What Is An MLM Business, And Are They Worth Joining? Simply Put No

If you’ve been looking for a way to make money online, then chances are you’ve probably run across several MLM Business’s claiming they can show you how to do just that.

However if you’re new to the whole make money thing online, you’re probably wondering what is an MLM business, and can it really help me achieve my financial dreams?

Now if you want my personal opinion, I would say chances of you making good money with an MLM business are slim to none — and your best choice would be to avoid them all together.

While this may seem quite harsh and even upsetting to some of you, let me first explain why I believe this — and secondly show you another method that has a much higher chance of making you money online.

So first things first, lets breakdown down what an MLM business really is.

Here's an ethical way to make money online

What’s an MLM Business?

So what exactly is an MLM business, and why is that some people hate it and others will stop at nothing for you to join them?

What is an MLM Business

Well in short, MLM stands for multi level marketing. This basically means there are going to be several different methods and ranks in the program — which will allow you to make more money (or so they want you to believe).

MLM has also been called many other names like network marketing, pyramid schemes, a home base business, and referral marketing. So if you see any of these other names, just know they are all talking about the same thing which is MLM marketing.

Now while each MLM company has its own payment system, rules, and “products” — essentially that all go about business in the same way.

Once you join, you’ll either be making money by selling their products yourself, or you’ll make money off of people you recruited into the system.

While this may seem confusing at first, let me try to break it down for you more simply and explain exactly what goes on in these companies.

How Do MLM Businesses Work?

As I just mentioned, while you can make commissions of your personal sales — MLM businesses mostly revolve around recruiting people into the program so that you can make money off of them (and also so they can do the same thing.)

The people that referred you (as well as the people that referred them) would be called your UPLINE, then everyone that you refer into the program (as well as the people they refer) are your DOWNLINE.

How this structure works is the more people that you can recruit into a program, the better pay you’ll get. Also the company will usually offer a variety of bonuses like cars, vacations, or one time special payments for having a certain number of people in your down line.

How MLMs Work

Now the main reason you want to recruit as many people as you possibly can in MLM businesses, is that you’ll earn a percentage of every sale they make.

For example lets say I decided to join a MLM fitness program that was selling weight loss pill. For every package worth $50 dollars I sell, I’ll earn $25 dollars. However I can also earn $12.5 dollars for every sale that someone in my down line makes.

So I could either sell 1 package to earn $25 dollars, or I could recruit a person and have them sell 2 packages at $12.5 and earn the same thing. Or I could recruit 2 people, and if they both sold 2 packages I would then have doubled my money.

Now where the problem arises with most MLM companies is they try to persuade you by saying you’ll get rich by recruiting tons of people, rather then selling their actual products.

Therefore from what I’ve noticed they usually sell pieces of junk — because they know people aren’t joining to use their products — but rather are joining so they can recruit as many people as possible and make money off of them.

And this is just the tip of the iceberg when it comes to problems that arise in the MLM industry.

Some Other Common Problems With MLMs

Along with most of MLM companies selling completely useless products, there’s also many other problems that arise with this type of business model.

1. They Have Complicated Compensation Plans

The thing that drives me crazy when reviewing MLM opportunities, is when I have to figure out how much money you can potentially make if you were to join a certain company.

Complicated compensation plans

You see almost all MLM compensation plans usually consist of several different ways in how you can make money — and sometimes have up to as 20 different ranks at which you can try to aim for. So its not uncommon to have a 40 page PDF attached to their program, just so you can try to and figure out how much you’ll get paid — which sometimes looks like a calculus problem to be honest.

So unless you’ve already been a member of a MLM company before, just be ready to spend a day or two going over their compensation plan so you’ll know how much you can earn.

2. They Have A Very Low Success Rate

When being persuaded to join an MLM program, you’ll usually be told how several people are making 50+ grand a month, taking luxurious vacations, and are already retired at the age of 40.

While this probably has happened for a few people, the truth is its usually the people who created the program to begin with, or the people that joined immediately after it was launched.

Usually after you join the company, you’ll find out real quickly that its harder to get people then you thought — which means you’ll probably start begging your friends, family, and people you know online to join telling them they can make a lot of money very quickly.

I’ve personally been a victim of this, and I can tell you i’ts quite sad when you see someone you like try so desperately to get you to join a program — and when you kindly decline their offer they get very upset and stop talking to you for months.

