How To Choose The Right MLM

Multi-Level Marketing. Direct Sales. Network Marketing. Whatever term you want to use for them, you cannot exist in America without having heard of at least one. When I was a kid, Tupperware, Mary Kay, and Amway were all the rage. As an adult I’ve watched the rise of Young Living, Plexus, Avon, LulaRoe, and so many others. I’ve watched friends truly make an incredible income to become debt free and support their families indefinitely, and others be financially destroyed by others. So what makes the difference? What makes an MLM a company you can truly succeed with? It’s up to you.

I have friends who immediately say, “MLM? Ew, no. Pyramid scheme. I don’t care what they sell. I’m not buying.” Other friends claim they shop almost exclusively from MLMs because they’re, “Patriot-owned, all American, best deals on everything we cannot grow or make ourselves.” Most people fall somewhere in between. I am most people. I’m cautious. I know how “pyramid schemes” work. I also know the differences between true pyramid schemes and a legitimate MLM. Some of you just snickered when I called MLMs legitimate. It’s okay. I get that, too. I am also a researcher, a lover of data- the real kind, not the kind a company pays a research firm to publish. According to NerdWallet(an independent finance and research firm), studies being conducted for the last five years have shown that one in every 13 adults is involved in an MLM- an industry to makes more than $35 billion annually. Those same studies also show that less than 25% of participants actually make a profit on their efforts through MLM businesses. So what makes the difference? What’s different about those 25% that put them in the black financially? After 14 years as both a consumer and a “participant” of MLM businesses, let me share what I’ve learned and whether or not I’d do it again.

The huge draws these days are to be able to work from home, or all you need to earn an income is a smart phone, no overhead, and similar start-up income perks.

You only need a phone!

Make money anywhere!

Get paid while you watch your kids play!

Opportunities are marketed to moms with littles, boasting that you can earn an income from your phone while your kids play, or to busy blue-collar workers looking for THE PERFECT side hustle that doesn’t take precious time away from enjoyment. I’m not saying they’re wrong, I’m just pointing out the typical marketing used.

But what is the truth? Can you REALLY earn money through an MLM, or are they all scams?

The honest truth is that it depends. On a lot of things. I’ve lost a lot of money through an MLM, I’ve made just enough to pay for what I wanted to purchase monthly with little to no effort, and I have put in part time level hours and made really good money. Here are the three keys I found to be true(and decades of financial data corroborates) about making an honest-to-goodness income on an MLM side hustle without being THAT person we all know(and kinda’ cannot stand) who farms her friends list for cash or preys on the desperate:

Research ALL the products- not just one!

We’ve all seen it: Try that crazy wrap thing! It’s miraculous! You’ll lose literal inches overnight as our hemorrhoid gel on saran wrap temporarily shrinks the capillaries on the surface of your skin! Even if this did somehow manage to be a tool you benefited from, eventually you have to sell something besides $25 wraps to earn any meaningful money and recoup your costs. Same goes for essential oils, pink, caffeinated appetite suppressant powder, and protein shakes. Know the products you’re committing to sell, and know HOW THEY WORK. The number of times someone approached me about a health supplement only for me to realize through 1-2 questions on the product that I actually knew more just in general knowledge about the components than the person promoting it to me is mind-numbing. Know the products, whatever they are, and know if YOU want to put your name behind every one of them.

Research the company structure

Not every company is the same. Some MLM’s truly are pyramid schemes. Some companies don’t care about how items are sold, they simply pressure representatives into buying more and more and more inventory every month to ensure they have the best, newest, and freshest whatevers. Meanwhile these representatives are left with boxes on boxes of drink mix powder, skin wraps, and wild-colored leggings, what have you, and told they’ll make their profit when they sell their inventory. Others tout that there’s no need to have inventory on hand, but it’s a bonus if you do because then you can market it in various ways only for representatives to find out it’s next to impossible to get sales without having the goods for people to flip through, put their hands on, experience, etc, before they decide to spend their hard earned money. That leaves the seller in a bind: Try to find ways to market the goods without carrying inventory, or just give in the the, “easier money” by buying inventory up front. The rarest are the companies that you truly DO NOT carry inventory for, they simply use representatives to use their products, spread the word, and drive customers into the website. What works best for you?

Research the income structure

There’s a lot of talk about getting paid, but little bones being shared: HOW MUCH are you paid and what did it take to get that? What’s the percentage like and what kind of sales do your efforts need to drive to earn that income? Almost exclusively the first line is, “Earn the products you love for free by getting this TINY bit of sales.” That could work, but is it worth your time? Statistically, only about 10% of people who try any given product will be a repeat customer. That means you cannot rely on getting people interest once and seeing them return. It’s unlikely, no matter how rock-solid the products. Are the products you use from the company worth the consistent, daily effort of making those sales over and over? On top of that, with the exact percentage of commission earned on sales, how much in actual sales would you need to make to earn an income that makes this a true side hustle? Add in building a team of salespeople under you that you earn a miniscule percentage on income from, and it gets really complicated really quickly and far less lucrative than they claim a team earns you. Really dig into the meat and potatoes of income structure and decide if it’s worth it.

Ultimately, it all comes down to whether or not the products hold the consistent value required to be worth your time and effort in being a 24/7/365 salesperson for the company. You’re giving up precious time- the ONE commodity that not one of us can earn more of in our lifetime. The MOST finite resource. Is it worth it? Can you truly financially absorb the investment if this company dies tomorrow and you’re left holding the bill with nothing to show for it? I deeply value being wise stewards of our hard-earned money, as well as not sacrificing precious time with our families for a few dollars. CAN you earn an income from your phone? IS IT WORTH IT for your children to see you on your phone all day instead of actually PRESENT in their lives. Remember that physical presence is good, but if your face is attached to a screen, your actions are saying, “This device is more important than you right now.” So if we’re physically present but using our side hustles to tell our children(who don’t understand the nuances of what we’re doing), our spouses, our friends and family that whatever on our devices are more important that truly BEING with them in both body AND mind, is it worth that sacrifice? Those are some deeply personal decisions that these really practical tips will help you flesh out an opportunity and decide.