10 Reasons You Should NOT Join an MLM company.

10 Reasons MLM is Not Owning Your Own Business

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I too have drunk the cool-aid

Oh, I’ve been there. Sitting in that Multi-Level Marketing party, listening to the salesperson rave about how much they love the business and being convinced.

When I was in my early 20’s, long before kids, I sold PartyLite candles. It’s kind of embarrassing to admit it now but my husband and I even went to the National Meeting at the end of our honeymoon. (God, I was so young.)

I didn’t earn much money and hated making calls so I just let the business fizzle out after a while.

10 Reasons You Should NOT Join an MLM company.

 

Then, two years ago after reading about all the horrible things in shampoo and toothpaste I was convinced by a friend to sell Ava Anderson. About a month into my new “business” the owner decided to sell the company and all hell broke loose.

It ended up that if I wanted to continue I had to buy a whole new kit! Ummm, no!

So that one ended too.

I know that many people are happy with their Multi Level Marketing businesses but I just can’t get on board anymore.

It’s not really owning a business. It’s being part of a corporation. No matter what they tell you, you don’t own anything.

There are so many great products, and some I still buy, but I will never join an MLM business again.


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10 Reasons why an MLM business is not your own business

1) Everything you do is controlled by a corporation.

The products, brand, marketing, sales, everything is controlled by a corporation. You have ownership over nothing.

2) You have no control over the products you sell.

Don’t like a certain product? Think it could be improved? Tough luck, you are stuck with the products they give you.

3) It’s not really about the products anyway, it’s about the recruits.

You will be encouraged to recruit other people to join the company under you. It is painted as a good thing since you will be getting a percentage of their sales. Which leads to…

4) People only want you to join so THEY make more money.

I mean that’s why you recruit, right?

5) You can only advertise in approved ways.

Have a great idea of an online promotion for the company? Tough luck! You can’t do any independent advertising. Plus, your website is what they give you. Some of them look horrible but you can’t change that. You also can’t mention certain keywords in a website or blog you own.

6) They promise you will earn tons of money with no work…

The promise of huge amounts of money seems to be universally pushed in MLM companies. Of all the people that you know who are a part of an MLM business, how many are millionaires? That’s what I thought.

7) …then encourage you to cold call people.

And who likes cold calling??? No one I know!

8) Markets are easily oversaturated.

Did anyone else notice this with Lularoe? I mean those leggings are super soft and desirable but it seemed like one minute they were rare and the next everyone and their cousin was selling them.

9) There are lots of training that are mostly motivational speeches.

I love a good training, where you learn techniques and skills that will help grow your business. But sitting in a room and listening to someone try to encourage everyone to make a certain number of calls each day is not my idea of a good time.

10) YOU HAVE TO PAY TO GET THE JOB!

This is a job. You work for someone else. You have to pay to get the job. That is messed up.


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Did I go too far? I certainly got heated up!

I just hate seeing people put their hard earned money into an MLM business that they will fail at eventually.

I’d so much rather that anyone who wanted to work and work hard, start their own business. A business that they would have ownership over. A business that they are passionate about.

Owning a business is one of the hardest things I have ever done. It is a constant struggle to keep up with products, bookkeeping, employees and hundreds of tiny task that pop up.

But owning a business is also one of the most rewarding things I have ever done!

Read this before you start a direct sales business.

I love creating something that other people love. I love connecting with the customers and making my product and business even better in response.

So what I’m saying to you is, if you are thinking about making money from an MLM, STOP! Sit down and figure out a business you can start yourself. Take the $100 you were going to invest in the MLM company and start your own thing.

Need help? Take my free course, Business Idea Breakthrough, to help you figure out what type of business to start. Then check out Everything You Need to Know About Starting a Small Scale Business to get your business off the ground.

Thinking about joining an MLM? Read this first! Great reasons to not join and what you SHOULD do instead! #smallbiz

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16 thoughts on “10 Reasons MLM is Not Owning Your Own Business”

  1. Oh, I so agree w/ you. I really do HATE MLM businesses. They are so ultra annoying and they do fizzle out. For most that make a little bit of money, it doesn’t even cover the time they’ve spent. Oh, and so sick a the Lularoe stuff. You’re so right about markets becoming over saturated. I see it all the time.

