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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