Is MLM A Viable Option To Make Money Online?
Hey guys, and welcome to my post on a subject that may be a little controversial to say the least - making money online with MLM. Now, before you scroll straight to the comments below to tell me how bad MLM is, just hear me out as I have a theory.
Of course you can still do that but I this is something that I have been thinking about for a whilst and feel it is time to release it to the wolves!
What is MLM?Ok, so before we get into my theory, let's just recap what we are talking about here. Multi Level Marketing (MLM), often referred to as Network Marketing, is the sales process undertaken by many companies where they offer commissions and financial bonuses for selling their products.
Their main MO however is to entice members to recruit others (usually friends and family etc.) to also sell the products in return for bonus commissions on their sales - A.K.A their downline. This over time has given the industry a less than favorable reputation as a pyramid scheme and nothing more.
Most commonly, MLM companies operate within the supplements, weight loss, beauty and essential oils markets.
Fine, what is my theory?Here it is - did you know that many of these companies will pay commissions of up to 25% on base sales without the need to nurture a downline?
And that is it ! 25% and no need to recruit your friends! Think about this a little further - most affiliate marketing programs in any of the niches mentioned above will pay between 5 - 10% per sale that you refer. MLM is 25%!
Sadly with anything to do with MLM, there are a few hurdles to jump over and unlike affiliate programs, you may have to do a little research to find the right option for you. In short, you will need to do the following:
Find MLM companies - Look for options within the area that you wish to work in (some even deal with other popular options such as wine, coffee and homewares as well.
Check their commissions - look for something of at least 20 - 25%
Check their sales rules - this is where you need to do your research. Any MLM you choose here must:
- Allow you to earn sales commissions on sales without the need to recruit others - see next section.
- Allow for online sales (you are trying to avoid running Tupperware parties here)
- Not require personal purchases to earn commissions - i.e. you don't want to have to purchase products to qualify for your commissions
- Allow you to join without having to find a sponsor - this may not always be a problem but it does usually mean you will have someone hassling you to 'build your business'.
Also, avoid anything with joining costs above a small fee to create your personalized website to drive sales to as well.
This is another problem with many MLM companies in that they don't readily provide any of the information that I have outlined above so add this to your list of things to check.
However if you can get the compensation plan (either on the website or via a simple web search) then look for a headline along the lines of "Personal Sales Commissions" or the like.
From here you are looking for something that has a clear outline of what the commission is and how much you need to sell to earn it such as:
Sales
- $0 - $499 = 20%
- $500 - $999 = 22%
- $999+ = 25%
The key is the first $0 - that means there is no minimum. The compensation plan should also outline joining fees etc. as well.
What do you do then?Now you would run it like an affiliate marketer. That's right - build a website, write reviews, tip posts and everything else you do as an affiliate marketer. Except here you are discussing the products sold by your MLM company and your affiliate links are taking your readers back to your personalized website which manages the sales and shipping just like affiliate marketing.
ConclusionSo that's it! That's my theory. It was obviously a very quick run through and there is a little more to it. However I have seen it work and think that if you have a background here then it could definitely be a viable option.
Noooowww you can comment! Go!
Paul
Recent Comments
20
Why would you promote products that are double or triple the price of products not from an MLM?
Mainly for the higher commissions to be honest. In the same regard as high ticket items I guess. You would definitely have to highlight the benefits to make the sale I am thinking too.
Great theory, but I'm yet to see many / any that operate in the way you describe. I'm sure they exist but I have no idea what they are. Could you give some examples of MLMs that operate this way?
I'm personally not into MLMs at all ... although I do know a couple of people who make HUGE money with them.
Cheers
Melissa
Compliment in your blog and I was in one of the most perfect mlm projects and still running ! I don’t sell any product but handing out a free app and made it as customer card connected to a online shopping community and this gives new customers many benefits for free! It’s like customer card and save all benefits in one place ! It’s difficulty was that people get this app for free and directly after use this affiliate link they have to register the app and this made people sceptic because based on trust ! It’s a fun thing to do and it’s also a good way to build a network for business ! If you want more details about this feel free to contact me ! Greets Jeroen de Jong
Interesting…my wife once did an MLM, but they wanted you to use their website — so I am unclear how that would work if I built a marketing site for MLM products.
It sounds like a great theory, but I'm yet to see many / any that operate in the way you describe. I'm sure they exist but I have no idea what they are.
Have you been successful with using a site that you have built in WA and promoted MLM products?
Could you give some examples of MLMs that operate this way?
Thank you!
-Mike
Thought-provoking, indeed, Paul! I have been in some of those groups, and it left a bad taste in my mouth.
Jeff
Hi Jeff!
Just read your comment and I'd like to know why, I mean, what was it that you experienced that left (a bad taste in your mouth), as the saying goes.
In a few words, Mustafa--Amway, Excel, Herbalife, and a few others dabbled in. Never really made any money, but sure spent a lot. Just not for me.
Ah.. I know thoughs, direct selling products that you must buy at pretty expensive prices.
It happened to me too, thanks for the reply Jeff.
Yes, it is overinflated. If you are at the top, you can make some good money, but the further you go down, your downline gets a pittance.
Yeah, I hear that Jeff, plus a person can get stuck with the inventery if they dont sell them.
I had a friend in one that he struggled and struggled to sell any of the products.
I prefer the mlm's that dont require you to hold anything, to stock anything in your house.
So I went with an education one, to promote, which still has its costs but not the hardiest thing to promote plus the benefit of getting the education they teach for free depending on the compensation plan.
I dont think I would ever enter into any of the ones that have these inflated prices and products to hold.
I know what you mean, Mustafa! I still have a few Amway products that I am stuck with, since they could be acquired at much less cost in the open market and those products were usually better too. That is another way the upline makes their money, since their downline has to purchase the products to sell.
Jeff
Yeah unfortunate situation that Jeff.
Thats some of the reasons the industry of MLM has such a bad name for its self.
See more comments
I have been in multiple MLM’s. I’ve never been very successful. But the model (used to be) intriguing to me.
Generally, speaking, the products are usually over priced, and the commissions are very small. Also, the company is usually have pretty restrictive terms of service.
One thing that MLMs is do very well, is host conventions.
There are a lot of people that make money off the industry by offering training or systems to help people grow their MLM business.
It is an interesting industry, that seems to keep on going like the “ever ready bunny”, even though there are a lot of negative attitudes towards the MLM pyramid style of business.
They are very good at flying just above or just below the FCC radar.