Easiest mlm to make money
Has anyone ever invited you to be part of their 'network marketing team'? For most of us, the answer is probably, 'this has happened more than once'. My curiosity has lead me to join more than one MLM, but I did not stay in the system very long. We will look at:. The answer to this is simple: Multi-Level Marketing companies have an intense focus on recruiting new members. They will drum it in that you can only be successful in Network Marketing, if you recruit more members and build what most of them call a 'down line'.
In essence, it doesn't matter who you are or what your background is. Everyone is a prospect, and the more you sign, the better. Members are encouraged to recruit everyone they know to join their network.
The mentality is something along the lines of: MLM is 'something that anyone can do'. If you believe in the system, then why wouldn't you invite everyone you know to be part of it? The more people you sign up, the more you can earn from their activity. You can potentially make money from all the business generated from not only the people you recruit, but also the people that they recruit.
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If your second line each sign 5 people third layer down line , your personal network has people. Now imagine if you each recruited 7 people instead of 5, then you'd have a network of 19,! But why stop at 7? There is no limit to how many people you can recruit! So go out and sign as many people as you can. Sounds pretty simple doesn't it?
There are literally hundreds of MLM companies, and new ones are always emerging. Over the years, I've been approached 13 times to join a direct marketing team.
The companies I was invited to join were:. I've been approached by strangers at parties, by colleagues at work, and by friends and even one family member. The MLMs and the people recruiting me vary, but they all use a very similar system.
In my experience, these invitations are usually very vague. If you ask any questions, the answer is usually 'come along to the meeting and all your questions will be answered'. This is usually not run by the person who recruited you.
It's the part when you are told that 'today is the best time to join', and reminded that 'all your dreams can come true, if you are a believer'. In my last encounter with such a person, I said I was unwilling to sign on the spot because I wanted more time to properly analyze the opportunity.
This did not go down very well. He acted as if I'd insulted his mother, and his religion at the same time. It is possible to make money with MLM, however we believe it is highly improbable. In his free e-book ' Multi-Level Marketing Unmasked' , Jon Taylor found that So for every 1, people who join a network marketing team, 3 will earn more money than they spend. So if I want to have 5 successful people in my first down line, I have to recruit 1, new members, so that 5 of them will be successful.
To try and understand why it is so difficult for network marketers to turn a profit, we looked at the compensation plans for Amway , USANA , Herbalife , and Nu Skin. Each MLM has their own version of paying commission, and they are all share similar characteristics. Unfortunately we believer that they are structured in a way that makes it very difficult for anyone to turn a profit in network marketing.
This creates what we view as 'synthetic demand' for the products. Network marketing members are ordering product in order to remain 'active'.
They order in excess of what they would personally use or what they can on sell at a retail margin, which causes them to stock pile the products. Most of the product being ordered is by members for personal use or to satisfy volume quotas. Sales are not driven by market forces, they are driven by members buying for volume targets. If very little money is coming from outside the network, then the only way for people to profit, is at the expense of people in their own down line.
The stories you hear about the struggling single parent who is now a millionaire might be true. However they leave out an important detail, which is: Every one of those million dollars came from other members of the network who are below them in the MLM hierarchy which is not pyramid regardless of how closely it resembles one. Money made by one member of a MLM team, has been lost by another. Once you are in the system, your up line will receive commission on any money you spend.
It is in their best interest to tell you to 'you are perfect for the team' and to 'keep spending that monthly quota'. The more you spend, the more they earn. They may believe that you can succeed in multi-level marketing, but in reality, they need your money coming into the system in order for themselves to to succeed.
At best, this is a misconception, at worst it's an intentional misrepresentation. You can order products directly from the company, but they will pay a commission to the person who recruited you, and several others above you in the chain. They will tell you that you have the potential to 'earn commission' from your down line.
In reality you are becoming another middle layer in the distribution chain between the supplier and your down line. To analyze the numbers, we looked at the compensations plans as well as the annual reports and income disclosure statements of Amway , Herbalife and USANA.
Unsurprisingly, our findings suggest that only people who are very high up the network marketing structure, are making any profit. Below is our interpretation of the data we read for each company:.
