It always seems that when life is difficult and all you need are some easy answers, someone random pops up in your life and introduces you to an incredible “opportunity” that they’ve just discovered.
Whether it’s a relative, an old friend, or a perfect stranger at the beer store, the conversation always starts in a similar way. A bit of flattery, a few questions about your situation, and then the vague mention of this opportunity that you would be PERFECT for.
What Is Multi-Level Marketing (MLM)?
An MLM organization is one that is organized in a pyramid structure (but definitely NOT a pyramid scheme, those are illegal). The company will sell some products or services, but the main idea is to recruit people underneath you, as a small portion of their sales will come back to you. The more people under you, the more money you make.
Products are sometimes specific, such as Acai berry products, healthy coffee, weight-loss supplements, and much more. Others, like Amway and Quixtar sell a huge variety of household products. Others are service-based, such as Primerica, which offers financial counselling and life insurance.
Selling The Dream
You wouldn’t get excited if someone told you you could get rich by convincing other people to sell toothpaste, so all MLM organizations use a “living-the-dream” pitch to sell the idea. Imagine, they say, you had so many people underneath you that you never had to work again? You would do all the work upfront, setting up your team, and then those people would find other people and it would keep going, and every time someone came on board that would be more money in your pocket.
You’d be rich! That’s when you’ll hear about luxury yachts (it’s always yachts), fancy jewelry, sports cars, and trips around the world with your loving family.
It’s a sexy pitch, and it’s so easy to get caught up in the idea. If you dislike your job in any way, this will definitely sound better.
Is MLM A Scam?
There are no end to the accusations against MLM companies. They are called outright scams, Ponzi schemes, pyramid schemes, and rip-offs.
Most of the time, the actual organization is not at fault. People feel they got scammed because the dream they were sold is nothing like the reality.
If you actually follow along with the sales portion and grow your “downline” of marketers, you WILL make some money. In most cases, however, it won’t be as much as you thought it would.
The Truth About MLM
This author had the opportunity to go to a large meetup of Quixtar members several years ago. There were probably 2,000 people there, many of whom had been participating for several years. During one particularly boring presentation about women’s shampoo, a quick tour of the parking lot was taken.
The Dream had not been great to anyone in the lot. Whereas they had signed up for gold-plated hover-yachts and diamond-crusted gloves, most were driving beat-up Toyota’s and Ford’s.
There was ONE person who seemed to be the living embodiment of the Dream – the guy leading the meeting.
How To Judge MLM Opportunities
The one point that everyone glosses over when discussing MLM opportunities is that they are like any other business. Whether you start in an MLM group or open a business of your own, it will require hard work, time, dedication, headaches, and probably not as much money as you hoped. But you CAN be successful at it.
One of the greatest advantages of MLM groups is the amount of training you receive. Along with courses and learning material, you’ll be surrounded by like-minded people who are all trying to build something.
You can learn a ton from these people and from modeling yourself on other people’s successes. If everyone around you seems to be more interested in you buying some paper towels so they get their 2¢ commission, however, it might be wise to find another group to be a part of.
Do Your Research
These MLM groups really can end up with an almost cultish enthusiasm built into them that can be hard to avoid. Read as much as you can about any group you’re thinking about joining and find out what other members have said.
If you believe in the product or service and have thought about running your own business, give it a shot. The initial investment is minimal, and whether it works or not, you’ll learn a ton.