What is MLM and Network Marketing?

If you have been searching online for a way to make money I am sure you must have come across Multi Level Marketing (MLM) opportunities. So what are MLM (network marketing) opportunities really all about? Does MLM live up to the hype about it?

In my personal opinion no, it doesn’t, and I’ll explain to you exactly why.

What is Multi Level Marketing about?

In Multi level Marketing (MLM), also known as Network Marketing, distributors sell products or services to the public via word of mouth and/ or direct selling. Distributors earn commission on sales they have made. Distributors can also recruit others into the program and they will earn commission from the sales made by their recruits and their down-lines too up to a certain point.

So this sounds great right? Not only can you sell products and make commission but if you recruit people you can earn commission from their sales too! And if they recruit more people you can earn from them too…. and so on.

Hang on doesn’t this sound like a pyramid scheme?

According to MLM companies, no this is not a pyramid scheme, it is “network marketing” which is completely different.

What is multi level marketing about


What I can’t understand is what makes Multi Level Marketing not a pyramid scheme? Apparently the fact that a company sells products makes this a legitimate type of business. Apparently the focus of the company is on products and NOT on recruiting people.

Ok so let’s just ignore the small problem that this looks suspiciously like  pyramid scheme for now. Let’s address some other points first. So how does multi level marketing work?

Multi Level Marketing Joining Fee

Yes if you want to join an MLM company and be able to sell their products and recruit others there is always a joining fee! Why would you need to pay to be allowed to make sales for them?

Yes I know, they give training and marketing materials and sometimes product samples to be able to sell and let people test them … and blah di blah other reasons.

I am an affiliate marketer and I never have to pay anything to be allowed the honor of marketing for other companies. They want me to make sales for them so they GIVE me all the marketing materials I could ever need when I sign up. Why wouldn’t they? They want to make money don’t they?

I can certainly understand if I am doing face to face marketing and I need printed things like business cards or brochures, but that should surely be a choice that I make to use those marketing aids if and when I choose to. I don’t want to be forced to purchase marketing materials.

And on the training, most websites that I have signed up to as an affiliate have provided me with training materials on how to market their products, why wouldn’t they? It is in their best interest to do so.

So why is there always a cost when signing up? No matter which way I look at it, it makes no sense to me. Unless of course it is a pyramid scheme… which we will address later.

MLM Product Prices?

The cost of goods bought through MLM is quite frankly insane. So the marketing thing goes that the MLM products are such great quality, they are needed by everybody…blah di blah di blah so you will make lots of money promoting their products.

Ok so here are some interesting things I have found online. Lets have a look at some of Amway’s products. I just chose Amway because they are the largest and most well known MLM company. I also chose them because I had personal experience with them about 15 years ago (which I will share with you later in this post).

MLM product prices

So this one above is really interesting to me firstly because you are not allowed to sell your Amway products on Amazon. The second thing is why would you sell your Amway products on Amazon at half the price? Maybe some poor distributor is trying to flog their stock to recuperate just a little bit of the money they lost?

Just for interest sake go to Amazon and search for this exact product description (Nutrilite All Plant Protein) and see how many people are flogging their Amway products!

Now let’s have a look at what a comparative brand is selling All Plant Protein for.

MLM product prices

Oh wow, that is a difference of $35.71, literally double the price.

Just in case you were wondering this is not a once off case of MLM products being more pricey. It is the same for every single product in every single MLM company. They have to be more expensive to be able to give each person in the down-line their little cut of the price.

Over inflated prices are almost a given with MLM. The products are not any more quality that you can buy at your normal super market yet they claim to be one of a kind, quality products that will sell easily. Don’t be fooled.

The Hard Sell of MLM

So what do they teach you about marketing. Well mostly how to try and shove this opportunity down anyone and everyone’s throat… wait did I say opportunity or product? Yes I said “opportunity” because once you join an MLM company the focus moves far far away from the products you are supposed to be selling and you are pushed to recruit everyone and anyone you know into the business.

The marketing techniques usually start off with having to make a list of everyone you know starting with your family and close friends. Ending off with the receptionist at your kids school because well you know her name so you know her well enough to try and recruit her.

They then go on to teach you how to always be on the hunt for new recruits at all times. Anyone you come into contact with is a target. If someone bumps your arm on the street you have made contact! Go for it!

