This transcript was generated from the episode audio and may contain minor errors.
[Music]
Well, I'm probably gonna get some listener email about this question. I always do, whenever I talk about the topic of network marketing or multi-level marketing MLMs. Maybe there's some other terms, I don't know. A listener wants to know if there are any good multi-level marketing companies, or are they all a bad idea? Like, is it categorically bad?
In this episode, let's break down the truth about multi-level marketing, why it is rarely a smart side hustle. You know, you've heard of these companies, or you see them everywhere. They're skincare, supplements, kitchen gadgets, all kinds of different stuff, right? And some people claim that they have made real money from them. Others warn that they are just legal pyramid schemes.
There's all kinds of documentaries, podcast series, you can watch that kind of walk you through the destruction, the rise and fall, particularly of one of these companies. So is there any such thing as a good MLM? That's basically what it comes down to. Today's question comes from Emily in Phoenix. She has been approached by helpful friends and family who want her to join one of these networks or companies.
And she is feeling a little bit hesitant. So should she feel that way? Or is this a great business opportunity? Well, you'll never guess. But again, let's break it down.
Let's look at the details. All that's coming up in this quick action-packed episode. [Music]
Hi team, this is Emily calling from Phoenix. I've been approached by friends and family about joining MLMs, multi-level marketing companies over the years. And I've always hesitated because they seem to have a bad reputation.
But I've heard some people say that there are ethical or good MLMs out there that really work. Are there any MLMs you'd consider legitimate or is this just not a good side hustle to pursue in general? [Music]
Well, let's not beat around the bush. I don't actually think there are good MLMs or if they are, they are the great exception. And the problem is not any specific company.
It is categorically that the industry is predatory. The reality is almost none of these companies, if any, are a good business opportunity. And it's just because it's like casinos. Are all casinos terrible and evil? Well, I don't know if they're terrible and evil, but are you gonna make money at them?
Of course not, like the house always wins. So the same thing with MLMs, the structure of them makes it extremely difficult for people to turn a real profit. In fact, there've been studies that show 99% of MLM participants lose money. So which is pretty huge, right? Like you would imagine it to be 90% and you'd be like, wow, nine out of 10 people, but no, it's 99 out of a hundred.
So to me, that suggests this is not a game you want to be playing, right? Just like casinos. MLMs reward recruitment, not real sales. Unlike legitimate businesses, most MLMs focus more on getting people to join instead of selling a useful product. And so your ability to make money depends on constantly recruiting others.
And often what happens is your income, quote unquote, comes from friends and family rather than actual product sales to real customers. And a lot of our listeners know that, but I think it's good to have a reminder once in a while that a real side hustle gives you control. In fact, I think one of the biggest red flags with MLMs or network marketing is a lack of control over your own business. You don't own the brand, the pricing, the customer relationships, the company does. So a true side hustle should build your wealth and skills, not just funnel money to an organization that benefits from your unpaid labor.
How about that? Just giving it to you straight. There are much better things you can do. So I hope you stay away from this particular category. And I'm always wishing you well, cheering you on.
Let's talk about some much better stuff in the days to come. New episodes out every day, seven days a week, always completely free, no downline. You don't have to join anything and just listen. My name's Chris Guillebeau. This is "Side Hustle School." [Music]
- From the Onward Project.
