Multi-Level Marketing isn’t the most popular method of building a business due to a number of reasons, but do not let anyone tell you it’s not possible to make money using this model.
I’m not the biggest fan of the MLM model myself, but I’ve helped some people find success in their respective MLM businesses and I want to share with you the same information I have shared with them.
This is not a promotional piece in any way. View it as a guide on how to make money in the MLM business model. It contains practical information that will equip you for the realities you might face as an independent distributor looking to break even or scale your earnings.
How to Make Money with MLM
Step 1: Be a satisfied customer
This cannot be emphasized enough. Try to answer the following questions objectively:
- Is your product top quality?
- Why should someone purchase your product instead of another one?
- Is the price of the product relatively high compared to others of the same quality?
The completely white hat way of running an MLM business is by making retail sales to regular customers and if you didn’t answer positively to all of the questions above, chances are you will have a hard time selling the products to people.
You need to be a user of the product(s) and a strong believer in the quality of the product(s) in order to be a good salesperson of the product(s).
Step 2: Be thorough in your research
There’s a story being thrown around that over 95% of MLM participants fail. I have not been able to find any in-depth studies to authenticate that number, but I can tell you from many conversations I’ve had with consultants through this site and in person is it’s not an exaggeration to say that over 95% do not have all the information they need before joining a company.
Who is the owner of the company? What is the true cost of becoming a distributor of the company? How transparent are the details of their compensation plan? What is the average annual income of their independent distributors? Would you get any training on how to promote the products and if yes, what is the extent of the training and who administers it?
At first glance, it might seem like a lot, but one of the main reasons for the large failure rate is very few consultants know the answers to these questions before the join. They are lured in by the idea of making money if everything works out perfectly, but they are rarely informed enough about the “tiny” details of the opportunity that will help them come up with an actionable plan to succeed.
Step 3: Be ready to invest some time and money
It costs money to join an MLM and sometimes to remain an active distributor, so be prepared mentally and financially for these costs. It’s not very realistic to expect to make any profits in the first few months while you learn and gain some experience. This logic does not only apply to MLM businesses but just about every kind of business – both online and offline. There is always a learning phase before the rewards stage.
If you’re looking for a way to take care of your bills for this month or next, what you need right now is a job that provides stability rather than a business.
Think about the skills you need to acquire to give yourself the best chance of being successful. If you’re going to be dealing with people face to face, maybe you should get a coach to mentor you on sales. If you’re going the digital marketing route, maybe you should pay for a good course or be willing to spend time compiling free resources and actually implementing them.
The higher the investment (money or time or both) you put into your learning, the more equipped you are the be successful in your business. Again, this principle applies to every area of life.
Step 4: Have a plan of attack
Now the fun part – taking action!
At this stage, you are a strong believer in the value of the product, have studied the ins and outs of the business opportunity and you’re aware making the most out of the opportunity will require some time and money investment. If you haven’t familiarized yourself with the previous steps, scroll up and try to digest them again. If still in doubt, ask questions in the comments below.
It’s absolutely critical you understand the first 3 steps before you move forward with this step.
Now we are actually going to talk about different ways for you to actually sell the products. I will try to explain each method as comprehensively as I can and share what I think are the pros and cons of each one.
Host a “party”
When you’re just starting a business and you need to hit the ground running, the most natural way to start promoting your business is to leverage the network you already have – your friends, relatives, neighbours, coworkers, etc.
Since a level of familiarity already exists with these people, they’re more likely to trust your recommendation to purchase a specific product than a total stranger. Even if they have no need for the product you’re offering, some might feel inclined to still make the purchase to support your new business and share with their own network. As your audience grows and more people find out about your business, you can create a schedule to host these parties more often.
You need to have product samples available and these parties need to be lively and interactive. The last thing you want is to do a 20-minute demonstration without any laughter or warm participation from your audience. Ask them questions, run a mini contest for a free product, do anything fun to keep them engaged and relaxed.
- From selling to your friends, you could potentially recoup your initial investment to join the business opportunity quickly.
- Since your friends already trust you, they’re likely going to recommend your product(s) to their network.
- The atmosphere at parties is usually cordial and fun.
- It’s the most cost-friendly method to implement in terms of time and money.
