Is MLM a Legitimate Home Business?

When people start to look for a legitimate home business, one of the things they will come across is a Multi Level Marketing (MLM) opportunity.

MLM has gotten a bad reputation over the years, and to a large extent it is well earned.

It has a rap of just being a glorified Ponzi scheme.

Multi Level Marketing is a sales business that is set up as a tiered, or multi level compensation system.

The way it works is that you get a percentage of everything you sell.

In addition to selling products, you are also trying to recruit people to sell as part of your team.

A Legitimate Home Business that Pays Over and Over

The people in your team are called your down line. You earn a percentage of everything your down line sells in addition to your own sales. If you have 10 people in your down line you get a commission for everything those 10 people sell.

Here is where it gets good. You also earn a percentage of the sales of everyone your down line people recruit. So if each of your 10 people recruits another 10 people each, you will have 110 people in your down line. That is 110 people that are paying you commissions on sales.

How far does your down line go? That depends on the set up of the company. In a 3-tier system there are three levels of compensation: you, your first down line layer, and your second down line layer. In a 5-tier system there are 4 down line levels.

Another way that you make money with MLM, and where the system really got a bad name is in the membership fees. For most programs you have to pay to get into the system. When you recruit someone you get a cut from the fees they pay. You also get paid when their down line pays.

Where MLM Earned Its Bad Reputation

Where MLM got the bad rap is from programs that did not have a legitimate product to sell. The whole system was designed to recruit new members. No one actually sold anything; all they did was recruit new members and collect the entry fees. That is not a sign of a legitimate home business.

The bad part was, the farther down the list you were, the harder it was to recruit new members, and the less money you could make. Eventually when there was no more money getting to the top level the company folded and the people at the bottom lost their money.

Look for the Value

A legitimate home business with MLM is one that actually has something of value to sell. There are many very popular multi level systems like Amway or Pampered Chef. They are successful because they are actually selling products.

Yes, recruiting new members is still emphasized, but they do sell quality products. Even if you never recruited a new member in your down line you could still make money with these programs.

It requires you to do a little homework. Before you commit to anything you need to make sure that the system you are interested in has something of value to sell. It has to be good quality, and it has to be a product you can endorse, if you can’t do those things, you should not join.

A legitimate home business is one that you can stand behind. If you cannot proudly stand up and talk about your business, you should probably not be in that business. Find a business that you trust.