  2. I totally agree with you. There are some products worth buying, for sure. And if you use those products to complement your business (like using Beachbody workouts with your health coaching clients) that’s totally fine too. But how can you call if “owning a business” when someone else tells you what you can and can’t do when it comes to advertising the product or other business decisions? And I also have an issue with wanting to be more focused on selling the opportunity rather than selling the product. I mean, I guess someone could make similar arguments against franchising as they do against MLMs but at least if I bought into a McDonald’s franchise most of my work would be into selling the food not trying to find other people to buy into the franchise.

  3. 6) They promise you will earn tons of money with no work…
    The promise of huge amounts of money seems to be universally pushed in MLM companies. Of all the people that you know who are a part of an MLM business, how many are millionaires? That’s what I thought.

    THAT! I am going to say that to every young person I meet. I only hope I can get to them BEFORE they spend the $100. I was easily duped in my youth, as well! You’re not alone.

  4. Most of your list can be applied to those who open a franchise. Also, many MLM companies DO focus on the product and sales rather than recruiting. So if someone joins an MLM and doesn’t recruit and just sells product, would it be the same argument?

    And a handful of companies put a cap on how many can sell in an area.

    And people who do MLM file their taxes the same as any other business owner as well. It’s a business in the eyes of the government.

    Wondering where you did your research?

    1. Everything she says there is true. She probably did her research just like me: reading about it and also being part of an MLM for a period, in my case- a year. I think she actually mentiones having been in contact with 2 MLMs. And I’m talking as someone that lives in another country. They are a worldwide disease now.

      At the beginning, I was also brainwashed into believing that this was my own business yada, yada, yada. You don’t get fired from your own business. After a year of working diligently, me and my upline had some arguments that were in many cases not even profesionally related.. and I had to leave. That was the moment I had to be honest with my self, look back and realize that in reality I was not working for myself, but for a company, just like any employee. That I had no real decision power regarding products, who I was bringing in my team, I could get fired, there were standard procedures maybe I didn’t see the point of, but had to comply with etc. There were people I didn’t like but was forced to accept because after meeting them, my boss liked them or people I wanted and who left/were fired through nasty tactics. I was never in control, but more of an employee with employee duties, but less job security. And there’s a lot of lying, manipulating and playing with your emotions (pretending they are your friends to keep you in). I have friends who own their own business and it is nothing like a MLM; they are entrepreneurs. MLM agents are not.

      People working for MLMs are so brainwashed that they get mad every time you tell them the truth. MLMs are very cult-like because that’s the only way they can keep you in. 99% of people are not suitable for working in a MLM. 98% of people are not suitable for being entrepreneurs either. And they know this. So they have to recruit, recruit, recruit because they sell what they need this way but also because it’s a number’s game to find that person suitable for their It’s a recruting business. And you have to be non-emphatic because there’s high staff turnover: people leave in the first week, 2nd , 3rd, in the 2nd month etc. in drones. That is the business model for a MLM in general.

      What I’m really sad about are the agents and clients I brought to the company and can’t take with me. It’s in the financial sector, so the friends and family members I brought as clients (including myself) will remain in the portfolio of my boss (who hates me) and they can’t get out without suffering a huge financial loss. I feel like I let them down so much because they trusted me and I had made up my mind to take care of their long-term financial plans for as long as possible. I can’t believe I actually thought this was my own business and never foresaw this coming (although there were signs). I repeat: working in a MLM is NOT your own business. And saying it is will not make it so. You can say that you can fail at businesses too. But I did not fail profesionally at all. I was doing more than ok. They can eliminate you for superficial reasons because they work in independent teams and there’s no accountability. And for the agents: I was never paid for training them; my boss will be the one that will benefit from my work. I requiested to be moved to another team, but it’s virtually impossible in MLMs in general. It’s worse than in a normal company. Only the 1% make it decently, and not even 0,5% get rich. The rest are doing mediocre at best or are even in a loss, but they keep dreaming.

