Sunday, 17 May 2009

Why MLM won't make you rich

Next time somebody offers you the chance to get rich in their MLM program, ask them these questions...
  • Are you the program owner?
  • How much money have you made in this MLM program since you started?
  • How much money have you spent?
If they're the program owner, the MLM scheme probably will make them rich. If you're among the first people to join the program, it may make you rich too. But even with all this going for you, it's still highly likely you'll lose money thanks to math of MLM.

If they're honest about what they've earned and what they've spent, it's highly likely they've lost money rather than made it. Now sit back and listen to the explanations and blustering that follow such a revelation.

If they've earned money, or are highly profitable in their MLM endeavour, ask them how many people in their downline are as successful as them. And how many fail. Ask them why they think people fail. Compare their answer to the above 'math of MLM' article.

Ask yourself whether you want to end up having to justify this same loss-making proposition to somebody else in a few months time.

The plain fact is, in MLM the math is stacked against you. There is evidence that 98% of the people who join an MLM, pull out almost immediately. That means you have to recruit 50 new people to add one to your downline. How many people can you recruit per day? If it's one, you'll add 0.6 people to your downline per month.

This also implies all or most of your MLM activity will focus on building your downline. If that's the case, what business are you really in? The person selling you on the MLM program will probably tell you its about helping people, or selling some revolutionary new product.

The reality is, you're in the recruiting business. Are you a talented recruiter? If you are, why bother chasing your tail building a downline when you could sell those exact same skills to corporates for big bucks (i.e. become a head hunter)?

Before you leap into the weird and wonderful world of MLM, I strongly recommend you take a look at this revealing inside look at the industry's most successful and best-known MLM.