What is Multi-Level Marketing?
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…
- 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.
Multi-Level Marketing Resources
- 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…