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This is a topic I get asked about often, so I'm going to try and pack a lot of information into this post. If I miss anything, feel free to ask. FIRST though, you need to know that I am NOT in an MLM, I do not have any affiliations with anything I mention. I am simply a mom who WAS in an MLM (or two) and can, hopefully, give you some unbiased information to help you make an informed decision. (read more)
Let's start there. Who am I to talk to you about MLM's? What do I know about them?
Quite a bit, as it turns out.
In May of 2012 I joined Beachbody as a "Coach". My youngest son was three years old, the baby weight had sort of come off, then come back on, and I needed to get on track with my fitness. Since I was going to be using the Beachbody products and workouts anyway, I figured coaching might be a nice way to garner a side income.
Without going into great detail, I joined, I built the business for three years, and then in March (I think) of 2015, I decided it wasn't for me.
I'll get more into that later on.
In July of 2015 I joined Younique. I love makeup, I wear it daily, so I figured this might be a better fit. By November of 2015, I was so distraught by the vitriol rolling around Facebook with the elections that I decided I was done with social media, thus ending my MLM career.
You see me on social media now, but only when I post things regarding the blog or my books. If you'd seen me three years ago, you likely wouldn't recognize my page. :)
So, that's who I am, and that's how I feel I'm qualified to give you the low down on what you REALLY need to know before making your personal MLM decision.
Now, let's answer some of your burning questions!
IS IT A PYRAMID SCHEME?
This was one of the first questions I'd get every time I approached someone about my "MLM Opportunity", whether it was Beachbody or Younique, as soon as you started talking business, "Pyramid Scheme" would rear its ugly head.
In a nutshell, no, it's not.
BUT, depending on the business, it can feel darn close to one.
With Beachbody, (and with any MLM I've ever seen) you simply could not advance in rank unless people in your direct downline (people you'd brought in to the company) also advanced in rank. The idea here is that you aren't just selling things but that you're also leading a team.
The reality of that, for me, was that three years and a ton of work later, I was still very low on the ladder, despite a personal income of around $30,000 a year and consistently being the among the top sales people and top recruiters on the team.
As far as rank goes, the sales didn't matter as much as recruiting people who would ALSO sell and rank up, and while I really hope I don't get in trouble for saying that, the fact of the matter was that unless you recruited, and those recruits advanced in rank themselves, your own ability to advance in rank was extremely limited.
But, on the flip side of this, I was low on the totem pole and making $30,000 a year, so if rank really doesn't matter to you and you don't care about the bonuses, etc. that come with it, income is income.
That said, my $30,000 a year was after I was three years in. I think I made $6000 my first year, $17,000 my second year, and $30,000 my third year. This was with consistent, daily dedication and a LOT of hard work.
Let's move on to the second MLM I joined.
Younique was a little different, and in my opinion, a little easier to understand. Your rank was based on the sales of you and your entire downline. As long as you had a few people in your direct downline making a minimum amount of sales each month, you could go very far with rank and bonuses.
The difference between Younique and Beachbody was that Younique did not require your people to be a certain rank until you were in the very highest tier (Black). Up to that point, some of your downline only had to sell a certain amount per month.
So, you had to sell $250 (I don't really remember what it was, so I'm making this up), and you had to have at least one person in your direct downline also sell $125, AND your whole downline (you included) had to sell $2000 in total for you to reach Lavender (not really a rank).
It's clear as mud, right?
The good thing about Younique's style was that I had an easier time ranking up simply because a lot of people who come into an MLM do want to sell things, though they may not necessarily want to put in the effort to build their own team.
A Pyramid Scheme basically means that you get paid based on recruits. I've yet to see an MLM that pays you per recruit. You might get a portion of the money they spent to join, but since the MLM gives them product when they join, we're calling that a commission.
All that said, I have yet to see an MLM that lets you advance based solely on your sales, one in which you could rank, advance, and be awesome without recruiting one single other person.
Admittedly, I haven't looked, but that's something important to think about when you think about doing an MLM, and it's the thing we'll talk about next.
YOU CAN'T GET THERE ALONE
That's a little misleading. You can "sort of" get there alone. You can sell your product and get your commission (probably around 25% if my experiences are anything to go by), and that's all well and good.
If you sell a $100 product and make $25, awesome! At first you might have friends and family that are really interested either in the product or in supporting your new endeavor, but that honeymoon is going to end.