Inbox everyone you know on Facebook, hell even if you don’t know them send them a message anyway! All they could do is say no, who cares who you annoy in the process!

This is not the way that I want to live my life. As I mentioned previously I have had some experience with MLM many years ago and it still leaves a bad taste in my mouth.

The MLM Business Model is not Sustainable

MLM businesses depend on new recruits. If there are no more new recruits the business will collapse. Does this sounds stable to you?

The business does not depend on product sales, it can’t! Not with prices like that. It will be incredibly hard to sell any products at all. I know I have been there.

Is Multi Level Marketing a Pyramid Scheme?

Well let’s see what a pyramid scheme is first. Here is Wikipedia’s explanation:

A pyramid scheme is an often illegal, unsustainable business model that lures members via a promise of payments or services for enrolling others into the scheme, rather than supplying any real investment or sale of products or services to the public.

Ok so the difference between a pyramid scheme and multi level marketing lies in the fact that MLM involves products. However these products are over priced and there is usually no focus at all on products… and you have to buy into the program.

Hmm let’s have a visual look at what MLM looks like…. sure looks like a pyramid to me!

Is Multi Level Marketing a pyramid scheme

Is Multi Level Marketing a Scam?

Well apparently it isn’t according to a lot of people. Some people rave about Multi Level Marketing and claim you can make good money.

Perhaps if you are ruthless with your recruiting and don’t care whether the products are over priced you can make some money. The point that I want to get across is do you really want to do that? The truth is that most people will not succeed with MLM so 99% of the people you manage to recruit into an MLM scheme will lose all their money. I know this and if you are familiar with MLM you probably know it too. Can you with good conscience promote a scheme like this?

I have personally not found one MLM opportunity that does not stink, so this makes me sway towards MLM being a scam.

is Multi Level Marketing a Scam

Let’s look at the facts here, and you can read some of my reviews of multi level marketing opportunities on my website. I can probably make some nice money from MLM opportunities. I certainly have the set up for it. All I have to do is change my reviews of MLM opportunities to positive reviews and add in my affiliate links!

I am sure I will get sign ups… what do you think?

I know I will get sign ups, but I also won’t be able to sleep at night. It is dodgy and just plain wrong.

The Pros and Cons about Multi Level Marketing

Ok so let me me try and be objective here and give some pros and cons about Multi Level Marketing…

Pros of Multi Level Marketing

  • The start up cost of your business is relatively small
  • Instead of hounding friends and family you can promote online (there are unlimited people searching to make money!)
  • The product is already established
  • The business is already established
  • Promotional materials are ready on hand
  • The person that referred you into the business might mentor you and help you get started

Cons of Multi Level Marketing

  • It is considered a pyramid scheme and a scam by many (me included!)
  • The products are over priced and hard to sell
  • You will need a very thick skin to handle all the rejections and negativity surrounding MLM
  • Most people never make it with MLM, it is not as easy as the MLM websites make it out to be!
  • There is a cost to start, you will need to pay before you can earn
  • There will be loads of other people trying to promote the same opportunity, using the same methods and promotional materials as you

My Personal Experience with MLM (Amway)

Like I mentioned previously in this post I have had experience with MLM. When I was in my early twenties a friendly neighbor invited me around for coffee and told me to bring a friend. I thought this was very sweet so I arrived with my best friend in tow.

Shortly after handing us each a cup of coffee and a biscuit she dragged over a flipchart on a stand and started a hard sell of the Amway opportunity. My first impression was that it was really wrong of her to do that. However the fact that my friend and I were always looking for new ways to make some extra money won over. All we had to do was buy a starter pack for about R600 each. This would give us our sample products and our marketing materials.

Honestly we were quite excited. We were told it was easy to make money, we would be taught everything we need to know to be successful. When our starter packs arrived and I opened it up to find hardly anything inside I must say my heart dropped. R600 was a lot of money about 15 years ago, I was expecting a Santa sack of things, but instead my things probably could have fit in a shoebox.

I started following instructions and first spoke to my mom to try and get her to buy the products. It was my first dose of reality. She rolled her eyes and said “Really? Amway? Oh dear, this is a pyramid thing. No thank you.”