So unless you have the proper training on how to build a website and get it ranked in Google, or know how to do proper PPC campaigns — you too will just be calling everyone and anyone you know selling them questionable products and talking about what an amazing business opportunity you have for them.

3. Most Mislead You With False Information

Whether you’re joining an MLM company about diet and fitness, or one on how to earn extra money online — the people selling the program / and the people recruiting you are never going to tell you the whole story.

untold story

Usually they will say how easy it is to succeed in their business and that they barely have to do any work, all while showing you a diagram of how many people you’ll need to recruit to be financially free. While this sounds very tempting (and trust me some of them do a very good job) — what they’re really doing is telling you a complete fat lie.

The truth is the majority of them are making on average $80 dollars a month, and are usually selling you their pitch based off what they were told to say in the training they got after they joined. I remember when someone tried to get me to join even saying how easy it is to recruit people, and all you’d have to do is read a simple pre written sales page they had to make it happen.

Well I can tell you I didn’t fall for it, and quite frankly from what I heard I don’t think many others would of either.

Anyways besides MLM companies misleading you on how much you’ll make, they also mislead you into how much you have to pay too.

You see when joining an MLM company, you get the impression you have pay the monthly membership and that will be it. However what you’ll find out very quickly, is that your dead wrong.

Many of these programs usually make you buy their products before you even sell them, Which can cost you easily an extra $200-300 dollars. On top of that I’ve seen somewhere they continually come out with newer and better deals / products — saying if you don’t try it out then you’ll be leaving a ton of money on the table.

Of course what they’re really doing is just trying to find ways to get more money out of you, so that the can keep paying the people at the top of the pyramid scheme the huge bucks — while the people down below get close to nothing.

4. Most Come And Go Like The Wind

MLM programs not only are a very poor way to try and make money online, but most of them usually end up disappearing after a few years. The reason for this is that once the hype of the program dies down after its launched — people usually lose interest or the CEO just starts another MLM company and does it all over again.

I’ve personally seen the same person create 3-4 different MLM companies — and each time he says this will be the best opportunity of your life and that he can owe all his success to the current business he’s promoting. Again most people won’t take the time research the CEO’s of their company, and usually just believe whatever lie their told.

Also MLM companies not only will dissolve after a short period of time, but they are also illegal in some countries around the world.

In my previous post I talked about a MLM company called Qnet, and they banned from going into India. While this is the only one I found doing a little bit of research, I’m sure there’s plenty more this certain company is not allowed to go in as well.

So I’m not sure about you, but I don’t want to be a part of a business they can suddenly vanish overnight and also is illegal in certain parts of the world.

Instead I would want a program that is honest, has a good reputation, and provides exactly what it says it will.

Luckily after searching I have found such a program! It’s gotten nothing but positive reviews, its been helping people make money online since 2005, and its extremely affordable to become a part of.

The program I’m referring to is Wealthy Affiliate, and if you want more info on it you can click here.

So Are All MLMs A Scam, Or Can You Actually Make Money From Them?

While I don’t want to just bluntly label every single MLM company out there as a scam, I will tell you that finding a legitimate one to be a part of is going to be hard find.

If the company talks about recruiting people and how you can get all these nice prizes and vacations, instead of telling you about their actual products — your more than likely dealing with scam then.

As far as money goes, like I mentioned before the people who do make it big and earn thousands of dollars a month are very few.

The reason they did so well is one they probably joined the company before it was even released, and two they were probably good marketers to begin with — and could easily start up a successful small business if they wanted too.

Again going back to how most MLM companies like to mislead people, they will not tell you that only the very small few at the top are making the kind of money they are talking about — instead they want to sell you a pipe dream and say if you fail its because you didn’t work hard enough or have the necessary skills to become successful.

To be honest it totally disgusts me with how this overall business model works, but since they are selling “products” people can’t legally call them a scam and shut them down.

Either way like I said they usually end up falling apart within a few years, but during that time who knows how many people they’ve conned into joining their program so that they can become rich.

Final Thoughts – Should You Join an MLM Business?

If you are thinking about joining an MLM company, I hope after reading this post you will have seconds thoughts before doing so.

Personally I don’t want to see your hard-earned money and time be wasted on a business model that quite frankly isn’t going to do anything for you, and probably in a few years won’t even exist at all.

Don’t worry though, as there are very legitimate and profitable ways you can make money online — and best of all they don’t involve recruiting people or spending thousands of dollars to make it happen.