If the product you're selling is not consumable on a regular basis, you are not going to have regular customers. The only way to get regular customers is to branch out, make new friends, talk to more people, and...recruit.
It's fine if you think you just want to sell to your immediate friends and family, make a little extra money, and let it be, but be sure to read the fine print of your chosen MLM. For many (if not all) of these companies you have to sell a minimum amount each month in order to stay "active". Meaning if you don't sell $150 of product each month, you don't get the commission when you do next sell the product.
That brings us to my next point.
BE A PRODUCT OF THE PRODUCT
It's pretty simple.
Don't sell makeup if you don't like to wear makeup.
Don't sell fitness products if you would choose a root canal over a burpee.
Don't EVER SELL PRODUCTS that advertise "weight loss with no effort". I mean it, just don't do that, it's nasty.
If you love fitness, or are at least serious about being fit, and you're going to be using Shakeology anyway, then heck yes, become a Beachbody coach!
If you love makeup and you love Younique's foundation, then for sure, rep it!
If you already use the products, or can see yourself using them long term, and do not mind talking about it on social media, then joining that MLM might be a great fit for you!
If you're thinking of joining an MLM where you're promising things that just aren't possible (again with the stuff you can eat, drink, sprinkle, to lose weight), don't do it. You know it's not real, I know it's not real, and those people who are desperate enough to buy your Arizona ocean front property will not be your customers for long once they accept what they knew before they bought your product.
If it sounds too good to be true, it is.
MLM's will absolutely require that you personally spend a certain amount of money each month to stay active (as I mentioned earlier) so be sure that your chosen MLM sells something you are 100% going to use.
And, that cost of doing business brings us to the next thing you need to think about.
WHAT DOES IT COST TO START?
I'm sure most companies have different options, but plan on an initial expense of around $100.
If I remember correctly, Younique was $100 to sign up, and they gave you a kit full of product so you could start showing it off right away.
Beachbody had a couple of different options, but the most popular was that you could buy a "Challenge Pack" and become a Coach for free. That was more in the $140 range, but you get the idea.
With both companies, you also had to spend a minimum amount each month, again around $50-$100. I'm pretty sure with Beachbody it meant that if you got Shakeology each month, you were good. With Younique, I think you were good if you bought a bottle of foundation each month.
Basically, they want to make sure you're buying what you're selling. You're not only their reps, you're their customers.
The great thing about MLM is that the cost to join is relatively inexpensive, making it viable for most people.
However, that's also the bad thing about MLM, which we'll talk about next.
TURNOVER IS HIGH
I was just about as "all in" as you could get with Beachbody. I went to Summit, which was their yearly meeting to pump everyone up, and I did that three years in a row. I listened to every team call, every call out of corporate, every training episode. I did it all.
And yet, three years later, I still quit.
Younique was the same. I was gung ho. I hosted makeup training classes, went live on Facebook constantly, did all the training, advanced super quickly, went to Convention (their yearly meeting), etc. But, less than six months after starting, I was out.
With MLM you have no carrot and you have no stick. If that doesn't make sense, it just means you have no good incentive to offer your downline, and you have nothing to take away if they don't perform.
It's unlike any other business for that very reason. You could pour hours upon hours of time into people who say they REALLY want it, only to have them bail when they decide they're over it.
You don't get that time back, you don't get paid for your effort unless that person sticks around and becomes a fantastic rep, and you never know how it's going to work out.
All you can do is keep reaching out!
YOU HAVE TO POUR INTO PEOPLE
Think about what you want in an upline (the person who brings you in to the business). You probably want recognition, appreciation, one on one assistance, etc.
So think of DOING all of that for the people you bring in to your organization.
They want you to talk to them, to spend time on them, to tell them things will work out, to listen to them vent.
The main reason I quit my first MLM was that I was spending so much time on it that I felt like all my kids heard from me was, "Not now, I'm busy." As a SAHM and homeschooler who gave up her day job to be home with said kids, that rankled.
I thought makeup would be "easier" than fitness, but no, turns out, no. :)
Building a solid team takes a LOT of time and effort. You are going to listen to a lot of people whine. You're going to have customers blame you for things, especially if what you sell has to do with fitness. They want you to listen, and they want you to fix things.
Basically all the things you want from your upline, your downline wants from you, and if you don't deliver...
