Photo by Rob Boudon on Flickr
I believe that there is no path to riches in multi-level marketing (MLM) for the average person. I think that joining an mlm opportunity is a huge waste of time, money and effort. There was an article in USA Today where they took a look at Amway where they said:
Even proponents of multilevel marketing say the cases and probes underscore one of the growing problems in the industry: It can be very difficult, if not impossible, for most individuals to make a lot of money through the direct sale of products to consumers. And big money is what recruiters often allude to in their pitches.
Think about this for a moment, do you really think that people are going to buy their toiletries or water filters or whatever else from you, when they can buy them at the supermarket, or Wal-mart for a fraction of what you’re selling it to them for? That means, that the only realistic way for you to make money, is by recruiting more people under you to come in and buy stuff from you so they can try to sell it.
Only, they won’t sell stuff either because they don’t know anyone that would buy from them. So, they recruit someone else, and so on and so forth.
A business professor named Roland Whitsell, was quoted in that USA Today article as having said:
“The primary product is opportunity. The strongest, most powerful motivational force today is false hope.”
According to Whitsell, actually, according to documents released by Amway itself an “active” distributor earns an average of $115 a month.
But wait, there’s more!
According to Amway, 0.26% of their distributors make more than $40,000 a year. Amway says that roughly 60% of their 600,000 North American distributors are “active.” To be “active” you have to try to make one sale per year or attend one meeting a year.
One sale a year.
Sure, you can dismiss a lot of the earnings numbers by saying that it all depends on how much effort someone puts in. Like anything else, your mileage may vary, but that’s not what the mlm recruiters tell you when they’re pitching you on the idea of joining the ranks.
What does our government have to say about people selling false hope and magical unicorns? The FTC prohibits making misleading and deceptive claims about how much money someone can earn when they join your “flopportunity.”
The FTC does what they can, but it seems to me like the FTC is out manned and outgunned when it comes down to enforcing the law.
Every time I’ve gotten pitched an MLM, one of the first things people tell me in order to get me to join is “you could make $$$…” or some variation of that. Sometimes, they don’t even bother mentioning what the product is until almost the end of the pitch.
Bottom line is this:
Is it possible for people to make money in MLM? Yes, it’s possible. Is it likely to be enough money to make a living off of? No, not very likely.
So, in my opinion, multi-level marketing, aka MLM, is a waste of time, money and effort. The only way an MLM opportunity could possibly make sense, is if you’re selling a product that people need or want and they can’t get it from anyone but you. Even in that situation, I have my doubts that you’ll be making money for long.
No matter what the product, no matter how many anti-acid colored cars you see driving around, spending time, money and effort in an MLM is a bad idea.