What is MLM business opportunity?

 

What is MLM business opportunity?

Today we are talking about MLM business model. We will explain what is MLM business opportunity and after reading our post you will know should you take part in MLM business or avoid it at all cost.

We will do our best to give you our unbiased opinion and highlight the good and the bad of this type of business model.

If you ever heard about or worked in companies like Oriflame or Herbalife than you were a part of MLM company.

So what does MLM actually means?

MLM stands for multy-level marketing. This term is also known as network marketing, referral marketing and pyramid selling.

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HOW DOES MLM MODEL WORKS?


MLM companies create their revenue through their sellers who are part of their marketing network.

These sellers are not paid by the company but their earnings depend only on their skill to sell company products and/or expand their network of associates. Most MLM companies charge one initial membership fee.

After that you are ready to start recruiting more people to your network and sell products.

What is MLM business opportunity?

So, selling a product gets you some commission but in order to really succeed in these kinds of companies – you have to expand your networks of associates.

This is where lies the real income and real money for workforce in the MLM companies. Of course, this is not all the work.

After you recruit new members they need to start making sales and acquire new members. This is what you will need in order to succeed in this business model.

As you might expected, getting new people to join you is not an easy job. That is mainly because most people are drawn away from this type of business. Especially if you need those people to actually start and make sales of their own.

CAN I REALLY BENEFIT FROM THE MLM BUSINESS MODEL?


Yes you can – BUT ONLY IF YOU ARE THE TOP.  Otherwise, you will just keep your hopes up with little or no results.

The biggest benefit from this type of business has the owner, or number 1 in the network. The lower you are in the network the less money you will earn that’s if you earn at all.

When you are recruited as a new member in any MLM company, you are firstly introduced to the system. Alongside company history, you are also introduced to the most successful members – either personally or just via some company brochure.

Obviously, their top members are earning a lot of money and are really rich people. But getting there is not easy and often. Do not think you will be one of those people overnight.

As we said in the beginning of the post another word for this type of sale is pyramid sale. This specific model works as a binary plan. Binary plan reperesents organizational structure used in MLM business from the 1980’s.

As it is shown on the picture below, new members have two downline distributors/member underneath them. It is also clearly visibile who gets most of the profit.

What is MLM business opportunity?
Source: https://en.wikipedia.org/wiki/Pyramid_scheme

You will be one of these “nods” and your job is to expand your network and invite people who will buy company products from you and also become part of your network.

As you assumed, this type of marketing is also called referral marketing. So, this mouth-to-mouth marketing is not easy and really needs true dedication and patience as well.

Every new member dreams of one day having a pyramid of his own members. Theoretically, this is the best business model. In reality, most members lose more money than they gain. That is just a FACT!

 

NEGATIVE ASPECTS OF MLM BUSINESS MODEL


As we all know, this business model had some really bad reputation because of the similarity with famous pyramid scheme scams. Basically, this pyramid scheme scam works almost the same as MLM model.

Every member is promised a share in profit if they recruit new members to the network.  So as in MLM business model, workers are not paid and are working only for the share in profit.

You first have to pay join in fee and after that you are one of the members. The accent here is on acquiring new people who will join the network on the same terms.

What is MLM business opportunity?

 

Biggest difference between pyramid scheme scam and a legitimate MLM business is the PRODUCT! If the accent is on recruiting new members and not actually selling the product there is high chance this business operates as a scam.

Pyramid scheme scam organizations are usually short term and only very small percentage of involved parties have real benefit. Usually those people are creators of this scheme. And that is the only truth about this type of SCAMS!

What is MLM business opportunity?
Source: https://en.wikipedia.org/wiki/Pyramid_scheme

So if you decide to join  MLM company, make sure you do a good research about the company status, feedback – both workers and employees, ask many questions and find different sources.

Some critics have the theory that MLM business is actually a legit pyramidal scheme some think that MLM is legit business opportunity.

HOW TO SUCCEED IN MLM BUSINESS?


Well, the best way to really be successful in this business model is to become a company member when the company is still new. This is because of how MLM system works.

The sooner you are a part of the new company network the greater the chances you are gonna be one of the top tier members – with big network and great profit.