- This method is not sustainable in the long-term. You can only have so many friends and they cannot continue to buy your products forever.
- Let’s face it, not everyone is comfortable being the centre of attention at a party. Whether it’s because they don’t have the social finesse to cozy up 10 people at once or they just don’t like the spotlight (both of which are completely okay), this method isn’t the best solution for such people.
Verdict: It’s a great way to get your feet wet at the beginning, but it needs to be complemented by another method in order to achieve long-term success in your business.
Over half of the world’s population uses the internet today and there’s no other place that provides this kind of access to so many people. If you’re looking to sell any kind of product, I bet you your audience is already on the internet.
In my opinion, the failure of MLM distributors to understand this reality — and the failure of MLM companies to help them understand this reality — plays a big part in why a large proportion of participants fail to succeed in their business.
The possibilities are endless in the digital world. Think about Facebook, Google, YouTube, blogging, etc. Did you know that thousands of your potential customers are already on these platforms? Did you also know that you only need to master one of these platforms to get a consistent flow of qualified leads? You could choose to promote your business on multiple platforms as a matter of scaling, but the truth is you only need to be active on one to be successful.
Let’s get into more detail:
Here’s a fun fact you may or may not already know: Facebook has over 1 billion active daily users and over 2 billion active monthly users. Digest those numbers for a minute and imagine the kind of reach you can have.
Here are some nuggets on how to build your business on Facebook for free:
- Check with the MLM company whether you’re allowed to promote their products on Facebook. I’ve had a number of conversations with visitors on this site that have told me their company does not allow distributors to promote on Facebook. Make sure you’re all clear to use this method first.
- Now make sure you read Facebook’s policies on pages. Learn more about that here.
- Create a Facebook business page and use personal branding. Don’t use the company’s name anywhere on your page, but instead come up with a creative name that would resonate with your audience or use your own name. For one, you won’t come across as too “salesy” and also, you wouldn’t have to start the whole process again if you ever decided to promote another company’s products within the same niche.
- Share your page with your friends and ask them to share. When you have that initial base of followers (friends), your page appears more trustworthy to people that do not know you.
- Post helpful and engaging stuff. Do not be that person that always sells products. As you post more and more helpful content, your organic followers will naturally increase. Read this article to learn more about how to increase your organic reach on Facebook.
Great. It’s free. But it’s going to take a lot of time and hard work — which is often the case for most things in every kind of business. If you want to reach your audience in the least amount of time possible, you will want to consider Facebook Advertising.
There’s no need for me to go in-depth on the topic because there are numerous resources online that do justice to the topic. Neil Patel put together this comprehensive step-by-step guide to Facebook Advertising.
Learn about it before you venture into it. I’ve had many clients straight up tell me Facebook advertising does not work. First look into their previous campaigns and I can see their targeting was poor or they set a careless budget. While Facebook advertising is a way to reach your target audience quickly, it’s also a quick way to lose money if you don’t know what you’re doing.
One more thing on Facebook — you can use Facebook to promote your “parties”. You can create an event that lists the date, time, venue, etc. You can even expand your audience through inexpensive paid advertising.
Let’s talk some stats, shall we?
There are over 1.5 billion active monthly active users on YouTube, and over 30 million active daily users. One thing I found interesting is only 9% of small businesses leverage the traffic on this hub.
Delivering honest and helpful content in your own voice would resonate with your target audience and is one of the surest ways to build trust and authority.
The key here is to focus on educating, not selling. When you educate, people are more likely to trust your recommendation to buy a product.
There’s also a learning curve to YouTube marketing.
This is my favourite method and the one I use to guide people who insist on running an MLM business. It’s also the one I have the highest level of expertise on. But before we go deeper into this method, know this:
Nobody cares about your product or business.
Huh? Yup, people don’t care that you want to start a business and you have these cool products to sell. But…
People have problems and are willing to pay for a solution to their problems.
To be successful in any business you need to identify a problem, have a solution and be able to reach people that have that problem.
Why are you reading this article on my blog right now? Is it because you like me and my site that much? No. You’re likely looking to join (or have already joined) an MLM company and you’re trying to get honest information on the best ways to make money.
