The lure of the MLM is a powerful one. On the surface MLM or Network marketing businesses are very attractive. The testimonials are inspiring as there is the usual line-up of successful business owners living the good life with luxury cars, beautiful homes and no debt, and all because of the “product.” There are even rags to riches stories with someone who was on public assistance at one point in their life and now lives “cash rich” with all of the accoutrements of success. No doubt these testimonials can all be substantiated in detail, as they must be to remain legitimate to be claimed. Each testimonial would have you believe that you are most certainly mentally challenged not to join this organization. Indeed those who have become successful are living proof that the “product” works. It’s not the product though as I will explain.
Let’s skip forward in time to your own experience with the “product.” You’ve been at it for almost a year now and have worked your way up through the ranks. You have moved up several levels in the organization and your up-line boss is very pleased with your progress. You are now at a level that allows you to buy new product at a substantial wholesale rate and the per unit profit potential is substantial. The funny thing is you really haven’t earned a net profit yet. You have used most of your own cash and you are close to your limit on your credit card(s). Sure you’ve sold products and have a small down line selling for you but you still have a large “inventory.” After all you had to buy inventory to move up within the organization, as you were told by your up-line boss. You were also told that, even though this isn’t a requirement, you need to build a large “down line organization” which equates to building a sales force under you. This requires you to actively solicit and recruit down-line leads, which by the way your up-line manager has a recommendation for if you are interested in having those leads sourced for you by a totally legitimate and reputable company.