switzer (Head coach of Dallas Cowboys), Dion Sanders (All-Pro defensive back for Dallas Cowboys), Jim Miles (Secretary of State of South Carolina), and M.C. Hammer (pop singer) all have in common? It's not just that they are athletes, politicians, and rock stars. But it is that all of them belong to one of the world's fastest trends in business, multilevel marketing (MLM). Today, many physicians are experiencing a decrease in income, having to change their life styles, divest themselves of their expensive toys such as boats, vacation homes and luxury cares and some are even closing their practices and moving to rural communities or areas less penetrated by managed care medicine.

As a result, large numbers of physicians are entering the MLM boom that is taking over the business world. This article will review the concept of MLM and discuss three physicians successful experience with this popular method of supplementing their income.

What is MLM and how does it work?
MLM is a distribution system for goods and services. It is a market place that provides goods and services without TV advertising, storefronts, inventory, and middle men. It has the power to render the conventional retail world obsolete just like managed care is doing to the solo physician. The concept has taken off thanks to the modern technology of the computerized record keeping and telecommunications along with the ability of the distributors to network with their friends, family, and others.

You start by becoming a distributor of some products or services such as vitamins, long-distance service, or household products. Through your professional and social contact, you then educate and trains others to be distributors as well. That earns you the right to a small commission, usually 5%, on a portion of their sales.

For example, if one distributor recruits just six others to distribute hisher products or services. If these six first level distributors recruits in turn six more, there are now 36 people at the second level. Now if each of the second level recruits does the same thing there are 216 at the third level, then 1296 at the fourth level and so on. All of these recruits are in the first distributors group and heshe gets a portion of the commission that is generated by the sales of all of those distributors. In this example, you can see the power of geometric growth of your MLM network. Now you can leverage your time and your effort through motivating other associates to be successful. Now if they are successful, you are also successful. Consequently, you have a vested interest in making them successful as well.

This concept has been particularly attractive to professionals such as physicians. Physicians are an example of a non-leveraged business-highly paid, in a fee for service environment for our skills and our time. However, we generate income only when we work. When we are on vacation, at a meeting, or sick, we continue to have expenses without any income. MLM is an opportunity to generate large incomes, six and even seven figures, passively or in a residual fashion. MLM is the near perfect opportunity to leverage your time: no rent, no collections, no employees, no receivables, no inventory, no liability, and plenty of residual income.

According to Dr. Dennis Ochipinti, an otolaryngologist in New Orleans, who is a distributor for Excel a company that provides long distance telephone services at 30-50% discount from the standard rates offered by ATT, Sprint and MCI, says "that the rewards of MLM are exactly equal to your effort. It is an opportunity where you can rise to your full potential. If you work, there is no ceiling on your income like there is when we trade the hours for dollars method of income from a medical practice."

Dr. Stuart Menn, a pulmonologist and sleep disorder specialist in the San Diego area, was attracted to MLM as an opportunity of leaving the economic concerns out of medicine. He was clearly motivated by the opportunity of developing an income outside of his medical practice.

How successful has this been for Dr. Menn who began his MLM career in 1972 with Amway? After two years, working 6-10 hours a week, 50% of his total income came from MLM. After the fifth year he was able to match his medical income by participating in MLM. After the seventh year he doubled his medical income. And today he has more than tripled the medical income working 15-20 hours a week at his MLM business.

According to Dr. Menn, 60% of MLM income is residual or royalty income which is a continuous, on-going passive income that doesn't require him to be eyeball to eyeball with patients in order to generate revenues.

Dr. Menn also points out that there are tax advantages in relationship to travel. MLM is spreading around the world and is now in 44 countries. World wide sales is nearly $70 billion with more than 17 million distributors throughout the world. In Japan MLM (Amway?) is the second most profitable foreign company doing business in Japan, $1.9 billion in 1996 which is second only to Coca Cola. Dr. Menn has opened up markets in other Spain, Italy, Argentina, Chile, Mexico, and the Phillippines. As a result he has have become an international traveler. Dr. Menn says, "There isn't a place on the face of the earth that he can't link up with the business and write off the trip." MLM also provides you with an opportunity to renew old acquaintances and to make new friends.