Finding a new MLM company that are gonna be the next gold mine for this type business model is not easy.  Why? Because, there is always a chance that this company could be running some pyramid scheme scam.

So you would not like risking your time and effort just find out you were used. Not to mention that participating and earning from pyramid scheme scam is ILLEGAL and considered criminal offence in many countries.

Having all this in mind, I would not recommend investing in becoming a member of MLM company.

You will spend more time without any guarantee you will become successful and actually earn money.

WHAT ARE THE ALTERNATIVES?


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What is MLM business opportunity?

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Let me know in the comments about your previous experience with MLM companies.

Best regards,

Strahinja

 

36 thoughts on “What is MLM business opportunity?

  1. Hello Strahinja,
    I started researching multi-level marketing companies a while back after I watched a video by Robert Kiyosaki where he actually recommended them as a learning experience for newbies.
    I am not sure that I agree what do you think?
    Is there marketing tips to be learnt from a mentor.

    1. Hello and thank you for your message.

      Well, I am familiar of Mr. Kiyosaki and his work. I can not agree 100% with him on this point tough.

      I personally believe that MLM can be stressful and exausting but it can still learn you the ways of the game, especially the part regarding hustle and chasing new sales and customers.

      Thank you for your comment.

  2. MLM plans get a bad name sometimes, like you point out about the pyramid schemes.  Like most things in life, there are legit ones where people can actually make money and there are those that are just trying to get people to sign up and give a registration fee for something they know has no chance of working.  Filtering through them is the problem.  Once you get burnt a couple of times, it’s easy to write off the entire medium.  I enjoyed this article’s truthful analysis of MLM without bias, and I am looking at Wealthy Affiliate right now.

    1. Thank you Brandon for your comment.

      I appreciate your point. There are legit MLM plans but they recieved bad conotation because of the scams that were run in the past.

      Thank you for reading.

      Strahinja

  3. MLM or multi level marketing has been around since the early seventies, it has proven to be a very lucrative way to make money off the back of your and other peoples efforts. This website addresses the pro’s and con’s of MLM so that anyone reading this article will be able to look at any MLM business and decide whether or not it will work for them. It is true that the first people that start in any MLM company and stay usually end up the richest people there.

    1. Thank you Fintan.

      Your comment is unusual but I appreciate it anyways. You are helping the people who are reading this to find out the core of my post.

      Thank you for taking the time to read my post.

      Best regards,
      Strahinja

  4. This is an interesting explanation of the MLM model. I personally have been part of this model in the past, it was a direct competitor of Herbalife… Although I was not on top, I still was able to earn money. There was only one problem though…

    You are more focused on recruiting prospects that actually helping people, which leads to not telling the whole story to future prospects or even customers.

    At the end of the day I quit this business and started a more ethical business model, like the one you are recommending!

    1. Thank you Jurgen.

      I appreciate your comment.

      I agree on your point. Sometimes you can get too carried away with recruiting that you forget the actual reason of joining.

      Best regards,
      Strahinja

  5. Thanks for putting up this informative review of MLM.

    It is true that joining this “network” would only be beneficial if you will be on the top, or be a member of newly established one, but if not… like you said, there’s no guaratee that you’ll be successful.

    I have been a member of MLM network before, but it was offline though. Ugh! The experience was exhausting, hunting potential members, convincing them to buy the product and stuff. And to include recruiting family members first! Ugh! what a nightmare!.

    Anyway thanks again for clarifying things regarding MLM.

    Good luck and wishing you success

    1. Thank you Mina for your comment.
      I am really glad you enjoyed reading my post.

      I advise anyone to stay away from MLM because it is too difficult and too frustrating.

      Affiliate marketing is better alternative.

      Best regards,
      Strahinja

  6. I have tried various mlm companies, not really knowing it was an mlm, but you have described it so well.  Now I see why it was so fruitless.  First it is really hard, as you say, to recruit people under you.  And if there is a one-time start-up fee, then even more difficult.  Then you have to really hope they stay with you and that they can recruit.  I see now, it ALL depends on your downline and what they do.  I don’t like this at all, and now I see why I was never successful.

