Every generation must re-learn that MLM (multi-level marketing or network marketing) is extremely profitable—for a tiny percentage of participants.
And that is okay.
One estimate is that 2% in any MLM organization make outsized profits, and the rest lose money. That estimate might be high or low.
People become part of the 98% if they (1) care how their actions affect other people, and (2) are not born to sell. The 98% are marks, or targets, for the 2%.
Yes, anyone can learn to sell. But to sell complete lifestyle change, to sell religious conversion, requires a competence package that few possess.
I can sell, and have some of the other necessary skills, and I lost $70,000 in one year. The company continually changed policies to benefit the 2% and harm the 98%, because they knew the 2% were their real customers and the rest of us were cannon fodder for the 2%. I realized that I would never become part of the 2%. So I quit. Weirdly, I was again convinced to try another of those companies a year later.
Here is the good news. Almost everyone who tries to make money in MLM becomes a better person. I have seens hundreds of people try MLM, and they develop skills:
* ability to emotionally expose themselves and talk to people
* basic self-improvement, sometimes even improved personal hygiene
* accounting and accountability
* basic marketing mindset
* long-range planning
* ability to discern good and bad opportunities
So even if you lose money, you still receive benefits (skills) that you can use in legitimate spheres of your life.
Here are some definitions and clarifications.
MLM scam: Some of these companies focus on product, and compensate distributors for selling products. They are legit. But if a company’s focus is the payment plan for recruiting, it wants you as cannon fodder to keep people at the top profitable. The legal definition of Pyramid Scheme involves having a real product or not. If the product is a liter of fruit juice for $40, be suspicious.
Personal direct marketing: These companies are almost 100% product focused. They are not MLM. Pampered chef, Avon, and various candle companies do not offer a path to wealth, but are legitimately ways to earn side money at home. (Some scams do offer huge profits for doing very little work.)
Cellular Level: A common product claim from MLM companies is that their vitamins or fruit juice benefits your body “at the cellular level.” Clarification: Everything we eat benefits or harms us at the cellular level. Organic kale and lead paint chips affect us at the cellular level.