Let me tell you I felt very stupid and annoyed. I approached a few more people with the same reaction. And no I had never heard of Amway until then. Turns out lots of other people had too. The people that hadn’t heard of it were listening to me until they saw the price of the products and I lost them immediately.

I was told there would be a training seminar soon and that thousands of people would attend. My friend and I were so relieved, surely we were doing something wrong. We had been trying to sell the products for about 2 weeks and all we got was negativity back. The Amway people were so positive and friendly, they were motivated and always got me and my friend back on track mentally.

We arrived at the seminar all amped to learn how to sell these Amway products, we were soon going to be on our way! However this seminar was not at all what we expected. They did not focus on selling any products. We were told how to corner people, how to suck them in with how great Amway is… how they can make so much money selling these amazing products, how they can become rich with this opportunity. How they will receive awesome marketing materials and training and support to sell the Amway products.

What a load of BS and what an eye-opener. I suddenly saw Amway for what it was. I looked around me and realized I was in a room where it was like a cult following. The people were all delusional and filled with hope. I felt like everyone was being brainwashed and everything was lies. I felt so sad for everyone there.

So that was my first taste of MLM and it was bad. I left Amway of course and I have been approached many times with MLM opportunities. No thanks, this is not for me.

Are you tired of scams or working online for pennies? Check out my #1 Recommendation!

Here are some really well known MLM opportunities that I have renewed:

I hope you enjoyed my explanation of what Multi Level Marketing is all about, have you got anything to add or have you had a different experience? Please leave a comment. 



Mommy to a pigeon pair, blogger and online marketer. Lover of chocolate, good books and buckets of coffee.


  1. I invested $5000 Canadian back in the 80’s on a water/air filter company MLM called NSA – National Safety Associates. Even the name is a marketing lie. They have noting to do with safety.
    The only time it’s good to buy into an MLM is if you’re 1st. After that you are just another sheep being led to the slaughter. It took me a long time to recover from that mistake. Like you said I felt so dumb and stupid. How could I fall for this? Our greed takes us over and we can’t help ourselves.
    In a way I’m glad it happened because we know the difference now and how to avoid it. What an expensive lesson they are.
    I mourn for all those people and for their losses, they are just ordinary folk like you and me looking for a better way.
    Thank goodness we found it here.
    Good post Lynne and thanks for sharing

    • Geez Peter, that was a huge loss compared to mine! So sorry you got conned like that.
      Like you say if you are first in you can make money, but at what expense? If other people are losing out below you how horrible!

  2. Hey great stuff! The pyramid scheme is popular even in Iran! Thanks for sharing!

    • Hi Maryam, yes it seems it is popular all over and now of course with the internet there are no borders to these schemes. Anyone anywhere is at risk!

  3. I’ve never been involved with Amway but I have a softer view on this type of MLM. There are some good opportunities out there as long as the MLM company really takes the time and effort to train their members. Many are just out to get as much money as they can without much concern for their sellers. However at one time MLM was a valid opportunity for a regular guy or girl to make a small investment and essentially start their own business.
    Now I think this type of business model is becoming a thing of the past. In the online world surfing the net to buy stuff is where the real money is to be made.

    • Hi Chris, thanks for your input. I always love to get other opinions, especially on topics like this. I know there are loads of people that love MLM! A very popular MLM here at the moment is Herbalife and apparently lots of people are making some nice money from it. Once again just not for me!
      I also think this business model is seriously outdated.

  4. Hello, I also have a personal experience with Amway in my teens. The guy who approached me was one year older than me and as you said he’s trying to get me into the membership and his focus is on the revenue but not the product itself. I didn’t sell an Amway product and have not recommended anyone to use them because I am now looking ways to make money online.

    • Hi Adrian, yip sounds like you experienced pretty much the same thing as me. I hope you have found an answer to working online? If not check out my article on affiliate marketing, much better than MLM and you can decide exactly what you want to do!

  5. Thanks for your article…I have been part of several MLM companies and though I have not been successful at any of them. I certainly have made a lot of friends. I started out in Amway years ago and ended up with a company called send out cards. It’s a great company with a great product and it is not appear amid scheme. I found out that to be part of an MLM network you have to be a person who knows a lot of people, or have a large network and know how to sell. Building a distributorship is very difficult and many people fail. I would not recommend a multilevel marketing company to a newbie or person just starting out it is way too difficult.

