Multi Level Marketing : A Review of The Good, The Bad and The Ugly of MLM

The MLM Pyramid
The MLM Pyramid

Making Money with MLM Companies

After I put up the online options to making money sitting at home, I got feedback from my not too net savvy friends saying that it was beyond them. So I went off to hunt for more home based business options. That's where I found MLM home business options.

MLM or Multi Level Marketing is a home business opportunity offered by a number of companies today. In this hub I will try to place the pros and cons of such a business in an objective manner.

Here's how the system works

In most of the cases this is how it will play out. You get recruited by a member of the distributor chain from the company. Now you use the products yourself, and sell them to others. This gives you instant income on each product that you sell.

If you wish to increase your income you have the option of recruiting more people on your down chain. Then the sales that they generate will also generate a profit for you. So the more people you have on your down chain the more money you make. At least in theory.

This is also known as the pyramid business model. In which the person placed on top will make the most money, then the next level and so on. In most cases the new recruit is actually working hard at selling and making money for people on the up chain.

It takes time to have your own team put into place below you and many people don't bother to make the effort. They end up feeling frustrated with the system and quit the game before they really become big players in it.

The attrition rate for these companies is very high. With such a high turn overrate it is natural that there are very few people patient and persistent enough to actually make good money from the company.

Top Ten MLM Companies

The ten companies that I have listed here are all established brands with a multi national presence in the world.

Herbalife : This company sells herbal weight loss products and is associated with the slogan "Lose weight now! Ask me how." Mark Hughes established the company in Feb 1980. He died in 2000 at age 44 of a drug overdose.The company was taken over and now houses its headquarters in the Cayman Islands. It is operational in over 65 countries.

ACN Inc. : This company is the world's largest telecommunications provider. Founded in January 1993 as the American Communications Network it was renamed ACN Inc. when it went global. It is now operating in 20 countries world wide and has its headquarters in Concord, North Carolina. Its products include phones, mobiles, internet services, satellite TV and home security solutions.

Reliv International : Robert and Sandy Montgomery started Reliv International in 1988 to help people gain control of their lives. They currently operate in 5 countries and are looking to expand. Products include variations of the basic food supplement powder developed originally by microbiologist Dr. Theodore Kalogris.

Arbonne International : Started as a skin care products company in 1975 in Switzerland by Petter Morck. Came to America in 1980. Now products include weight loss and nutrition products besides the skin care products based on botanical principles.

Market America : The online "unfranchise" from which you can make money! The company was founded by James Ridinger (of Amway fame) in 1992. Currently operational in 5 countries it sells a wide range of products from its website. Commissions are earned by activated members who have two active member below them.

Nikken : A Japanese company that focuses on wellness. Its magnet therapy products are the cause of its popularity and scam reputation. This company was founded in 1975 by Isamu Masuda. It came to America with Tom Watanabe in 1989. Currently operates in more than 35 countries.

XanGo : Its main product is the XanGo Juice which is made of the juices of eight fruits.The Mangosteen juice being its primary additive and said to have fantastic healing and nutritive value. The product is currently under the FDA's scanner and is yet to get a clear chit.Currently the company is operational in 12 countries world wide.

Primerica : They sell insurance and mortgage and other related financial products. You will basically become an independent banker for them. The company was originally started in 1977 by A L Williams and is today a part of the Citigroup. It has its headquarters in Duluth, Georgia. You will need to pass an exam to work with them.

Oriflame : It is again a skin care and cosmetics company which operates in 61 countries globally. It is not yet operational in America. It was founded in Sweden in 1967 by the brothers Jonas and Robert af Jochnick along with their partner Bengt Hellsten. In the last 40 years the company has seen great financial success.

Carbon Copy Pro : The latest in the MLMs to hit the scene CCP is the online version of an MLM company. You need to generate traffic to their site and each conversion will give you some money. If you want to make more money you will need to pay and join up a sister website.

What do they have in common?

They are all MLM companies whose products are available via their consultants.These are not to be sold over the counter in shops. The distributor network needs to be increased by you so as to gain financially from the company.

The Good

These companies offer training and a support system which is needed for any business opportunity. The sense of community is great and you will always have some one to help you out with your queries and doubts.

There is no need to be highly educated or qualified to join most of these companies. A typical weekend training is sufficient for you to start your business. The companies also help you get started off well with a few basic products in the starter kit.

The Bad

You will need to sell one on one to family and friends. This can be a bit difficult and you may find people avoiding you as they don't want to buy from you. It can seriously test a friendship if you start seeing your friend as nothing more than a sales prospect who is yet to be converted.

You work as much as you want. You need to be very disciplined about maintaining work schedules and sales volumes. Your income will soar or tank in the month totally depending on how well you work in that particular month.

The Ugly

Many ex-distributors will become online competition for you. These people were not able to keep up with the demands of the business and quit. Now they are hoping to get back some cash from the number of products they are still stuck with. So they sell them online on e-bay or other sites at a reduced rate.

Also there is usually a clause of generating a certain level of sales each month to be eligible for company payouts. This can be quite tough in the beginning when you don't have a set system and clients in place. So you tend to buy products that you do not need and increase your stock. Blocking money in the process.

Home Business

As a home business it can be difficult to run. However with the exception of CCP you can do this with no help from the internet. So if you are loathe to use the net, this can be a good option for you. Specially if you are a social person with a large group of friends. Just guard against being overzealous or you might find the number of friends dwindling.

Get more Work From Home Ideas here.

If you are a busy mom you can read this hub as well for Work from Home Ideas for Busy Moms.

