Naughty or Nice–Is an MLM right for you this holiday season?

With the holiday season official here, many mama’s are looking for ways to earn extra cash for their family.

Luckily, nowadays there are plenty of options for earning a good income at home with the internet. I have written a few blogs on ways to expand your income from home, but I have yet to talk about MLMs.

That’s in part because I generally wouldn’t recommend them to most folks. But after a bit of dissuasion online recently, I felt that now was a good time to talk about the pros and cons of MLMs and how they differ from affiliate marketing and more importantly, pyramid schemes.

This blog post relies heavily on information found from the FTC website. I highly suggest that before you get into any online marking of MLMs, you check out their site and learn as much as you can.

What’s an MLM?

Multi-level marketing networks or MLMs is a network that allows people to get into direct sells. People who are in MLMs are considered independent contractor or business owners and are NOT employees of a company. MLMs generally do not recruit salespersons themselves but rely on their members (the business owners ) to do the recruiting for them.

Since members of an MLM are not employees, they–in theory anyways– rely on their sales to generate income and pay for their own marketing expenses.

How is an MLM different from a pyramid scheme?

While the structure of MLMs are based on a pyramid model, they do differ in that MLMs are not suppose to solely rely on the recruitment of others into your network–if at all. The FTC defines a legitimate MLM, in part, as one that encourages its members to sell products and drum up consumer demand and not on recruitment of more members or the purchasing of product in bulk.

It’s important to note here that the FTC only considers buying in bulk problematic if the MLM incentivizes it or purposefully misleads its members into thinking that there’s a demand for it. So you are fully responsible for any bad business decisions you make on your own.

How is an MLM different than affiliate marketing?

If you want to learn more about affiliate marketing or brand partnerships, you can check out my blog post here.

While there are many difference between MLMs and affiliate marketing, some of the key differences are:

1. There is no recruiting members into your team.
2. You are a marketer not a seller (you don’t carry inventory, you’re just encouraging consumers to buy the product and giving your genuine opinions)
3. You don’t generally invest any money upfront to get started.

Generally speaking, with affiliate marking you don’t have to actually invest any money as the company is investing in you as their advertising. As an affiliate marketer, you are again an independent contractor and you get paid a commission based on how many people buy a produced based on your recommendation.

Is joining and MLM a good way to make cash this holiday season?

For most mommies out there, my answer is going to be “No,”

MLMs CAN be a great way to make a lot of money. I know two women personally who profited six figures a year doing MLMs. But they are definitely the exception and not the rule.

For one, there’s a lot of financial risk involved with MLMs (more so than with affiliate marketing or other work from home opportunities I have listed here), and if you don’t have business or marketing experience, you’re more susceptible to lose a lot of cash quickly with no protection to you.

Secondly, even with legitimate MLMs, recruitment plays a heave role in how much income you’ll make. Many find that successful recruitment and retention in and of itself is a full time job.

Lastly, you’re likely not going to make the six figures my friends have. The average income earned a year is only about $2,400 with the median monthly income being just $18 a month (more info on that here). You can easily make 3x that buy just posting to Instagram with little to no risk.

MLMs in and of themselves are not inherently bad and can offer finical freedom for a select group of people cut out for that market. So if you have a bomb business background, are a marketing genius and have the time and resources to invest, this could be a good option for you. But for the vast majority of people reading this post, I’m sorry, but MLMs are likely your best option, ESPECIALLY if you’re trying to generate a bit of extra cash for this holiday season.

As mentioned earlier, I have a few post up that share ways where you can make legitimate cash online easily at home that you can start as early as today. For most folks, these will all be better options for part time work.

I’m joining an MLM anyways. What is the best tip you can give me?

MLMs are a good fit for some folks, so if they’re a good match for you, you should go for it!

That said, before you join and MLM (or get into brand partnerships or affiliate marketing for that matter ), I HIGHLY suggest taking a peak at the FTC’s website and reading up on what makes a good MLM and the warning signs you should look out for.

I also recommend doing your research and seeing what current and former members of different MLMs have to say about their compensation structure and how they run their business over all. If you can find a MLMs retention rates of member, that would also be very good information to know. The last thing you want is to join and invest in a MLM only to leave six months later (read more on that here) .

Overall, MLMs aren’t bad, but aren’t the best option for most folks either. Let me know what your personal experience with MLMs have been or if you plan on join one below!