MLM, otherwise known as Network Marketing. It's illegal. It's a pyramid scheme. It's a scam. Nobody ever makes any money.
So-called network marketing "opportunities" have been shut down by the government for taking advantage of people who just want to build a decent future for their families. Others have been forced to pay huge fines just to keep from being shut down or having their owners sent to jail.
I'm sure you've heard all of this, and more, about the MLM industry. But is it all really true? Let's get the facts about MLM.
First I should tell you I have been involved in the industry for over 20 years. So I would say I have some experience in the business. Yes, I have made money - GOOD money! No I am not a millionaire. Nor do I pretend to be. And before you use that fact to justify one more "fact" about network marketing, let me tell you that it's my own fault that I'm not. You see I once believed all those "facts." I had gotten involved in a business opportunity out of pure desperation. But because I always felt like it wasn't a "real" business, that I was somehow doing something unethical or even illegal, I didn't actually do any work to be successful for many years.
Fortunately, through research and experience, I learned differently. I now know that there is nothing illegal, unethical or immoral about it. The truth is that it's a great business model that gives everyone - even the "little guy" a true shot at financial freedom. So let me give you the REAL facts about MLM.
1. It's not a pyramid scheme. Sure pyramid schemes do exist. And there are plenty of scams to be found online. But you can find scams and schemes anywhere that dishonest people think they can make a quick dollar without actually having to work for it. These companies do eventually get caught and shut down - with all the requisite publicity. But for every one of them, there are hundreds if not thousands of legitimate, reputable network marketing companies. MLM companies have real products that representatives are encouraged to sell. In fact, we have to sell them or we don't make any money. So yes, you will be expected to make sales. MLM companies sell everything from cosmetics, clothes, and jewelry to skin care, weight loss, and nutritional products to cookware, travel, and phone plans. In fact, you can purchase almost anything you buy at your local mall through an MLM or direct sales company. The only difference is that when you purchase from a MLM rep, you are helping to put food on the table of someone JUST LIKE YOU instead of adding more money to the bottom line of a major corporation. And in many cases the products are of a much higher quality and a much lower cost than what is sold in your local department store. (More about how that's possible at a later date).
2. Anyone can make a decent living with an MLM business. It all depends on how hard you want to work. It's just like any other business. If I open a restaurant, or a childcare service, or a flower shop and then don't promote my business and don't try to sell my products or services, I am not going to make any money. I might sell a little bit to family and friends, but if I don't advertise and market and look for new customers every day, I won't be successful. And you have to be willing to learn how to do that effectively. There's good marketing and very bad marketing. Why do you think every franchise makes all of their new owners do things the way they want? Because they have found out what works. In network marketing, you won't be told what you have to do. It's your business. But you will be offered lots of opportunities to learn.
3. You will be expected to recruit others into the business. Yes, we get bonuses for recruiting other reps. But if you think we can live off that without product sales, you are sadly mistaken. And where do you think the money comes from to pay those bonuses anyway? Product sales!
Is it hard to recruit others? Not once you learn how to do it properly. Do you REALLY have to? No. You can be content with what you make on your own product sales. But this is where one of the big benefits of network marketing comes in. It's called LEVERAGE. Say I have to make 10 sales to make $1000. That means I have to find 10 new customers for every $1000 I make. If I'm making $10,000 a month, that's 1000 new customers I have to find EVERY MONTH!
Now suppose I have recruited 5 people on my team. I still get $1000 for every 10 sales I make. But I also get $200 for every 10 sales my team makes. So suppose we have a really good month and we all made 1000 sales. Instead of $10,000, I now have made $110,000. With no more work on my part than it took to make $10,000. And if something happens and I am sick or I have a family emergency and can't make my 10 sales, I will still earn some income from the sales my team made. Will I always make that kind of money? No. Just like any other business, there will be good months and bad ones. You will have go-getters on your team who will make lots of sales and you will have some that don't do anything. But the potential is there. And the bigger your team, the greater the opportunity for money!
By the way, the concept of leverage has made lots of companies very wealthy. Think about McDonald's. Do you think they would be the company they are today if they didn't get a piece of the pie from every McDonald's franchise out there? Same concept.
4. You will be expected to pay an enrollment fee. You are buying a business. Do you think that McDonald's gave away those franchises for free? This is a legitimate business model. Expect to treat it like one! How much? That depends on the company. I have seen as low as $30 to as high as several thousand. The wonderful thing is that there are companies with enrollment fees to fit almost any budget. Some companies even have a range of prices, depending on what you want and can afford.
5. This is your own business. You will be subject to taxes and laws just like any other business. Your company will provide you with materials and training but you will be expected to do your own marketing and recruiting. They will probably have some ground rules that tell you what you can and can't do when representing them. Things like no fraudulent claims, or charging more for enrollment fees than the company dictates. If you expect to grow very large, you will have to learn all the things it takes to manage a business.
6. You can work at your own pace. Many of us started part-time until we built a large enough business that we could just work it full-time. There are no quotas to meet. Only your paycheck which will directly reflect the amount of work you put in. There are no set hours. When I started, I worked rotating shifts so sometimes I worked my business during the day. And sometimes I worked while most others were sleeping. Not always easy back then. Today, with the internet, you can learn how to be promoting your products and business 24/7...even while you sleep.
7. You don't need a big office or special equipment or certain skills. Most of us started out of our homes. I worked mostly from my living room or bedroom. And all it takes is your kit from your company and effort. A computer or smart phone makes things easier, but I didn't have any of those when I started. Heck they didn't even exist! (Oops, did I just give away my age?!) Anyone can do this. I have an 18 year old college student on my team. And I have a 74 year old grandmother. And every age in between. I have stay at home moms, lawyers, teachers, a hairdresser, a fitness instructor, and even a used-car salesman on my team. Anyone can do this if they are willing to work and learn.
8. This is a real business. Which means you will qualify for all of those home business tax deductions!
9. The income potential is limitless. You can make as much or as little as you choose. It all depends on the amount of time and effort you put into building your team and your business. The network marketing industry has created more millionaires than any other industry. Can you be one of them? That depends on you!
10. MLM will give you freedom. Financial freedom. Time freedom. And that is more important to me than the fact that I'm not a millionaire - yet! I have time to spend with my family. Time to enjoy the things I want to do. And time to keep building my business so that one day I too will be a network marketing millionaire!