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Comments 20 comments

Kmadhav profile image

Kmadhav 7 years ago from New delhi

I got offers from many MLM companies for the agent but I refused......Few fraud companies are also running on the name of MLM business


Dale Mazurek profile image

Dale Mazurek 7 years ago from Canada

Very good hub. I was once in MLM and did not bad. However I got sick of a few things.

1. Having to beg people to sign up

2. The rules always changing

3. All the upsells. ie. leads, advertising, distributor packs

There are many other things I could mention.

Some people do very well in MLM and kudos to them. The one thing I am quite sure of is that I will never be involved in another MLM oppurtunity ever.

For me its affiliate marketing

Cheers


Reena Daruwalla profile image

Reena Daruwalla 7 years ago from INDIA

What no Tupperware!!! But seriously though, this can be a way to lose friends if not careful.


cashmere profile image

cashmere 7 years ago from India Author

kmadhav, it is difficult indeed making money from such schemes.

Dale, I'm yet to explore affiliate marketing. maybe you can do a hub to explain it to me.

reena, yup clean forgot about tupperware.


Philipo profile image

Philipo 7 years ago from Nigeria

MLM is really not easy to market. You need to convince people to join your team. Have you heard of http://www.holidaysandcash.com/onyemerekwe. It is also a good MLM. Presently there are in over 60 countries. One good thing about them is that once you can get 2 people to sign up under you, you start getting weekly payments. Also, they pay you in Dollars and you withdraw your money anywhere in the world where ATM is available.


BundleBoy profile image

BundleBoy 7 years ago from Atlanta, GA

Got to agree with Reena. You have to lose your friends if you do a MLM thingy. We used literally run from a former colleague of ours. He would try to talk us into Amway all the time. Nice hub Cashmere.


BrianS profile image

BrianS 7 years ago from Castelnaudary, France

I would not want to do this.


advisor4qb profile image

advisor4qb 7 years ago from On New Footing

We always avoided the Amway family member, but we loved the Avon lady--she left free samples!


dianacharles profile image

dianacharles 7 years ago from India

I agree with the above comment...I too kept miles away from all my Amway pals. They were always trying to push things. This business ruins friendships.

A great hub...I hadn't heard of some of those MLM's


Kya profile image

Kya 7 years ago

Thanks for this balanced view. Indeed MLMs are a controversial type of job. Some are happy with them, others hate them. You would certainly need a great deal of motivation and passion for the products as well as social skills in order to sell successfully.


cashmere profile image

cashmere 7 years ago from India Author

Phillipo, you wouldn't happen to have a vested intrest now, would you? :)

Bundle boy, I know what you mean, one of my hubby's seniors was also involved with Amway.

I agree with you Brian.

Advisor, free sample or not, run for your life at the start of the sales talk.

Diana, not all of them are active in India, these are mostly America centric.

Kya, you are right, it is very controversial.


Candie V profile image

Candie V 7 years ago from Whereever there's wolves!! And Bikers!! Cummon Flash, We need an adventure!

I know a lot of sucessful people in several of these companies.. It has not ruined our friendships. You've outlined only a few, it would be impossible to list them all. Unfortunately Amway did give people a bad taste, tho some of the products are great. It's all about finding your place in the economy! Thanks Cashmere!


cashmere profile image

cashmere 7 years ago from India Author

Hi Candie, I guess the maturity level of the friends and their enthusiasim levels for the product both contribute to the alienation process. Guess you have good friends.


harish bhist 6 years ago

personally i don't agree with this hub. my reason behind this is i have personally developed mlm ( generation plan ) and use to earn very good income and earned 7 international trips. i also don't agree with the top ten mlm list. the reason behind it is in this hub ma'm has not mentioned any figure(turnover or profit)as such or not given any sound reason behind this list. also i personally don't agree with this hub because all the companies which are listed here don't provide any kind of training and support, that's for sure.


cashmere profile image

cashmere 6 years ago from India Author

Everyone has their own top ten for any category and there is bound to be a dispute with others. Its good that you have had a positive experience with an MLM plan but in most cases it just does not work out.


DonnaKocurek profile image

DonnaKocurek 6 years ago from USA

MLM's sell product. Products people buy every day. As our economy grows worse, and it will, more and more companies will close due to lack of cash and the offset of overhead. The best way to make money is through a small business, at home is best. MLM's also provide people with opportunity. Opportunity is what grew America. And for one, I happened to have loved all those opportunities I've had over the years. As for Nikken, there is much scientific research to validate the magnetic therapy. Magnets have been used for centuries to help people heal faster and this advanced form of magnetic therapy is "pretty", soft and affordable. The other products are also proven and not a scam.


Nickj147 5 years ago

Utter crap.do your research. Learn the facts. 100000 millionaires I'n last 10 years r

Recommended by DTI. Imbeciles who mention pyramids are just plain daft. It is the complete opposite of pyramid sales which was made illegal I'n 1973. That was top down. Nwm is bottom up. Complete opposite


cashmere profile image

cashmere 5 years ago from India Author

Good to have your opinion here Nickj147. By the way were you one of those last millionaires you just referred to?


Ana O'Shea profile image

Ana O'Shea 5 years ago from Dublin

Cashmere your hub is so informative and listing the top 10 MLM's in the world. I am not surprised not to see Amega Global there as yet as they are becoming the fastest growing wellness industry in the world. It is one that is worth looking at Cashmere as there products are built on amized infused technology energy. Also I noticed one of your readers comment on the fact that there was no tubberware - tubberware is fine if you only want to make small money. The one I am after is the big money and that is whay I have gone with http://www.needhelpwithenergy.com Thanks for all your good work. Ana


cashmere profile image

cashmere 5 years ago from India Author

Well Ana I have never heard of this company but I'm sure the same basic principles apply. Thanks for stopping by

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