If you’ve never been introduced to a Multi Level Marketing “opportunity” before than you’ve either been living under a rock, or you don’t know another human being.
Okay, that was a bit salty. But seriously, there are THOUSANDS that exist in the world (check out this list right here). And while I’m not saying they are all scams, I am saying you have to be careful. I’ve “actively” joined about a dozen or so over the years and I can tell you that I made my money back on all of them… and that’s about it.
They are so tempting because you are promised all sorts of things:
- Financial and Time Freedom
- Be your own boss
- Travel the world with all you extra time and money
- blah, blah, blah
I’m getting ahead of myself. Let me give you my top 10 reasons to be wary of any Multi Level Marketing opportunity:
1. The reality is, that unless you get in RIGHT at the beginning of these companies you probably aren’t going to make much.
Lot’s of these companies will put their top performers in the spotlight to make it sound like everyone can earn tons of money. If you’ve been to the meetings you know what I’m talking about. What they won’t tell you is that only about 0.4% of people will make their money back – that includes the fees for joining and any yearly fees. That stat comes straight from the FTC. Now compare that to 39% of small business owners and you’ll start to see that owning your own business is a better bet than an MLM.
2. A lot of MLM’s manipulate the numbers.
There is an MLM out there that will tell you, if you are an active, non-executive distributer, you will earn $62 a month in commissions. But what this same company won’t tell you is that about 86% of active distibutors never even earn a pay check.
3. You’re not really selling a product
Most MLM’s are based around the idea that you are to be a recruiter. “All you have to do is recruit 3 people. Then it’s simple, just get those 3 to recruit 3 each, etc…” So at what point does someone start selling the product? The answer is that everyone is so busy trying to recruit that no one is selling the product. Tell me this: how many companies are going to survive if they never sell their product?
4. If you’re recruits quit, you’re toast!
If you are going to make any amount of money in an MLM you have to keep your “downline” (those who you’ve recruited + those recruit’s recruits) on board. And like the earlier points have hopefully proven, because success rates are abysmal, the attrition rate is astronomical!
5. You are going to drive your friends and family nuts!
If MLM’s were a book it would be titled, “How to Lose Friends and Alienate Family”. Who likes to be bombarded with sales pitches and consultant meetings? I think joining an MLM is the quickest way to clear your friends and followers on social media!
6. Let’s talk about your Upline
If your “downline” are the people you have recruited, that means your “upline” is the person who recruited you. And in any other organization, that’s the person you would turn to for advice and training. But the problem in an MLM is that your upline was told by their upline to reach out to strangers to join. And that person’s upline was told the same thing. And that person’s upline was told the same thing. Which means your upline is no where close to being an expert or a manager, or having any skill in business.
7. You’re probably going to be asked to use some shady sales tactics.
A weight loss consultant posting beach photos on Instagram while talking about their product. But chances are they already had that body before using the product.
Or you get an email saying “Congrats! You’ve won a FREE makeover from X-cosmetics”. But in reality all that you’ve won is a sales pitch in the comfort of your own home where you are going to be up-sold.
8. The whole, “If you loved me…” manipulation
You are probably going to be told by your “upline expert” that if your friends or family don’t join the cult…I mean MLM, then they don’t support you as a person.
9. You’re. Not. In. Control.
Who determines your comission? The company. Who determines the product price points? The company? Who controls your discounts? The company.
People join MLM’s on the promise of freedom, but you discover pretty quick, you don’t have much freedom at all. You aren’t really “running your own business” as promissed. You have almost none of the same rights as a business owner.
10. Bad Reputation
Most people who know about any of these companies already have a sour taste in their mouth. That means you start day one fighting an uphill battle. Talk about setting yourself up for disappointment!!
Listen, I know there are people who have been successful, but I guess it boils down to this: If a business opportunity sounds too good to be true, trust your gut.
This kinda sums it up for me: