Tuesday, September 4, 2012

Part-time MLM vs. Full-time MLM

If you classify MLM by the potential income and market penetration, you end up with what I would call "part-time MLM", vs. "full-time MLM".

Part-time MLM is something you do as a side-job, convince a few people here and there, and earn some side money that may help you buy some things every once in a while. They typically deal with lower margin stuff commonly available, but with some unique twists. Think Amway, Solavei, ACN. It's not something you'd do full-time.

Full-time MLM, on the other hand, is something you can think about quitting your "day-job" over, if you really really want to take the plunge. Their products are usually luxuries, but high margin, like nutritional supplements, cosmetics, and so on. Think Herbalife, Xango, Nu Skin.

Almost all MLMs claim they are both... start part-time, work your way up, go full-time when you want to. However, reality indicates otherwise.

MLM opponents have long pointed out that on the income disclosure forms of almost all MLMs, 90+% of affiliates earn very little, only a few thousand dollars or less for a FULL YEAR, while a TINY TINY percentage of the people on the VERY TOP earn bazillion bucks. Take a look at FHTM's income disclosure statement for 2009:

That's right, 94.81% of FHTM reps earned less than $3000 A YEAR.

0.38% of all reps earned $28K average ANNUALLY.

This ratio is actually quite common across all MLMs. Here's a similar declaration from Herbalife:

Only 11.7% of all distributors earn $5120 in annual bonuses from Herbalife, vast majority of that 11.7 percent earn 1/10th of that (about $500). That doesn't count any "retail sales profits", but then, if they didn't sell enough to qualify for these bonuses, they probably didn't earn much from resale either, right?

Furthermore, consider this. 0.7% of leaders earned 85K a year average. That's 0.175% of all affiliates (25% of affiliates become "leaders")

NOTE: Both of these income statements are pulled directly from their own websites.

Conclusion is simple: VAST MAJORITY of MLMers are getting part-time salary only, even if they put in full-time work. 

Furthermore, in MLM, you are expected to do your own marketing, pay for brochures, flyers, meetings, etc. etc. not to mention "training" downlines. The "net" income for most MLMers is probably vastly LESS than what's reported here.

So what's my point? As I stated above, there are "part-time" MLMs, and "full-time" MLMs.

You probably won't make much money in a part-time MLM, EVER, and there's little room for a lot more income, but if that's fine with you, go ahead. You should not need to spend too much money on promotion, or incur too many other expenses, in earning those though.

On the other hand, if you are actually looking for a new career, by joining a "full-time MLM", then you will be taking on a LOT of risk, a lot of expense, and a lot of hard work, with little potential of "making it decent", and infinitesimal chance of "making it big".

It is your choice. Choose wisely.

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