Are MLM companies worth your time? (Probably not)!

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Multi Level Marketing

MLM stands for ‘multi-level marketing’. Companies that are considered MLM are usually small businesses that sell their products or services through a network of independent salespeople who are not directly employed by the company. MLM companies are also known as ‘network’ or ‘affiliate’ marketing companies.

This article serves as a guide to people wanting to know more about MLMs and if they’re potentially worth your time. Spoiler alert – personally, I’m not into MLM schemes as I’d prefer to have more control over who profits from my business efforts.

How does MLM work?

MLM is a simple business model, which is not much different from other traditional business models. You basically sell something to make money. However, MLM companies provide you the opportunity to make money selling products to people you bring into or recruit for the network. Multi-level marketing is simply a network of referrals in which the person at the top is called the direct seller, while the people below him/her are called distributors. In this simple model, the distributors recruit people who are below them.

How is MLM different from pyramid schemes?

MLM is often compared with pyramid schemes. This is because of the similar business model and the fact that the majority of people who join these schemes do not make any money. This is where the comparison ends. MLM is different from pyramid schemes. Multi-level marketing is legal in all countries and it has clear guidelines and rules. MLM is also based on the products and services, which are usually unique in terms of features, benefits, quality or branding and reputation, that cannot be easily replicated by competitors.

MLM companies usually provide legitimate business opportunities to members. There are plenty of people who have earned a lot of money through multi-level marketing. MLM companies are just like any other small business opportunity.

You’ll have to put in a lot of work to make money with an MLM company. But if you do, you could make a lot more than you would with a regular job. The key to succeeding with an MLM company is to be realistic about what you can accomplish. If you don’t know how to sell, you’re going to struggle to persevere. The focus for any seller in an MLM company should be on building a strong team.

Once you get a strong foundation, you can start making decent money with an MLM company. But you’ll have to put in a lot of work in the beginning to get there.

How do you make money in MLM?

The main difference between a pyramid scheme and a multi-level marketing scheme is that you make money in MLM by selling products and services to people. The number of levels in a MLM network and the number of people needed to be at the top to make money is a lot more than in a pyramid scheme. The more people are involved, the more products and services are sold.

Another very important factor is the training and education on the products and services. The distributors are taught about the products, and are also taught how to sell them. The distributors are also taught about the network and how to recruit new people into the network. This is where the difference between MLM and pyramid schemes lies.

What is the difference between MLM and network marketing?

There is no difference between MLM and network marketing. The terms are usually used interchangeably. In fact, some people think that MLM is a more advanced form of network marketing. In the last few years, network marketing has gained momentum due to advances in internet marketing.

How To Start Your Own MLM Company

Being part of a MLM requires a lot of hard work. The first thing you need to do is to choose the right company to partner with for your MLM business.

How to pick a good MLM company

Choosing the right MLM company is very important, especially if you are new to MLM. There are a number of factors you need to consider. Some of the most important factors include the products and services offered by the company, the support provided to the distributors and the compensation plan.

Here is a checklist that can help you pick the right MLM company.

Products and services

The products and services offered by the company are the most important factor. You must pick the right products and services that will help you build the MLM network. The products and services should be unique and are not provided by competitors. You should also consider the quality of the products and services and the prices.

Compensation plan

The compensation plan offered by the company is another important factor. The compensation plan should be transparent and should be easy to understand. It should also have upsides where it can yield lucrative results based on your performance. You need to look for a compensation plan, which is fair and provides you the highest returns for your efforts. Consider how much of the money you make for the network gets redistributed to others and how they tier bonuses based on sales or recruitment targets.


The marketing and advertising strategies of the company are another very important factor. You must choose a company that has a strong marketing, and advertising strategy. You should also choose a company that has a solid social media presence and has a good reputation. Questions you should be asking yourself are

  • Do the MLM product brands have much weight in the market place?
  • Does the MLM company have exclusive rights over selling the products?
  • What channels are the products most successful in and are these scalable for your marketing efforts?

Cost of joining

You should also look at the cost of joining the company. The cost should be reasonable and should not be too high. You should also check the refund policy of the company in case things don’t work out after you join as a member.

Training and support

It is very important to be properly trained before you start your MLM business. You must understand the products and services being offered by the company and how it can help you build the network. The company should provide you with the tools, information and training you need to build out your team.

You should also be in a position to properly train and educate the new distributors. Also, you need to effectively market and advertise the company’s products and services to the people in your network. You should also understand how networking works and how you can build a larger network.

How are MLM companies different from other companies?

MLM companies say they are different from other companies because you do not have to be employed by the company to sell their products or services. You also do not have to invest nor do you have to buy the products to sell them. In addition, MLM companies are not based on a single person making all the money and have an actual product or service to sell.

Is it a good idea to join a MLM company?

Our short answer is probably not. With the rise of distribution methods such as drop-shipping, and other ways of selling products and services online through Amazon or by using Shopify, starting your business has never been easier. There are also endless online tutorials on how to get started selling goods or services. You can also sell products from any distributor or product you chose from sites like Alibaba.

Thus, the network benefits provided by traditional MLM’s can be seen as being outdated. Plus, why should you work with a substantial portion of your earnings going to others in the network? Hence, why you’re probably better off going out on your own by starting and launching a business where you pick the products and the sales channels and get to keep 100% of the profits.

Wrap up

MLM companies provide individuals with a way to gain experience with sales and entrepreneurship. They may not be a great fit for everyone, but they do provide good opportunities to network with people and learn more about running a business. You may be better off having more control and flexibility of running your own business by not joining an MLM.