It may be a symptom of the economy, or it may be just coincidence, but I’m getting a lot of invitations and questions about MLM opportunities lately. I just replied to a friend about one of these opportunities on email and thought I would share it here as well.
What do you think? Does MLM fit into your business model? IS MLM your business model? For me, it’s not likely to ever be.
This email was sent to a friend who has also talked to me in the past about the Infopreneur business model. The product he invited me to check out is an online personal development membership site built by some really recognizable names in the PD world. It looks like great content that will help a lot of people. The comp plan also looks good (but they almost always do).
Hey Man,
This does sound like a great product, but here are my thoughts (since you asked and I shamefully didn’t reply).
For me, it’s not something I need at this point. The last thing I need is more information
, I’m having trouble using the great info I already have. BUT there is a huge market for learning products online, especially in these topic areas.
I never promote MLM, but would as a back-end product if I believed in the value that it would provide for my customers. It just doesn’t make sense to use MLM on the front end because, no matter what, you are ultimately building someone else’s business — getting paid well to do it, but it is what it is.
It would have to fit my niche (which this does, mostly) and I would need more products to put in to my back-end sales funnel (which I don’t). Since I haven’t fully integrated all of my own products and those of my JV partners into my sales funnel, I probably won’t need something like this in the mix for another year, at least.
I used to think that MLM was a great way for people to earn a little extra money if they didn’t want to build their own business from scratch, but that’s not really viable.
Either way, you are building a business. You have to go through the same effort to promote the products, and promotion is 90% of the effort. Creating a product that would make $5,000 a month is not that hard really.
A very focused niche membership site can easily generate $19.00/month in almost pure profit. So you would need a total of 263 members to generate that kind of income. Make the content a *little* better and have a higher subscription price, and you start multiplying quickly.
Neither the roll-your-own nor the MLM approach is easy, but with your own product, as least you are building an asset (customer list) that can be grown over time.
My advice: pick a narrow niche, and get a little 20-page special report out there and build from there. You have to pick the niche carefully, but I’m sure you have a ton of ideas there.
I’m also *very* unlikely to buy into an MLM unless the person pitching it to me is *already* making good money with it. Why should I test it if you haven’t already tested it yourself. I don’t mind you asking, but I’m not looking for other opportunities to test right now — I’m optimizing opportunities I have already tested.
The answer is always “but if you get in now, you will be closer to the top.” But that’s never true. If it is a good opportunity now, it will also be in 4 months after you proove the concept. There *are* ground floor opportunities in MLM, but they *never* come to the general public. You have to be positioned in a specific market to have ground floor opportunties come to you.
So, while I have nothing against MLM in concept, I don’t think it’s a good idea for most people. Better to develop products and expertise that you own in a specific niche.
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I agree wholeheartedly. I tried MLM once. It was a reputable company with a product I actually enjoyed, but the business model was built on getting recruits and that wasn’t my thing. It clashes with my personality. It’s a lot easier for me to get people to click on my affiliate links than it is for me to get them to talk to me about the business opportunity.
That’s pretty much the core of MLM. It *has* to be a personal one-to-one interaction to work in most cases. Some programs can work with an Internet affiliate marketing model, but most require you to sell it to your close contacts one by one.
The problem with many network marketing (MLM) opportunities isn’t usually the product or the model, but the way the members promote it.
Katherine’s right that there’s a focus on getting recruits. That’s only part of the model and most members spend far too much time and effort on this area. Add to that the focus on personal purchases by those recruits and it’s easy to see why there’s not a lot of sales volume — and very little commissions being earned.
In the opportunities I’ve been involved with (I’ve been with 4), my focus has been on making personal sales and recruiting from those that love the product. I see immediate income from the sales and long-term revenue from those that I can train to do the same.
I have recently joined an MLM. Can someone please give me some feedback as to if you think I made the right decision? I realize that we are still only in Pre-Launch or Ground Floor or whatever you call it. But How long should it take for something to really start bringing in some cash? I make about $400 a month which is not bad but it has been about 4 months already. When do the BIG BUCKS start rolling in? I want the STOCK OPTIONS! Thats why I got into this.. but I must hurry and move up some more “Ranks” so I can get my BMW bonus. Can anyone give me a little feedback on how long it should take to get a strong downline going? I only have about 150 people under me in 3-4 months. Please help!