Multi-Level Marketing (MLM) – Yay or Nay!

In my university days, I had a really close friend. We used to do everything together and we always had a ball together. She graduated a year before me and the moment she graduated; she and a few other classmates got involved with an MLM business. Initially, she was just telling me her experience and then she started persuading me to buy products from her. She would call me at odd times just to promote the products, and I was just so exhausted. So, I gave her an ultimatum – stop harassing me or I will block you. Eventually, she got blocked.

Fast forward, 8 years later.

My mum’s friend keeps wanting to meet me and it’s a bit odd because she always meets mum and me together. One day, I came across a posting of hers on Facebook mentioning that she is a Health Advisor. My antennas were up and on alert. Then she wanted to come and meet me at my office and I was not that keen and turned down her offer. She was insistent and I told her I am not interested. Then, my mum got a phone call that she wants to come and meet my parents at home to do a test and promote her products. To me, personally, MLM is an intrusion into a person’s personal space. For the sake of not burning bridges, many have to accommodate the requests from their family, friends and acquaintances to share on their MLM products. Nevertheless, the above is my personal view on MLM.

To all my friends and readers getting into the MLM world, the business can look really exciting at first with promises of financial freedom, but there are some very real things one needs to understand before jumping in:

1. It’s NOT just about selling products

MLM is has always been about recruiting people below you. The more people recruited, the more incentive accrued. 

If you’re not someone who is willing to put yourself out there and to approach people to share your thoughts and products, this business may not be suitable for you.

2. Income is often unstable and bare minimum

It takes a few years to actually see the money in MLM. One will only earn copious amount of money if they make it to the top.

In the beginning, most earn little commission and some even spend more than they earn. If you want fast results and good returns, MLM might not be the place. The share market would be a more probable place to invest in.

3. You may need to spend money upfront

When you get into the MLM world, you are expected to purchase and try the products. Many times, the total cost of this product reaches few thousand dollars and one may take a long time to get the invested returns.

Also, be prepared to invest your money and time in:

• Trial/Starter kits
• Monthly product purchases
• Attend training / events on weekends

4. Your network = your first customers

Many times, your first MLM clients are your family, friends and colleagues. The modus operandi of MLM is to target individuals and individuals eventually recruit a family. Once a family is recruited, they will be able to influence a society and subsequently a community. 

The downside is relationships with the above parties can get strained due to pushy and forceful behaviour when approaching and conveying the product benefits.

5. It takes strong sales & marketing skills

MLM is basically a small business that requires the investment of time, marketing, cold calls, cold messaging and dealing with multiple attitudes.

Also, rejection and meetings at random hours are extremely common in the MLM world.

6. Check if the company is legitimate

Not all MLM products are bad. Some are actually functional and helps with improving health and wellbeing.

It is best to be involved with companies that have been in the market for a long time and have a credible standing.

Avoid MLM’s that:

• Focus on mass recruitment over product
• Unrealistic income promises such as RM10,000/month
• No clear retail demand – no sales data and details of consumer provided

7. Understand the compensation plan

Most people are carried away with the promises of the future that they fail to understand and are confused the compensation or incentive plan.

Before embarking on any MLM journey, ask yourself:

• How do I actually earn?
• How many people do I need to recruit to profit?
• Are there hidden conditions?
• What is the feedback in the market regarding this product?

8. Time commitment is real

MLM makes working hours look flexible and the attractive tagline “to only work for a few hours but make a month’s salary” is very attractive.  But no one tells you, that those that are into MLM work:

• Through the nights
• Over the weekends
• Are always on their phone as they need to maintain constant online engagement

9. Product matters more than hype

Ask:

• Would people still buy this product if MLM did not exist?  
• Is this MLM product better than the store brand product out there?

10. Emotional pressure is common

MLM environments can be very manipulative and motivational. The common lines are: –

• “If you fail, you didn’t try hard enough”
• “Passive income / earn while you sleep”
• “People who doubt you are just negative”
• “Help your friends and family succeed”

To conclude, MLM can work for some people, but it’s high risk and requires strong sales ability, persistence, and a thick skin. Hence, think many times before getting involved.