One of the most lucrative ways I’ve found you can make a living online is through affiliate marketing.

With this method you can build a business around something your passionate about, you can sell whatever you want, and you make money based off of your own efforts instead of relying on a down line of people to determine your income.

So If You Want To Make Real Money Online, Try This…

After going through hundreds of programs online, Wealthy Affiliate continues to be my most recommended choice in showing people how to do make money online.

Some things I like about them are:

  • They’ve been around since 2005 and have nothing but positive reviews
  • They encourage you to build a website around something your passionate about
  • Instead of a few people succeeding, thousands of people have gone on to improve their financial life with them
  • They are very transparent and tell you what you’ll be doing, how you’ll be doing it, and how much it will cost you
  • Last but not least its free to join and try out for 7 days to see if you like it or not

Again many MLM companies out there are going to tell you making money online is easy, fast, and requires little work — when in fact you’ll end up probably just going in debt.

With the right training though that teaches you how to run an affiliate marketing business, you can easily start earning a passive income each and every month — and if you work at it long enough you can even replace your job and do it full time.

To help give you a better comparison of the two, here’s a chart to help you out:

Affiliate Marketing vs MLM Business

So now that you have much better understanding as to what an MLM business is, and what my view point is about them — do you have any other questions or concerns you’d like to ask me?

Maybe you really love MLM’s and want to tell me why, or maybe you’ve been scammed by a few and hate them as much as I do?

Whatever it is, leave a comment below and I’ll be glad to discuss anything related to MLM businesses. 🙂

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6 thoughts on “What Is An MLM Business, And Are They Worth Joining? Simply Put No”

  1. This article gives a detailed overview of MLM and some of the obvious aspects that are most neglected. I consider this as a good reference for someone looking for alternatives of making money online, to weigh their options properly.

    With my personal experience with Wealthy Affiliate, it is no where near MLM , hence a totally unique way of looking at the best approach to learn how to make money online.

    Thank you for the detailed review of the features of MLM. This a very detailed review that should help people to save a lot of people from wasting their time on MLM.

    Reply
    • It’s good to see some other people who enjoy Wealthy Affiliate as much as I do. I have said this numerous times, but the training, community, and overall knowledge you get at WA is nothing like I’ve ever seen.

      So it’s really a no brainier when you put it side by side with companies who are quite obviously trying to rip you off, as to which one you should try to learn from.

      99% of MLM’s are nothing but a ploy to get you to spend a lot of money on junk products, whereas Wealthy Affiliate teaches you skills you can keep with you the rest of your life and it only cost a fraction of what most MLM’s make you pay.

      Reply
  2. Great explanation of the pitfalls of MLM businesses, Michael. I’ve been in 2 or 3, and never succeeded. 

    I’m just not a recruiter. You have to be good at recruiting to succeed in MLM, and you have to recruit all the time because your down line will work for a couple of months and quit when they don’t make any money. 

    It’s also hard to sell the products because even the good ones cost too much because the company has to pay the lines of “representatives.” You can get basically the same products for about half price in Walmart. I wish I’d found your post many years ago.

    Reply
    • I’m a lot like you Grant, and am defiantly not a recruiter and honestly I don’t know how some people even recruit people into some of these MLM’s I’ve seen online.

      Like you said most of the time their products are overpriced, totally useless, and even in some cases  you’ll find companies that won’t have a product at all. Their business model is all about making a small group of people rich, while the rest work their butts off for nothing.

      It’s no surprised that MLM’s come and go much like a few fad in high school. They build their business around a pyramid scheme model and once the hype of their launch dies — they make a new one with a different name.

      Reply
  3. Hello there,

    I have been having a few friends of mine trying to talk me into joining a few mlm programs they promote, but since I didn’t know much about it I decided to do some researching.

    After reading your deep look at mlm, I am very thankful that I took my time before joining them. Frankly speaking, they are not worth the money.

    I’d rather go with your recommendation and join Wealthy Affiliate. It seems more workable for me.

    Reply
    • I’m glad you decided to do your own research before joining Dave. Sadly many people won’t do this and will get drawn into MLM companies due to vacations, cars, and money they say you can earn.

      Like I said though the only people who ever get those things are usually the people who joined from the very beginning. 

      With Wealthy Affiliate they teach you how to build a business around anything your passionate about. So whether you started a business 5 years ago or just yesterday — you could potentially be making as money money as them and be doing it in an ethical way too. 

      Reply

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