    • Hi Mac, yes I can see why a newbie shouldn’t attempt MLM! I know a lot of people but I really don’t want to push any company or make money online scheme on them when I don’t agree with it. It just feels so wrong to me.

      So you have tried a number of MLM companies already? I would love to hear more about your experience with those companies 🙂 That is exactly the problem I have encountered is that these MLM companies make it sound so easy to make money when in reality it is terribly hard. That to me is dishonest.

  6. Hi, there Lynne.

    How’re you doing?

    Thank you for this article. It’s funny because just this morning I woke up to found a comment on my site inviting me to join an MLM company called Four Corners Alliance Group. The guy was saying that he was a member of WA and that it didn’t work for him, so he gave up and joined that company.

    He told me that I can join for only a one-time payment of $18 and refer only 4 people. After that, I’ll be making thousands of dollars in a short period of time.

    The thing is, I don’t believe in shortcuts when it comes to work. All I did was to move his B I G scammy comment to the trash and then move on to work on my website.

    Your article is a great source to help people and prevent them from falling victims to this scheme. Keep up the good work.


    • Hi Imad

      Yes I get contact daily by MLM’s asking me yo get involved. I think they see my website and hope that I will be able to attract loads of referrals under them!

      I have heard of Four Corners Alliance Group but never looked into them properly, they are on my list of companies to check out soon.

      Yes I hope to help people understand exactly what is involved with Multi Level Marketing. It really is a shame if people get tricked into it. However if they go in understanding what it is about that is a different story. It does work for some people, that are ruthless hard sell marketers.

  7. Lynne
    Great article, I have been scammed from MLM when I was looking for opportunities to work from home and in my experience, network marketing is not a good idea for someone that want to build a decent online business, I learned that if you want to make money online you have to work, there is no easy push button.
    Thank you, Santy

    • Hi Santy

      Yes I agree with you there, if there was an easy push button we would all be laughing all the way to the bank by now.

      So sorry you were scammed by MLM before, I think it is one of the worst because not only do you invest your money you also invest your time and effort and reputation!

  8. There are a lot of legitimate online MLM systems, but there are also some real duds out there.

    One good example of a MLM scam is Empower Network. I laugh whenever someone approaches me and want me to buy that. Even the BBB hit them for offering a ponzi scheme. Have you heard of Empower Network? What are your thoughts on them?

    • Hi Garen

      Oh yes I have come across Empower Network, and did a review on them! Definitely a company to stay far away from.

      Yes I am sure there must be a good MLM somewhere, I just have not come across one personally yet.

  9. Hi Lynne, Thank you for educating me on MLM/Network Marketing. You made many great points. I wasn’t aware that you had to purchase marketing material. I never looked into the products they somewhat promote so I had no idea how pricey they are. It makes sense though. You’re right, my conscience wouldn’t allow me to sleep at night knowing that I possibly, but unlikely, am making money deceiving people. Wealthy Affiliate sure seems like an honest and profitable way to have a small online business. To me, putting my efforts into an honest business is way better than wasting my time trying to recruit people knowing full well that failure is highly possible.

    • Hi Suzette
      Glad to help you see what MLM is all about. Mostly they don’t say you have to purchase the marketing materials. Marketing materials and training is “included in the registration fee”…. which is really BS isn’t it?
      I can’t see why anyone would need to pay to market a company and their products. Why not just become an affiliate marketer for free, get the training and marketing materials for free and earn commission from sales. No need to pay any joining fees!

  10. Thank you for this eye-opening article. I have always wondered why Amway products are so expensive – your argument makes a lot of sense.

  11. Hello Lynne! I could not describe better how MLM companies work. Well done! I’ve had a few experiences with MLM too and I can tell you that my feelings about it are just the same. I also tried to recruit people and I felt really bad about it. I know people that make money from MLM, but yes they cannot sleep at night worrying about their downline…
    Thanks for this great article and keep up the good work you are doing!

  12. Hi Lynne, another great article, and another great warning! It doesn’t look like you’ll ever run out of schemes to write about does it? Sad all the scamming going on out there! I remember MLM from way back when, and I do remember the water filter. A colleague of mine was trying to flog those, and it really did feel like a hard sell. I’m not good at asking for anything, so I can’t imagine how uncomfortable it must be, constantly hustling to find people to sell products for you. I wonder how they convince people to buy products that are available at half the price they’re asking? Maybe they focus on those who aren’t that familiar with shopping online. All I know is, MLM is just another name for a pyramid.