Dr. George Mekras is a urologist in Miami Florida and has been an Amway distributor for 6 years. He indicates that one of the benefits of the business is that you have an opportunity to include your family. Of course some physicians have their spouses work in the practice and may have their children work part time in the practice filing charts. But these jobs are expenses that are subtracted from your bottom line. With MLM, Dr. Mekras says that family members can have their own business as associates and actually generate their own income. Also Dr. Mekras points out that your MLM business is inheritable, willable and transferrable to your family for up to three generations. That is certainly something we all want to consider since there is so little good will left in medicine that many of our spouses and children cannot benefit from a lifetime of a doctor's hard work in hisher medical practice.

Another advantage of MLM is that it can be done whenever you like allowing you more freedom than the constraints of a medical practice. Consequently, you have more time with your family. Dr. Ochipinti also points out that he has never had another distributor or customer call him in the middle of the night and he has had no litigation concerns from the program.

Ochipinti also points out that MLM is not a dog-eat dog world where you have to claw your way to the top by competing for only a limited number of patients or customers. In MLM you can succeed by helping others achiever their goals and dreams. Everyone is your ally. There are no adversaries.

None of the doctors interviewed integrated their MLM with their medical practices. However, all of them had colleagues, especially in the primary care and endocrinology, that included their MLM business into their practices. For example, there are MLMs that distribute nutritional products, vitamins, minerals and skin care products. These products can be recommended to patients.

One of the main advantages of participating in an MLM is that the cost of entry into any one of these businesses is minimal. You have no rent or overhead to pay. You have no marketing or advertizing expenses. You do not have to spend money for an inventory of goods or services. There are no staff that you will be responsible for. There is no accounting or extensive records to keep as all of the book keeping is done for you. The only investment that is required is your time. The more time you invest, the more monetary return you get for each increment of time.

Like any other successful program there are going to be disadvantages and MLM has a few. Dr. Ochipinti indicates that perception is the biggest problem. Most of the public is under the impression that all MLM is an illegal pyramid scheme. The truth it is that MLM is very legal and even an ethical way to become an entrepreneur with almost no investment and no previous skills or education is required for entry into the program.

Another disadvantage of MLM, according to Ochipinti, is that there is a significant amount of rejection and apathy among those that are not knowledgeable or that do not buy in to the concept. If you are a distributor, your family and friends may not be supportive or go along with the program. Also, not every one you approach will sign up to be a user or a distributor. For physicians, that are accustomed to having most people follow their medical recommendations and instructions, this can be psychologically discouraging.

Advice to those interested in starting in an MLM
Finding the right MLM is like selecting what speciality or area of medicine that you chose for your professional career. Those that were interviewed suggested that you pay attention to the track record of the MLM. You will want to associate with an organization that has been successful in the past, continues to grow in the numbers of distributors, and the number of products or services that they offer. You want to select a business that has superior products that will be able to survive the competition. You should also select a business that has a broad appeal to large spectrum of the population. For the most part, a one product or one service company may limit the future potential of your company. The worst scenario is to work for years for a company and find that your residuals and royalties are not going to be there for you when you retire from your medical practice because the company was not able to survive.

There are literally thousands of MLM choices. The best advice is to go with proven businesses that have the longest track record. You will also want to investigate their marketing plan and their distribution of commissions. According to Dr. Mekras 75% of Amways retail price is returned to the distributors in commissions and bonuses. If you are going to invest your time and energies, you want to have confidence that the company is viable to pay the royalties and residuals 10, 20, and 30 years from now when you are no longer actively building the business.

Health care is undergoing significant changes. There isn't a practice that hasn't been impacted by decreasing reimbursements coupled with increasing overhead costs. Although most physicians are still investing their time and energies in their practices trying to increase the volume of patients and decreasing the overhead costs, others are looking for alternative methods of supplementing their incomes. One of those alternatives that appears to be very attractive to physicians is MLM.