Have You Found the Best MLM Business?
Are you considering becoming an independent distributor for a multi-level marketing (MLM) company? Good luck. You’re gonna need it because you’ve got your work cut out for you. Wait … you think yours is different? Why is yours the best MLM business?
Many people have unfavorable views of MLM businesses (also referred to as network marketing companies). The MLM business model, in general, has a bad reputation and is often thought of as a pyramid scheme.
MLM Business and Pyramid Scheme Structure
MLM businesses and pyramid schemes are organized essentially the same way. Someone recruited you into his or her hierarchy, so we’ll start with you.
- You just paid an application fee and became an independent distributor of MLM Company XYZ. You are all alone, for now.
- Excited about your earnings potential, you went out and recruited two people to be a part of your downline. You and your downline total three (1 + 2).
- Your immediate downline each went out and recruited two people. You and your downline now total seven (1 + 2 + 4).
- The new “recruits” were all excited and eager to make income passively, so they each went out and recruited two more people. You and your downline now total 15 people (1 + 2 + 4 + 8).
Your downline, should you choose to accept life as an MLM marketer, will not look like this. I’ve oversimplified it for illustration purposes. Most people will be directly under you but occasionally, you’ll find a few people who can grow their downlines (and yours since they’re part of your hierarchy). So, instead of looking like a nice and even inverted tree like the illustration above, your tree will look more like its got some roots growing at random lengths underneath.
Difference Between MLM Business and Pyramid Scheme
Some people mistakenly believe that all MLM companies are pyramid schemes when they are not. However, there is a very fine line between the two.
If your MLM company requires you to buy a specific amount of inventory each month in order for you to be allowed to receive compensation from your downline, this should raise a red flag. Beware!
Federal Trade Commission’s Guidance on MLM Businesses
The Federal Trade Commission (FTC) provides guidance to consumers on multilevel marketing businesses. Bottom line up front, know the answers to the following questions, at a minimum:
Products or Services
- Is there reliable research to back up product claims?
- Are the prices reasonable?
- Are products safe?
About the Company
- How long has the company been in business?
- What is the company’s reputation?
- How do you get paid?
- What are your expenses?
- Is there proof of potential earnings?
- What is the refund policy?
Ask Questions of Your Recruiter and MLM Company
My Experience in Multilevel Marketing
In the mid-1990’s, I was an independent distributor for Equinox, an MLM company that is no longer around. Ultimately, the courts found that Equinox was running a pyramid scheme and shut the company down.
The reason why I write this article is to inform people who are considering working with an MLM company to do their homework and get the right answers. I would not have fallen for the bull $h1# that some of the independent distributors pulled on me.
Here are answers that I learned the hard way to the questions above:
Products or Services
- Is there reliable research to back up product claims? No.
- Are the prices reasonable? Ridiculously expensive. We sold shampoo in the mid-90’s for $11 per bottle. Our whole-house water filtration systems were around $800, I believe.
- Are products safe? I think so because they claimed to be environmentally friendly. Refer to the first question about reliable research.
About the Company
- How long has the company been in business? Equinox had been in business since 1991, approximately. They eventually made it to number one on the Inc. 500 List.
- What is the company’s reputation? Good at the time.
- How do you get paid? Sell the really expensive products or have everyone in your downline buy their monthly requirements in order for you to get paid because no one wants to buy your really expensive products.
- What are your expenses? You have to buy products every month in order to receive money from your downline.
- Is there proof of potential earnings? No.
- What is the refund policy? Can’t remember.
I should have asked more questions and warnings should have sounded in my head when:
- I responded to a job posting in the newspaper but sat through a presentation on MLM. Fraudulent advertising.
- We never received any sales training to promote our products. We had to figure out how to sell our ridiculously overpriced products on our own.
- The first week I was there, my recruiter (or upline) told me she had selected me to become a Sales Director. I just had to buy $5000 of inventory and my downline would be built for me.
I’ve never done drugs in my life, but I must have been high on crack for thinking this was okay… I seriously don’t know what I was thinking.
What Is The Best MLM Business?
I wholeheartedly believe that there are very reputable MLM companies that offer their independent distributors a great opportunity to build wealth. Beach Body is a very popular one, but I’ve never spoken to anyone about their business. We’ve all heard about Amway, too.
The best MLM business opportunity has great products or services that you can believe in and a great compensation plan. More importantly, their answers to all the questions above give you the confidence in knowing you’re supported by a reputable company.
Most people probably should not get caught up in an MLM business, unless they fully understand that it’ll be an uphill struggle to build a downline. 😉
If you do decide to try the MLM business model, I applaud you and hope you find work you love.
But please, do your homework. The best MLM business is one you wholeheartedly believe in–not one where the prospect of making thousands of dollars per month passively from your downline draws you in. I was so intrigued by that concept that I couldn’t think or see straight. MLM businesses have literally taken the following phrase to heart:
Your Network is Your Net Worth.
Do You Have Any MLM Success or Horror Stories?
Please share this article with others and comment below. I’d love to hear your thoughts.