    • Hi Hindy
      Yes I know exactly what you mean. I checked out the water filter, its quite amusing! No I will never run out of schemes to review! I have about 40 odd on my list and I come across more daily.

  13. Lynne,

    All I can say is WOW! you nailed it on the whole MLM thing. I can’t believe how people still fall for them. It’s plain to see in your price comparison, that the product is actually a lot cheaper than we are led to believe. That’s only because there are so many levels of people to pay out on the way to actually getting it thru a dealer! Who ever is listing it on the internet is likely making a killing in the volume of sales because he’s cutting out all those 3rd, 4th, 5th… parties.

    Anyway, your post should be considered very valuable to anyone thinking about handholding with an MLM. Thank you for such a comprehensive look into them.

    • Hi Debra, thanks for sharing your opinion. You have highlighted one of my main gripes with MLM, the overpriced products, the next issue I have is that the products are often very standard or even bad quality, sometimes completely useless. It is one thing offering a great product and asking a lot for it, but to offer nothing special and expect people to pay those prices? Just not nice.

  14. Hi Lynne! Great article. I love your comparison of the product sale prices. In my efforts to find a viable at-home business, I have considered at least three different MLM opportunities. Ultimately, I decided that it wasn’t for me, but I know some SAHMs who are finding happiness and financial independence from these types of businesses. I wouldn’t necessarily call these a scam, but they are a trend. And that is the primary risk. You invest in and rely on products that may not always be so popular and could be replaced by another. Affiliate marketing has its competition and risks too, but you are right in that there is little to nothing you have to pay in order to get an online business of this kind up and running.

    • Hi Carmen
      Yes I agree with you there. I personally know a number of people doing Herbalife and they swear they are loving it and making more from selling the products. Herbalife has been around for a long time too. Although I have found a lot of complaints online about them. Thank you for sharing your personal experience with us.

  15. Yeah MLM marketing can be b***, as you said, the majority of them are scams and the sellers focus more on making money, too much on making money instead of showing their members and helping them become better cyber business people. It starts with the outrageous prices, I’ve seen some charging over $900, PER MONTH.

    • Hi LakanDula

      Yes my sentiments exactly, and the costs are so high too. I personally don’t think it is an easy way to make money at all.

  16. Hi Lynne , interesting subject for me always , as I have friends who are involved with MLM and quite often we have some debates.

    I agree with a lot of your points such as the hard sell , the recruiting focused marketing and that it is very hard to climb up the levels.

    But most of the times the people that believe in an MLM company it is because of the products.They don’t care about the price , they care about quality and they want to spread the word with the rest of the world.They don’t even care for the company itself.They found great quality in products.

    That Amway products you received were not of Top quality?..One friend of mine still is a member of Amway and he is very proud of this company.

    But if you ask me , I prefer other ways of marketing , like affiliate marketing , where the whole process is simplified and there is no complexed compensation plan.

    Good read , keep on blogging.

    • Hi Tasos

      Great points you brought up here, and yes I have experienced exactly the same thing. In my experience the quality of the Amway products really is not great BUT I have also come across people that rave about them.. go figure?

      I’ve also come across lots of people that love MLM and have made a success of it.

  17. Hi Lynn,

    Awesome website. I’m building mines now in relation to something similar to yours. I love how you’ve incorporated a lot of links people can access in regards to making money online. I also like the fact how you defined MLM and your experience with them. I too have experience with MLM. I think your website was very informative. Where did you get the free ebook from?

  18. Lynne your post is so on the money. Just a few years ago I got sucked into a MLM company with dreams of never having to work again… I soon realised what a mistake I had made when I was constantly being hounded to make contact with every single person I came across and tell them about the wonderful opportunity! Err are you mad I barely even know the person! So I soon saw I was not cut out for the world of MLM and the crazy cult that comes with it!

    • Hi Dawn

      Yes spot on! That is exactly how I felt about it when I joined Amway, it truly is a cult feel. It is not the way I want to live my life because everything you do is about pushing the MLM you are involved in.

