What is Multi-Level Marketing?
You may also hear this kind of business referred to as:
- Network marketing
- Referral marketing
- Pyramid selling
With this type of online business you’d be a salesperson for an MLM company that sells physical or digital products.
You’d make money by selling the company’s products but the big earnings come from recruiting other salespeople and getting a percentage of their sales, then a percentage of sales from the people your recruits recruit, and so on down the line.
Multi-Level Marketing is one of 19 types of online business and considered a Level X online business, according to our framework.
6 Levels and 19 Types of Online Business
Level 1 = Novice
Okay for side income or beer money, but hard to earn a living.
Level 2 = Intermediate
Best for earning a living online when you’re starting out, but hard to scale.
Level 3 = Advanced
Easier to scale and higher income potential, but you usually need significant investment of time and/or money upfront.
Level 4 = Superior
Even more scalable and even higher income potential, but also more complex / difficult / expensive.
Level 5 = Distinguished
Most complex / difficult / expensive, but the rewards here can be massive.
Level X = Wildcard
These are the misfits. Many aren’t even considered businesses in the traditional sense, but they are all ways to make money online. You typically need a lot of time, money, or luck to succeed with anything here.
How can you make money online with multi-level marketing?
Unfortunately, it seems that making money with multi-level marketing is almost impossible.
There have been a number of studies and investigations into the earnings of MLM participants – Wikipedia has a handy list – and frankly they’re all quite discouraging.
The most recent, large-scale MLM income report I found was a 2018 survey by Magnify Money.
They surveyed 1,049 MLM participants and these were their key takeaways:
The hourly earnings of those surveyed worked out to a paltry $0.67 per hour:
Marsha here represents a typical MLM participant…
Marsha MLM
- Multi-Level Marketer
- $0.67 average hourly earnings
Pros and Cons of MLM Businesses
- Possible – though very unlikely – to earn big money. Usually only happens if you get in early and can recruit well.
- Decent skill-building opportunities, especially in sales and marketing.
- MLM companies are highly controversial and widely considered to be a scam.
- Almost impossible to earn a consistent living this way.
- Good chance you’ll spend more money than you earn.
- MLMers are often encouraged to sell to friends and family, which can make Christmas dinner kinda awkward.
- Many MLM companies encourage you to sell offline rather than online.
Is MLM a good way to earn a living online?
I wouldn’t recommend it.
The odds of making good money here are ridiculously low and, if you ask me, MLMs have too shady a reputation to risk associating yourself with them.
Best Network Marketing Training
This is something of an oxymoron; it’s hard to consider any MLM training to be good since the entire concept is fundamentally flawed.
However, we have reviewed many MLM and network marketing training programs, and these are the “best” of them…
🏆 Best MLM Courses 🏆
Multi-Level Marketing Resources
- Podcast: Season 1 of The Dream
An excellent series that takes a deep look at pyramid schemes and MLMs. - The Multilevel Marketing Cults: Lies, Pyramid Schemes, and the Pursuit of Financial Freedom.
The below video by James Jani is a must-watch for anyone considering MLM…
- Multilevel Marketing: Last Week Tonight with John Oliver
Another video about MLM that’s worth a watch…
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