Your earnings in Amway are based on a combination of PV points based on how much you and your down line spend and BV the dollar value assigned to how much you and your down line spend. The amount you earn, is based on the amount that you spend, as shown in the table below:.
The US Dollar value required to generate the minimum points was extrapolated from the sample bonus statements printed in the Amway compensation plan. Anyone you personally sponsor, will 'pass up' volume to you.
This 'pass up' system, encourages people to sponsor as many new recruits as possible. However their is no incentive to nurture recruits and help them succeed. All that matters is that money is being spent. Amway has a disclaimer which appears frequently on all their documentation.
It is based on figures from , and states that:. And on average, those who remained 'active' and worked the system, lost money. Suddenly all that time and effort spent building the system isn't looking so good. The most telling document we found, was the Herbalife Income Disclosure Statement from In their own disclosure they state that:. Herbalife will defend this data by claiming that most people do not join with the intention of making profit.
In fact the same income disclosure document states:. We are not going to challenge the legitimacy of this claim, but we do wonder how these people are obtaining a 'wholesale price'.
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They buy the goods at a the distributor price, which includes commissions to everyone in their up line. They are ordering directly from Herbalife, but they we don't agree that this is a 'wholesale' price.
The are ordering through a long line of middle layers who they know as 'their up line'. We built the table below using data from this annual report, as well as our own calculations:. There is no denying that money is being made at the top of the USANA network. It must be lonely at the top, because based on what we can see, most associates are not making any profit at all.
This money is your personal spending and you do not get any commission back on it, but the person who recruited you might. We read through the USANA income disclosure statement , which is based on data from The information contained in this document is presented in a format which is consistent with network marketing.
Conveniently hidden in the fine print at the bottom, it is stated that if all associates are included then:. For more recent data, we looked at the USANA annual report. The numbers tell a familiar tale. With more than 2 thirds earning nothing at all. Based on the numbers we found in USANAs documents, they may be the best multi-level marketing company in the world. Based on the information we have been able to find, it is our opinion, that the vast majority of people who join multi-level marketing companies, will lose money.
As always, we appreciate all feedback, so please feel free to share your views in our comments section. The information on this site is of a general nature only.
It does not take your specific needs or circumstances into consideration.
You should look at your own personal situation and requirements before making any financial decisions. AUDUSD Live Chart Bitcoin Live Chart Gold Live Chart. Can You Make Money With Multi-Level Marketing. We will look at: How are Multi-Level Marketing Companies Promoted. The companies I was invited to join were: Amway - on 5 separate occassions USANA - twice Herbalife - twice Nu Skin A company that sold websites name forgotten A company that sold lottery tickets name forgotten A company formed by disgruntled former Amway members name forgotten I've been approached by strangers at parties, by colleagues at work, and by friends and even one family member.
If you ask any questions, the answer is usually 'come along to the meeting and all your questions will be answered' Step 2: Why Network marketing is the way of the future. It removes the middleman and gives money back to you. This is something 'anyone can do'.
You don't need to be a salesman The products they sell. They are not available in supermarkets because they are 'too good'. The vitamins have helped solve all sorts of medical conditions.
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Flashy diagrams showing you how much money you will make with even a modest down line Success stories, somebody else was hugely successful, therefore you can be too! The stories include a rags to riches tale, and focus on the point that 'this system is your key to financial freedom'. Can You Make Money in Network Marketing? What the numbers tell us To analyze the numbers, we looked at the compensations plans as well as the annual reports and income disclosure statements of Amway , Herbalife and USANA.
Below is our interpretation of the data we read for each company: Amway Your earnings in Amway are based on a combination of PV points based on how much you and your down line spend and BV the dollar value assigned to how much you and your down line spend. The amount you earn, is based on the amount that you spend, as shown in the table below: It is based on figures from , and states that: In their own disclosure they state that: In fact the same income disclosure document states: We built the table below using data from this annual report, as well as our own calculations: Conveniently hidden in the fine print at the bottom, it is stated that if all associates are included then: Network Marketing , Multi-Level Marketing , MLM , Amway , Usana , Herbalife , Nuskin , Streetonomics.