If you can put the needs of your potential customers before your own, you will not only get the satisfaction of helping people solve problems but your business will thrive. Trust me on this. This is where a lot of marketers have missed it. They think people care about their products and offers when the reality is nobody cares. I used to think this way too, but now I know better.
Create a website and write honest content that addresses the pain points of your target audience. If you can recommend products that will solve their problems and earn you some money in return, then, by all means, go for it.
To be clear, I’m not in any way suggesting it’s going to be easy. You won’t just publish one blog article that is honest and expect to have a successful business forever. You have to be consistent with publishing content and try to cover as many angles related to your target audience as possible. This is how you establish credibility and authority within your space.
There is a learning curve involved, of course. There’s building a website (simpler than most people think), learning how to create content with intent, how to get your content in front of your audience, and so on. There’s a lot of learning involved but here’s the thing with business – learning never stops if you want to stay relevant.
I can tell you from experience that the rewards of the time investment are amazing. It only took a couple of hours to put this article together and who knows how long ago I published it from the time you’re reading it. The more content you’re able to create on your blog, the greater your potential reach and consequently, the more potential customers you’re able to get.
Much like hosting parties, the digital world has its pros and cons as well.
- The internet gives you access to a global audience and not just local
- People have a natural opposition to “salesmen” and the digital space gives you the opportunity to create helpful content that resonates with your audience
- This method creates the possibility for consistent passive income. For example, you could write an article on your blog that still brings readers in three years later without you actively doing anything to promote it.
- It allows you some flexibility in your business. You could promote products from different companies simultaneously.
- Going digital lets you run your business from home or anywhere in the world
- It gels perfectly with the other methods
- Because there are so many platforms, it could get very overwhelming for a beginner.
- The learning phase requires a huge time investment. If you’re not sure where to start, send me an email or leave a comment and I’ll try and point you in the right direction.
- Not all MLM companies allow distributors to promote their products this way. Ensure you do your due diligence on what the rules are in the company you’re with.
Free Marketing Resources:
Build your Downline (a.k.a Go Out and Recruit)
I left this method for last because this is where the grey area exists in the MLM business model. Most of the legal controversies surrounding this industry can be attributed to this method.
This is not a standalone method of making money with MLM! It is more of a way to scale your business when you have started making money from either or both of the previous methods.
Most companies do not explicitly encourage their distributors to go out and recruit more distributors — that would be illegal. However, the problem is distributors actively go out to recruit people and a lot of companies do not discourage them from doing so. To be clear, recruiting in and of itself is not illegal. The doubts arise from how recruiting is done.
Here’s the ideal scenario: Mr. X is an independent distributor for PZ company. He promotes PZ’s products to an interested audience using either (or both) of the methods mentioned earlier. If buyers are really impressed, naturally, they might want to start promoting the products as well. At this point, Mr. X walks them through the process and is very transparent about the costs, amount of work and learning involved. When Ms. Y signs up to become a distributor, she’s now in the same position Mr. X was in. She starts to promote the products and some people might want to become distributors as well. It goes on and on and Mr. X’s downline grows in a completely legal and ethical fashion.
This is the perfect scenario, but what happens when loyal buyers do not know they have the option to promote the products? In this case, Mr. X could tell a repeat customer that an opportunity exists for them to be able to make money by promoting the products and getting the products at a discount rate.
Now here’s a very common scenario: Mr. X does not have the tactics to get in front of his target audience, so he goes door-to-door to try and sell his products to just about anyone. As you would expect, he doesn’t have much success using this method and so he tries to sell something else — an opportunity. I’m sure you can predict what happens next.
You couldn’t possibly imagine how many times I’ve had a distributor trying to talk me into joining “this business opportunity”. Most of the reviews on this site were written after I received emails from people who are being persuaded to join a “business opportunity”.
A business always involves a product or service. The aim should always be to keep the business around product sales. Growing your downline exponentially increases your earning potential, but make sure everything revolves around real product sales.
The FTC covers this in more detail here.
Multi-Level Marketing, though controversial, is not a scam. Even though a large proportion of distributors don’t make money, we know there is money to be made in MLM. Most distributors are not just as informed as you are now after reading this article.
If you’re just starting out, I strongly advise you bookmark this article and come back to it whenever you need a refresher. I’m also available to answer any questions you might have. Feel free to leave a comment below and I’ll respond back to you as soon as possible.