Multi-Level Marketing Diagram

Defining Multi-Level Marketing (MLM) and Debunking the Myths

Multi-Level Marketing (MLM) is really a pretty straight-forward term: those involved are trying to sell something, and trying to recruit others underneath them, in what is often called their "downline", in order to profit off the sales of those others as well. Those others have the same opportunity to then recruit more people under themselves in their downline as well, with the ultimate goal of establishing some sort of residual income for those at the top. There is often an aspect of coaching and mentorship as well, to establish and encourage those who are building their sales and their recruit force.

When most people first encounter this model, they begin to get skeptical, as this sort of thing has captured the negative stigma of a "pyramid scheme," where the guys at the top do little work and profit off the guys at the bottom doing all the work. One truth that MLM gets right, is that all businesses, under that definition, are pyramid schemes, where the owners, managers, and directors generally earn far more money for generally the same or a lesser amount of work than those at the bottom of the organizational chart.

MLM: A Proper Approach

Open-minded but not Blind Faith

MLM is not something to be feared or stygmatized, but at the same time it shouldn't be approached with blind faith. If you were to decide whether you should take or keep a normal job, you should first realize it's not unreasonable to think that you might make your employer five times more money by doing your job than what it costs for them to employ you with your wages, benefits, and time off. You should also take into account whether you could derive better benefits (more money, better insurance coverage, more time off with family, etc.) if you were to leave and go elsewhere or become self-employed. Business is business, so weigh those same sorts of considerations with an MLM opportunity, and you'll be heading the right direction.

The Key: Research!

Just as a person shouldn't go in to debt for school without weighing their job prospects for post-graduation, neither should you join any MLM marketing business just because it sounds good, feels good, or because the people are very nice and seem to be well-off. If there is one point that is more paramount than any other, it is that you must really research any business model to figure out if it realistically makes sense for you and your goals. If you are hoping to make an extra $3,000 per month with perhaps a bunch of upfront effort and with no ongoing effort after a year, look for someone who can provide evidence that they are doing just that, rather than just good motivational talk. Don't be afraid to ask lots of questions, over and over if needed, and don't let yourself feel pressure if you are the only one person in a group of 100 who doesn't yet buy into a business model. The key is that you must clearly understand how the business model works, and whether it practically could be used to make the kind of money you're looking for. Nothing else matters besides you understanding if and how the business model works, and whether there is non-sensationalized proof to any claims of success. Also remember, your time and any money you have to invest are all costs to you, so make sure those things are outlined for you in advance of you starting any business, if you should decide to do so. There is money to be made in MLM, but if you don't know the specifics of how a business model works (if it does), then chances are you'll walk away with little or nothing earned.

Under Pressure

The Fear of Disappointing Your MLM Representative

One of the greatest human fears is disappointing someone who cares for you, or seems to. Any MLM representative knows that they must gain your trust and respect in order to be successful in building their recruiting force, and so chances are you will begin to like your MLM representative the longer you get to know them, and the more they learn about your own dreams and desires.

Still, you shouldn't join any MLM opportunity unless it truly makes practical sense to you. Fear should be no motivator for your joining a business model or not. So if the numbers just aren't matching up and the path to financial freedom just isn't yet clear after a few meetings, be prepared to say "thanks, but no thanks". You'll likely get some pushback from the time that your representative has put into you, but stick to your decision once you've made it, and try to cut ties as cleanly and respectably as possible. Even if nothing comes of multiple meetings, at least you've learned a bit more about your goals, your ability to make the right decisions for yourself, and what others are trying to do to achieve financial freedom as well. Should you find a business that works for you, you'll be happy you joined out of your own thought-out decision rather than from any subtle or subconscious pressures or fears. Whichever you decide, if you follow these pointers, you can't go wrong.