  7. I joined a network marketing company for financial services a couple of years ago and realized that it wasn’t for me. I felt so sleazy going to friends and family members. I also didn’t like the fact that I had to find people that work just as hard as you to succeed which is vary rare. I know that thanks to a different kind of businesss that I do, I no longer have to be involved in network marketing ever again.

    What is your experience with network marketing? 

    1. Thank you for your comment Jessie. To be honest, I myself did not have that experience in network marketing but I had friends who did had different stories.

      As for MLM. it is really hard to become a success there. I perfer affiliate marketing.

      Strahinja.

  8. I consider that multi level marketing is very controversial. Also I do not think that is the best business opportunity out there. There are many other ways to make money, that are 100 times better than MLM. For example affiliate marketing is one of the besg business ideas thag could ever exist. 

    I highly recommend it!

    Best decision ever!

  9. Thank you for sharing with this great post about MLM business opportunity.I agree with you that people can earn money through this program the only problem is that the downlines get less while the uplines get much.

    It is not fair to see people who need money work for the ones who have it.

    We have such program in our country but you can see only 10 people are earning much money,they are buying cars while others are still at low level even if they try their best.

    I can’t try it sa i found the most interesting platform which helps me to do my own business instead of working for others.

  10. Excellent article and my wife and I are currently in an MLM business, but only because we like some of their products. We have no real dream of making a living from it. I do however know that there is money to made from doing online marketing, or affiliate marketing. I know about Wealthy Affiliate and believe it to be 100% legit. I know that if you want to start a new job, you should be trained to do it, this is Wealthy Affiliate at its core. 

    Thank you for the time it took to write this post and the detail you have put into it. I am in complete agreeance with your points.  

  11. I know MLM from the core. Been introduced to it several times of my life, fell for it once. You name it, NP USA, Buzzolute, Herballife, Amway(now it is buzzolute) and many many more. I hate the fact that you have to buy the products every month in order to keep your subscription and you also have to expand your products to your friends. This is where it gets tricky for me, I hate making my friends to be my downline, I rather reccommend them a goo product, let them try and earn commission without trying so hard where I also can lose good friends! Anyway, I have just started affiliate marketing, I love this type of commission better, the more you work the more you get. 

  12. As soon as I got into the description of MLM, my first thought was Pyramid Scheme! The MLM with a tangible product, reminds me a lot o Amway.I know Amway was banned in a few countries. But, I think it was because of false advertising and making exaggerated claims…I agree MLM is tough and not sure worth it…

  13. Thank your for a great explanation on MLM. I have actually joined several MLM companies before not because I wanted to make money with it; I did it to avail of the bigger discounts on their products that were available to the members. Sadly, most of these MLM companies I joined are now out of business. Why? Because as you correctly pointed out, businesses like this are usually for the short term only.

    I understand very well that MLM’s work like a pyramid. You can make big money if you are at the top and and can just sit back and relax while your down-lines work their butts off to recruit. Those who are ahead in the game get rich but those who came last will not and may not even get their membership money back.

    Honestly, this kind of business model does not sit well with me because I am not good at selling to or recruiting people on a face-to-face basis. I’d rather have a business that I can manage behind my computer so if your recommended platform can help me achieve this, I will gladly join. 

    1. Thank you Alice. Sad to hear you did not manage to make any money with MLM’s. But as I said here, it is not easy to make money with MLM.

      Strahinja

  14. Hey, Strahinja!

    In the past I’ve been recruited to Amway. Initially I found it fun, enjoyed going to seminars, interacting with other people, who were just starting and trying to figure it all out. Ultimately though it was just a great learning experience. Nothing to be gained financially.

    I mean, superficially the products they marketed seemed awesome. However, when really immersed, it was far from that. For example, the vitamins that they offer are pure garbage. They’re marketed as this premium top of the World products, which obviously creates insane amount of hype around them. However, they’re garbage.

    And these were not the only products that didn’t really live up to the hype that was created by the Amway community as a whole.

    Ultimately, it just didn’t feel right to market something I myself don’t believe in. So, I definitely concur, it’s largely about the products that an MLM business offers.