  19. Hi Lynne,
    I have been reading all the comments. I just wanna ask about (TEN ) Team Effort Network Team Effort Global, Team Eagles Network. all same. Please also take a look at 4Life. Please have a review about them and kindly get back to me how do you find these companies.

    • Hi Vanessa

      Well I had a quick look at those companies now and being MLM they just don’t impress me at all. I know there are some people that love MLM and make money with these opportunities. For me they just give me shivers up my spine!

      I know that is probably not what you wanted to hear though. Have you considered affiliate marketing instead? It is just such a better way of doing things. For starters you don’t have to pay anyone to promote their products and you can promote anything you want. That is what I do and it is a great way to make money online.

  20. Hi Lynne
    I have lost money with Empower network,and few other programs,I did self published a book and wonder what suggestions can you offer to sell it online.Also I would be interested in promoting affiliate programs,any helpful information and suggestion from you would be appreciated.thanks.Ivan

    • Hi Ivan

      Sorry to hear you got suckered by Empower Network 🙁

      I would highly suggest you check out Wealthy Affiliate. They have the best affiliate marketing training I have ever seen. There is a free account so you can check out there website and what they offer. If you like it you can try their free account.

      I have written an eBook but I give it away for free on my website. I’ve never tried to sell an eBook though. You will be able to get this information and chat to members that have done this at Wealthy Affiliate.

  21. My two cents:
    I can agree that most MLMs are about the opportunity more than the product – which is both a fundamental flaw and unsustainable. That said, there is a legitimate and inherent value in network marketing – where a higher amount of education is required for any product. Affiliate marketing touches on some of the education, but in time this is an unsustainable business model too – if you were one of the first sites to sell product X, you would make money as interest grew. Once there were hundreds of sites selling that product, it became much more difficult to truly make money. A lot of people similarly wasted money on books and training programs believing they could get rich by simply selling on ebay or online. The reasons they don’t succeed are numerous – some include a flawed model. Yet we can’t truly judge the whole system to be “bad/evil/criminal” just because it didn’t work for some (even most).

    Again, I believe 90+% of MLM companies are peddling an over-priced product tied to an over-hyped opportunity, but I think it is short-sighted to lump all network marketing into the same bucket. I believe over time we will see this become a more legitimate business model with more sophisticated, yet transparent, approaches that reward those who influence purchases (e.g. personal trainers) rather than those that enable them (e.g. Amazon affiliates).

    I have an MBA from a top tier university and do not belong to an MLM, but I foresee them sticking around for a long time. Soon enough, we will see more stringent regulations and transparency become the norm, which hopefully will weed out the shady companies/sales people and sob stories altogether.

    • Hi Spencer

      Thanks for sharing your knowledge here 🙂

      I’ve spoken to some people that have made some money with MLM opportunities but those people are few and far between. So it is not impossible to make money with MLM, just highly unlikely.

      I disagree with you about affiliate marketing though as I am making money with it. I am not limited to just one product or just one company and I don’t have to pay anyone to sign up as an affiliate. Saying that affiliate marketing is unsustainable is a bit of a strange statement to make. That is like saying sales reps can’t make money or commission.

      There are so many amazing products, services and companies to affiliate with. I can’t see how affiliate marketing is an unsustainable business model.

      There are some huge differences between Multi Level Marketing and Affiliate Marketing, that makes affiliate marketing a much better route to go, especially when you are looking long term!

  22. Hello Lynne,
    Great article, it really opened my eyes. I was contacted recently by Online Team Builder, and due to my present situation in life I thought this was like a called from the Gods. “I can be my own boss? I can make tons of easy money?” It seemed to good to be true. I had a phone interview earlier today and got started with a free 7 day trial. It all seemed to good to be true, so I wanted to do some research on them. I couldn’t find much until I stumbled on your article here, and it gave me a lot of insight to MLM.
    But I was wondering if you ever heard of Online Team Builder and if so, do you think these guys are like all the other MLM companies?


    • Hey Mitch. I have to be honest here, I am not even going to waste 30 seconds searching for Online Team Builder. I am not even bothering to write reviews on MLM anymore. It is just another name with a different pyramid like structure… oh sorry I mean “matrix system”.

      MLM is awful, there is nothing nice about it.

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