    2. Now I want to answer your question as to why a MLM is not really like a franchise business and not really owning your business in general. I don’t think there’s anything wrong with MLMs as a business model. It’s perfectly legal. But I do have a problem with the lying and manipulating that goes on in most of them, first one being that they try to convince people that it’s like running your own business.

      1. First off all, regarding taxes, just because you pay your own taxes does not mean you are an entrepreneur. Most American citizens, for ex, pay their own taxes. In a MLM you sign a contract as a collaborator; this way they can avoid paying a base salary and taxes. But now this is your responsibility, so you must have a legal form to do this: registered sole trader or public limited company. The people you bring in are not hired as your employees, but they become collaborators at the MLM company, under you and must also find a legal form, like you did before. You are effectivily just a one man show in terms of taxes.

      This is not exclusive of MLMs. I work as a trainer of foreign languages and communication skills in my home country and many training centers/companies have developed the habit of not hiring you on as employees, but as collaborators. They just pay you for the actual hours that you teach. This means I need to have a legal form so I can pay my taxes. It makes sense for them to do this because of the nature of the work (the workload is not continuos). Do I consider a trainer working for such language centers a business owner? No. He’s a freelancer. The same with MLMs. It’s better for them if they pay you based on results.

      2. MLM companies are sales companies: they sell products/services and … dreams. If you don’t do any recruiting and are not interested in their career plan, I don’t know how useful it is for you because at the base level their commisions are lower than in other sales companies. You’re just a collaborator salesperson, a freelancer essentially. A freelancer is not a business owner. If you resign tomorrow, it’s like working with any other company. You leave and that’s that. But I can tell you many companies will not invest in collaborators who don’t want to recruit because it doesn’t suit their purposes.

      3. Ownership : you buy a franchise, you don’t get hired into one. You effectively own it and can resell it after you grow it. You start from the top of the pyramid and work your way down, creating a base: you’re the founding manager and you hire employees. You essentially expand your business from the top. No one can fire you or surpass you, no one can take your company from you, and you have a lot of decision power even in a franchise. Not the same in MLM. There you start from the base of the pyramid, like in any multinational company, and you make your way up by fullfiling certain criteria (nr. of people recruited + amount of sales). In a MLM you do not own anything from the company and if you leave/get fired, you leave with nothing.

      Conclusion: working in a MLM is being a collaborator freelance salesperson with a legal form (registered sole trader); you are more like an employee at a multinational sales company because you have no ownership in it and you have to work your way up from the bottom; it is riskier and more insecure than in a traditional company, but the possibility for rewards is higher.

      It is important that people understand what they’re getting into because most people are not suitable for this kind of job, including those with an entrepreneur mindset.

  5. Cole // Cole Smith Writes

    I did Mary Kay for several years and it was always a struggle due to my introverted nature. My husband showed me a Shoe comic strip about “Mary Kay commandoes” that kind of offended me, haha.

  6. I am really sorry but your sources of information are not correct and it very much seems to me that since you failed you wrote a complaining post. I am doing a lot of things in life such as management in corporate, owned my own “traditional” business and also network marketing. Oh and I am a procurement person, not someone whom jumps emotionally on sales. The fact that you say those things about the mlm companies simply means that you have no real knowledge of being an entrepreneur in general. There is no such thing as focus on recruiting. If there is that is because that is higher volume of products sold. No legal company is allowed to operate on basis other than product sold. If you take the time and see some companies out there you soon realize that. But you need to do some research, minimal at least. On the product changes and promos you are as mistaken as you could be. If you are a retailer and buy your merchandise from non mlm producers then you will have no influence on the product. However in mlm it happens on monthly basis that the promos are done based on reps feedback and product development as well. Also since you are an independent distributor you are not part of that corporation. Read the contract, all liabilities are waived. Of course there is the need of playing according to some rules, for example not selling on ebay. But have you not found anything like that in the traditional b2b/b2c arena? Again, if not please look around because the exclusivity is more often present there. On website, the replicated ones are meant to offer the means to have the buying done directly from company so you do not need to keep inventories yourself, arrange shipping and all complex work that comes with that. Any normal mlm company will let you do your website though. Also if you start earning regularly you need to estsblih yourself as a business, that is register as one.

