This transcript was generated from the episode audio and may contain minor errors.
[Music]
What's up, this is Chris Guillebeau, your host of "Sidle Soul School." Well, I'm excited because in today's question and answer, I'm gonna hear from some upset people, I'm pretty sure. I'm gonna hear from some animated people, let's say that. I'm gonna hear from some animated people about this topic about once or twice a year. I talk about this subject and the feedback I get is always so interesting. Now that subject or topic is multi-level marketing.
Also known as MLM or network marketing. Also known as a pyramid scheme, but let's hold on, we're getting ahead of things. What is funny is the ratio of emails I receive. So I'm gonna go into that a little bit in my answer. Let's not prejudge the question too much because a lot of people do wonder about this topic.
So I'm really grateful to today's caller for bringing it up. She's asking me, what do I think about multi-level marketing? Whoa, done, done, done. That's what we're gonna look at in this episode. [Music]
Hi Chris, this is Melissa from Houston and I've recently found your show on Spotify.
Thanks for the great content. I haven't landed on a side hustle idea yet and I'm wondering what you think about multi-level marketing. My cousin is really into MLM. He was over at our house recently and asked if he could tell us more about an exciting opportunity. I'm skeptical, but I don't wanna miss out.
What should I tell him? I already told him I listened to you. Thanks, and I look forward to hearing from you. - All right, Melissa, thank you so much for listening. And yeah, I'm gonna give you a direct answer for both you and your cousin.
I appreciate you bringing this up because as I said, I know people wonder about it. And it's not just that they're wondering about it. A lot of people who are active in this industry are very active in trying to recruit their friends and family. And I'm gonna give you a direct answer. I often try to strike a balance between, I'm not the one who has all the answers.
You have a lot of answers within yourself and a lot of different side hustle ideas can go different ways. So it's not like I can look at every single thing and say, this is what you should do. So I try not to be that kind of expert or so-called guru, but at the same time, if people ask direct questions, if they ask like, what do you think about this idea? I tend to think I'm acting with more integrity if I actually answer the question and say, well, yes, this might be good. I can see some potential here.
Or no, I really don't think this is good. Okay, so to answer the direct question, don't do it. I think you should be skeptical. You are right to be skeptical. Don't worry about missing out.
That's the kind of feeling that these programs want to inspire. And they're often good at that kind of marketing, but the logic doesn't really follow. And as for what you should tell your cousin, tell your cousin as diplomatically as possible that this probably isn't a good idea. Or you can let your cousin figure it out for themselves because that's what often happens. The vast, vast majority of people who go into this business do not make money.
And there have been scientific studies about this. I saw one recently that was, I forget if it was 95% or 97%, really, really high percentage of people that lose money when they invest, so-called, let's say, when they quote unquote invest into a network marketing opportunity. Sometimes they say they break even, which is code language for I lost money. Like if you go to the casino and you say you broke even, did you really or did you actually lose something? So as I said, I know I'll get emails about this and feel free to write in and share your experience, positive or negative.
I'm always willing to hear other people's opinions. But what I often think whenever I do hear an exception, like again, the vast majority of people are not making money. Whenever I hear about these exceptions, I'm like, that's so rare. It's so, so rare. It's like there are people who are professional gamblers who are actually good at it.
But that's very few people, right? Because most people who try to be professional gamblers fail. Most people who try to be quantitative stock traders or commodities traders fail. It's that kind of thing. And so if you are actually able to make it work, my question is always like, what else could you do?
If you deployed your talents to something else, might they actually be more successful? So when I mentioned that ratio of emails I get, it's usually eight to one or so in terms of people saying they had a bad experience or a family member had a bad experience. So the number one question you should ask somebody when your cousin or whoever presents you with this wonderful opportunity, you should always say, how is it working for you? And I guarantee you almost every time, the response you're gonna get is, well, I'm just getting into this, but my sponsor is doing really well, or my sponsor knows somebody who is doing really well, or I've heard about, you know, the point is that person probably isn't making money because very few people are. All right, and by the way, if you ever think of selling Lula Roe, which is very popular or has been recently very popular, clothing manufacturer using this direct sales kind of model, there is a 20-minute Vice documentary that you should watch.
It is free online. I will link it up in the notes. So listeners, if you've got a question or if you've got a comment or a complaint about one of my answers, come to sidehustleschool.com/questions. We will be featuring them throughout the year along with updates from other listeners as they launch their projects. Thank you so much.
Hope you're doing well wherever you are in the world. My name is Chris Guillebeau. This is "Side Hustle School." [Music]
From the "Onward Project."
