I’ve been a CPA now for about 25 years.  In that time, I’ve seen a lot of different biz opps, investment strategies and out and out scams.

One of the things people love or hate is MLMs or IBOs or Direct Selling or whatever it’s called.  There is almost a kneejerk reaction to them.  But, break it down- what is an MLM really?

At its purest sense, an MLM is a way of marketing by making use of the client base you have, or the friends and family you have or people you bring into your life. You sell to them, and others.  I don’t think anyone has a problem with selling something.  Buy low, sell high.  We all know that deal.

But the problem is that most MLMs sell a product that you have to create an interest for.  I have to first explain to you all the benefits of this juice or this cream or this energy bar.  THEN after I’ve sold you on why you need to have it, I have to hope no one else undercuts me on price or comes up with a better delivery system and then hope you not only buy, but continue buying.

In my opinion, that’s where most MLMs fail.  If you’re selling a product that isn’t in common usage or fills a need or want that is already in the customer’s mind, then you have to overcome a very big first time objection - Why do I want this?

Now add into it a complicated delivery system where a lot of people get their share and you have high selling costs that just get passed on to the consumer.

So you end up selling a product after FINALLY creating your market, that gets undercut by Costco.  

How do you make it up?  By recruiting others into the program!  And that’s where MLMs get a bad rap.  

I bet almost everyone you has a story of being invited to one thing (you think) and then finding out it’s sales meeting.  Or being told glorious promises and then not having them come true.  Or finding out the people that you work with are less than ethical.  (By the way, any of those things can happen just generally in life or business as well.  It’s just the MLM now has the added mystique of being something that most people agree on. They are bad.)

I purposely put an MLM thread on my FCL forum at www.TaxLoopholes.com.  I wanted people to post about their MLMs.  Most forums don’t want them and I think that’s a mistake.  People want to talk about what they’re doing.  The thing is you have to contain them.

And I did it for one more reason.  You see for all that it sounds above like I hate MLMs, I actually love them.  Again and again, I’ve seen people who started on an MLM and it’s hard in the beginning.  They get told it will never work and they try so hard to make maybe $1K their first year.  2nd year isn’t much better.  Third year starts to show some promise.  And then if they’ve been following the program and doing exactly what they’re supposed, at the 4th or 5th year, something magical happens.

They hit critical mass.  Suddenly income jumps from $50K per year (and feeling like a 2nd full time job) to $20K or more per month and you don’t even have to get out of bed.  I have seen it with Amyway, Usana, Nuskin - you name it.  It’s not the program so much as it is the diligence of just doing it, each and every day, and NOT QUITTING.

It does matter though which program you choose.  You have to be prepared to support it for years when you aren’t making any money.  Do you believe in it the product enough to keep going when everybody says you’re nuts and you can’t prove they’re wrong?  (at least not quite yet)

So, I started the MLM forum to see if any spoke to me.  Is there a program that has a product that doesn’t need to be sold to the customer (something they already need and want) and that has a delivery system that is easier and cheaper than what they’re already using?  That’s the program I want.

So - tell me your story.  Would you consider an MLM?  Why or why not?