    1. Alexa,
      I’ve done plenty of research on MLMs and like I say in the article I’ve sold for two of them. I didn’t fail and write a complaining post. I got fed up with the un-flexible, recruitment atmosphere and decided that running my own business was a better fit for me. I’m glad that you’ve had a different experience.

      1. What if there was an MLM that didn’t have distributor kits? Like, you can’t even buy one. Everyone starts out as a customer and if you decide that you want to share, because of your experience, you can become a distributor for free? FREE…No other fees!!
        What if there was an MLM who owns the patents on a products that doctors, clinics and health practitioners use? Yes, they buy them through the MLM. They decided not to judge the business model that one man took his product to market because they work and they are in the PDR. They need them, so they “joined an MLM” to get it. This industry is 100 years old and I can’t believe that there is STILL this mentality going on about MLM. So, to address your 10 points, here’s what I have to say:
        1. EVERY business is controlled by others. I have owned 2 non MLM businesses. One was home interiors (I was at the mercy of the wholesalers) and the other was an clothing boutique (I was at the mercy of the suppliers)…both were very successful.
        2. Lame excuse. If you don’t like the products or think they could be better, why join in the first place?
        3. Not true with all companies. In fact, mine (as I mentioned above) doesn’t have business kits.
        4. Again, a very broad OPINION. Most people start businesses to make money…You did.
        5. I think this is a good thing. I would hate it if someone did some advertising about the same product that I sell and made false claims, added an ugly image or misspelled things. Not everyone has the same level of excellence. I call it “protection”.
        6. Lame! I have never been promised to do NO work and make lots of money. The people that say that should be fired. There is no integrity there. Its people like that that give this profession a bad name..not to mention…making false claims is illegal.
        7. Some teach that…they are not the successful ones. I teach my team to NOT cold call. That’s the fastest way to fail!
        8. That’s why you choose a product that is consumable and sizzle (little to no competition). If you choose a product that you can get at Target…you missed the point of finding a “sizzle product”.
        9. Sounds like you had coaches that were not trained to coach. You had a bad experience..but to categorize MLM as a bad business model is really just based on your experience is, sorry to say, ignorant.
        10. Again, not all companies. Mine is free.

  7. I have to say most of what you said does apply to franchises and they are businesses. And although I am not a fan of MLM’s, MLMs really are businesses as well, just not in the
    traditional sense.
    Freelancers, independent contractors, etc, all are still businesses, its just many are formed as Sole Proprietors. In an MLM, you still need to track your Sales, cost, operating expenses and profits. If you don’t, you may not receive the tax write offs that you are eligible for as a business entity. Look at doctors and lawyers, who are Independent contractors. The real issue with MLM is that the business model doesn’t work for the vast majority of people, and some people spend a lot of time building it, to lose it. And like you, having gone down that road, I would never go down it again. You spend way to much money on a very flawed business model. Instead, you can put your time, effort and money into building an asset that is salable. So, although I disagree with the fact that it’s a business, I absolutely agree with your conclusion on the fact that people need to STOP investing their hard earned money into MLMs.

  8. I’m honestly wondering why do people who hate MLMs have to try to convince everyone else to hate them? I’m also baffled at the fact that anyone would even have this conversation? THE IRS, SECRETARY OF STATE, & FTC HAVE ALL DEEMED MLMS AS, “LEGAL AND LEGITIMATE BUSINESSES,” and the people who are in them are ALLOWED THE SAME 475 BUSINESS TAX DEDUCTIONS that they allow the, “real business owners” to have.

    So to try to convince people that it’s not a, “real business,” is just flat out ignorant on your part, since you are not a fugue of authority in getting to decide what’s a, “real business,” and what is not.

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