Blog ai mlm

Guide to Joining a Multilevel Marketing Company

Multilevel marketing companies (also known as MLMs) have a bad rap. Some of it is deserved, and some of it isn’t.

MLMs are often labeled as “pyramid schemes,” but that’s not true. The difference is that pyramid schemes are illegal because they offer no product. With MLMs, a product or service is the basis for the business.

Truthfully, if you have a go-getter personality, and you can follow some basic business and personal etiquette, you can make a lot of money in an MLM. The trick is to avoid all the potential pitfalls along the way!

MLMs can be awesome if you understand how they work, but they can also be a financial and personal disaster if you jump right in without thinking.

Here are some things to watch out for if you’re considering joining an MLM:

Ny2013 bv budget1

Don’t exaggerate your income.

One of the common tricks to getting new recruits is to exaggerate how easy it is to make money. In reality, it’s extremely difficult to make serious money in an MLM. To make a lot of money, you have to be smart and work hard—just like with anything else. A reputable MLM won’t pitch you on the idea of getting rich quick. If they do, avoid them.

Don’t forget about common-sense business practices.

Multilevel marketing is built around a lot of hype. Some people get so caught up in the hype that they lose their minds. Inventory is one example. For instance, don’t buy two years’ worth of inventory when you haven’t sold anything! Your inventory should always be based on your actual sales, not hyped goals.

Don’t compromise your integrity.

In an effort to sell sell sell, some multilevel marketers lose sight of truth. A “hierarchy leader” in an MLM once told a room full of women to buy tons of inventory using their credit cards and not tell their husbands about it. Are you kidding? If anyone is encouraging you to be dishonest, run far away. A legitimate company won’t ask you to lie, require you to go into debt, or fill up your garage with needless inventory.

Don’t be “that guy.”

We’ve all known someone who has just joined an MLM and constantly wants to talk about their new “business opportunity.” This isn’t confirmed by science, but evidence points to these people being the most annoying humans on the planet. Combining friendship and business is always dicey, but if you must talk to friends about your MLM, remember this: No means no. You’re an over-the-top salesman when you start pressuring your friends and family all the time. No one likes an over-the-top salesman. Stop it.

Don’t join an MLM just for the money.

If you’re in it just for the money, you won’t last. You have to be passionate about what you’re doing. In other words, you’re not just selling pots and pans or makeup. More than that, you are in the business of recruiting, motivating, training, and leading a high-turnover sales team. This is your job. Make sure you are realistic about that when you start.

Bottom line: MLMs are legitimate businesses. But know exactly what you are getting into. Look out for all the red flags listed above and have some class. Obnoxious multilevel marketers give legitimate business people—including other MLMers—a bad name. Don’t do that.

If you’ve heeded these warnings and are still comfortable with your MLM opportunity, then go for it. Combined with patience and friendly sales tactics, multilevel marketing can be a great way to make money!

More from the Blog

5 Money Lessons Learned From the Gridiron

There is more to football than championships, tailgating and fantasy drafts. Here are five life lessons you can learn from the popular sport.

5 Money-Saving Tricks for a Happier Halloween

Americans love Halloween. It’s frightening what we spend each year on candy, costumes, and carved pumpkins. Try these five simple tricks to stay on budget this season.

15 Insider Tips for Your Next Debt-Free Vacation

Dave’s Facebook Fans shared how they saved cash this summer while enjoying a week of work-free and debt-free bliss. Here are their top 15 money-saving tips.

25 Myths Broke People Believe

We asked Dave’s blog readers and radio listeners for the most common excuses they hear from friends and family who are up to their eyeballs in debt and unwilling to change.

Fall Fun for the Budget-Conscious Family

Since Dave Ramsey’s Facebook fans always have great ideas to share, we asked them how they enjoy fall activities without spending a fortune.

Why It’s Okay to Enjoy Wealth

Spiritually mature people don’t credit their success to themselves or to their work ethic, and their lives don’t revolve around the pursuit of wealth. Get Dave's take in an excerpt from The Legacy Journey.