They'll likely blame you.
Just like if you don't get what you want from your upline, you'll likely blame them.
It's just that kind of business. You have to be willing to take responsibility for yourself, while listening to your upline, but you also have to be willing to spend time on your downline.
Which brings me to my next point.
PICKING AN UPLINE
It can be very easy to join with an upline because you're friends. This person sold you your Jamberry nails (or whatever the craze is these days) and you join with her.
What happens if you join and you want to hit the ground running, but she's just sort of in it a little and doesn't have anything to teach you? Of course the company itself will have training, but that's no substitute for a good upline.
My recommendation would be to do your research before joining. Really think about it, look on YouTube, see who has the good training videos and talk to that person.
When I joined Younique, I joined with a girl I didn't know. She's the one I bought makeup from that first time, and she was very sweet. Only, when I went to the team site to do the training, I noticed that all the videos were links to YouTube done by another girl who wasn't on the team at all.
That bothered me.
I quit, waited out the months I had to wait to sign up again, and rejoined under the girl on YouTube. It's one thing if you've got a team who has an upline who's awesome and is sharing that down (which they absolutely should do), it's another thing if you're joining a team who doesn't have it together and is just sort of winging it or borrowing another team's stuff.
It might not feel important when you join, but if you think there's any chance you really want to build your MLM into something big, do your research before you commit.
If you join under someone who doesn't really use the products, or doesn't seem to care about the business, it can feel like a kick in the teeth later on when you know that they're benefiting from your hard work.
If you want to be successful in an MLM, you have to be willing to put yourself out there on social media.
When you put yourself out there, you get trolls.
Don't think it won't happen. It will totally happen.
If you aren't thick skinned or if you just aren't comfortable communicating with the world on a daily basis about your product, your life, etc. MLM is not for you.
It's a funny thing, but I feel like once you do one MLM, it's super easy to do another. You might love fitness and makeup, or makeup and wine, but chances are your chosen MLM is not going to be okay with you doing more than one thing. They don't want you using your social media account for anything but your business with them.
Check the legal jargon in your MLM before you sign up. I have heard of people having their Facebook accounts cancelled because their MLM was unhappy when that rep either quit and moved on, or when that rep decided they wanted to dip their toes into more than one MLM's pool at the same time.
Beachbody had a no compete clause. You could not rep anything at all other than Beachbody once you were over a certain rank (a low rank), and that included having a "party" for a friend who had an MLM product you liked. If you hadn't hit that rank yet, you could have that party, but it better not be for anything remotely close to what Beachbody sold. They even had their own skincare line, so makeup, lotion, beauty anything, was out.
There goes your Mary Kay party where you can earn free stuff!
Wave bye bye to the free stuff.
Really though, MLM's are very serious about this these days, so again, do your research.
THEIR POLICIES MAY CHANGE
I'm going to mention this, but I really don't feel like it's that big a deal.
An MLM can and will change its policies, and there's not a thing you can do about it. Your commission could change, the way you advance in rank could change. If they give you leads, the criteria for that could change. I've seen all of these things happen, it's just common as an MLM grows.
But, all of the same things could be said for any brick and mortar business.
YOUR TRIAL PERIOD
I'm wrapping this up, but finishing with what I think is the most important thing.
Most MLM's will let you have some sort of trial period. A time in which you can sign up, try it out, and then cancel and get your money back if you don't like it.
For many companies it's 30 days.
Find out how many days it is for your MLM then put a note in your phone reminding yourself to evaluate things about a week before your time runs out.
If you're not feeling it, get your refund, send back your stuff, do what you need to do, but do not stay locked in.
I can't tell you how many times I said this to people. That one little note in your calendar could save you the $100+ you spent on something you thought you loved, but turned out not loving so much.
MLM is great. It's a great way to be able to stay home and make money, but it's not easy, and it's not something you can sort of do if you want to build a full time income.
If you want to make money, you have to put in the time and effort, even when you don't feel like it. This will include team training, online gatherings (parties, fitness challenges, etc), constantly looking for new people to talk to, and finding new ways to connect with people who might love what you love.
If you're thinking you'll do it to make a quick buck, that might work at first, but once you run out of your friends and family, the well is going to run dry unless you've done your work and started to branch out.
As long as you know what to expect going in, I have no doubt you can have a happy and rewarding MLM experience.