    Other than that, thanks for all the insights, I learned a thing or two.

    Cheers and have a Great One!

    Matiss

    1. Thank you for your thorugh answer Matiss. I appreciate it. Never heard of that company, but if something works than that is great. 

      I still recommend affiliate marketing over any MLM.

  15. Hi there,

    After reading through your article, I realized something:  I personally dislike the MLM business model because of what you have pointed out in your article.  Not only do you have to be in the top tiers to really make money, it’s the recruiting part that I dislike the most.  

    I have never been a good salesman, and to recruit people, you have to be a good salesman!  Not all MLM’s are the same though, but I have seen legit businesses charge up to $15,000 and $20,000 to gain access to their “special tier”.  At that price, no wonder that MLM’s gets a bad reputation when people lose that kind of money!

    Like you mention, the only good thing about MLM’s is if you get in early enough to be in the top tier.  Then you are able to make money out of other people’s effort and recruiting.

    I have checked out your top recommendation and I have a question about the recruiting. If I join Wealthy Affiliate, do I have to recruit other members to make money there too?

    1. Hello and thank you for your comment Dennis. As per your question, you do not have to recruit anyone if you do not like the programe. If you do like you are welcome to recommend and you earn from every person that becomes new member and new premium member.

      Thank you.

      Strahinja

  16. Quite an expository piece, I personally think MLM is a good business model which can make anyone some good money if the principles are well followed; However nowadays there are so many companies online and offline using MLM as the major marketing strategy for their not so good products , this in turn make the processes cumbersome tiring and uninteresting.

    At the end those who participated in such a scheme have a bad story to tell about MLM and call its a scam not knowing that it failed cause of the product and not the business model which is MLM.

    MLM remains a good business model if applied correctly for the right products.

    1. Thank you for your comment. You have made some great points there. I tried to show people that MLM is not a pyramid scheme, but a legit business model.

      Strahinja

  17. Thank you for making clear the difference between a pyramid scheme and a pyramid scheme scam. The term “pyramid scheme” has such negativity associated with it, as you wrote here, that it’s next to impossible to get anyone to join after learning that the business model they are considering is actually a pyramid scheme.

    I have tried several of these thinking that my reason for failure was because I didn’t believe in the product. I believed that I could get behind a different product and moved on. Along the route, I (and my wife) tried Amway, Herbalife, Shaklee, Mary Kay and WonderSlim.

    The biggest downfall that I found with every single one of these systems is that, when you start you are expected to make an enormous purchase. I mean, how can you be successful in selling stuff with nothing to sell, right?

    Well, the “Stuff” is quality stuff. The quality is not in question, but it expires and you are not likely to sell all of it (if any of it) before it expires. And, in case you’re wondering if the Mary Kay products expire, they don’t, really, but the company changes the product line so the sales material and order forms no longer have the old product on them and there’s no way to sell them. On top of that, this means a whole new batch of “Stuff” you have to buy (New products, new catalogs, new order forms, new samples, etc.).

    All that said, unless you know a LOT of people…and I mean, like 10,000 people regularly read your blog and you’ve got a giant mailing list ALREADY, one of these businesses will do nothing for you and deplete your savings account.

    Your advice to stay away from these is spot on. It’s just hard to take heed with dollar signs in your eyes!

    Great article!

    1. Thank you for your comment. I agree with you John. I am glad that you tried it for yourself. This is the best way to know how money is made with MLM.

      Most of the time, it is not easy.

      Regards,

      Strahinja

  18. Hi Stranhinja,

    I suppose that at one time or another many of us have fallen victim to the myriad of MLM and pyramid schemes out there.

    Thank you for so succiently highlighting the pros and cons and warning signs of each.

     However, with so many false claims out there, how does one navigate through the maze of Affiliate Marketing programs to determine their legitimacy?  In other words, what are the warning signs Affiliate Marketers need to watch for?

    1. Hello and thank you for your comment Vincent. Well the biggest and most obvious sign is big and unreal claims. There is no easy money, especially no easy money FAST.

      Avoid programs like these even if they are really cheap. Because usually, they lead to upsells.

      Strahinja.

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