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Ask Dave

How Multi-Level Works

Brent's business opportunity seems a little too much like a pyramid scheme. He wants Dave to help him sort it out.

QUESTION: Brent works full-time and was presented with a business opportunity. From the outside, it looks like a pyramid scheme, but the deeper he looks into it, he doesn’t think it is. He doesn’t know much about multi-level marketing firms. Should he bother getting involved with this? Dave breaks down how these things really work.

ANSWER: Multi-level marketing has good and bad associated with it, and both of those are earned. You will be paid for recruiting and motivating and replacing lots of numbers of people who will sell the product. You’ll make a little bit selling yourself, but 98% of your money will come from you building a sales force.

There is no ceiling on your income, and if you have the skill set to hire and train people over a long period of time, and they have a good business plan, you could make some great money.

The bad part is that these things too often take on a level of enthusiasm that makes them start to feel like a cult. You start to look at everyone you interact with as a recruit and you have no relationships in your life anymore that aren’t transactional. They break down their manners and decorum to the point that no one wants to be around them.

The other way that it’s bad is that, in their enthusiasm, they get so excited that they end up lying about what you can make. You aren’t going to work three hours a week and make $100,000 a year doing anything; that’s a lie. This is going to take a long time and it will be very hard, and you can’t lie to people.