Give me the skinny on MLMs

Disclaimer: 7million7years does NOT participate in any MLM either as owner, member, participant, or promoter … so there!

I wrote a post last month about a rumor that Warren Buffett had bought half a dozen Multi-Level Marketing (MLM) companies. He didn’t … I’m almost, absolutely positive about that. He may have bought one (at least, according to one of our commenters) but I couldn’t even find any independent verification of that.

But, if he did …

… why MLM‘s?

Well, they are one of the many ways that people use to try and build additional income streams … and building additional income streams are one of the key Making Money 201 steps to building wealth (since, you can’t just save your way to wealth).

Now, before I tell you more about MLM’s let me share the following:

MLM’s don’t work for me … I don’t have the personality for them: you need to be able to ‘mine’ from within your circle of friends and acquaintances; you need to be able to also ‘cold call’; but, most importantly you need to be really, really persistent.

I’m none of those things (though, I have learned to cold call … yuk … and, am a little more persistent than I used to be), but …

… it’s this third characteristic that (if well controlled) can help you in ANY endeavor!

Having said that, MLM can be an astoundingly good business model for the operators.

And, if you join because you use and love the product (not just because you can propogate membership), for the members, as well. [AJC: if you choose a highly reputable one]

Think about it this way:

i) If you love the products and will use them anyway, then you get to buy at ‘wholesale’ prices.

Well, not quite … and you usually have membership fees and ‘starter kits’ to buy. But, if you have compared prices and believe that you will buy enough to justify any ‘upfront fees’ then why not buy in?

ii) If you love the products, some of your friends might as well.

Why shouldn’t you subtly recommend them to your friends? If you used a product that you loved but didn’t sell it, wouldn’t you still recommend that product to your friends and family without hesitation? And, if you owned a store in the local mall, wouldn’t you want your friends and family – and wouldn’t they be happy to – shop there?

So, why not sell to your friends – how convenient for them!

Just don’t commit the sin of trying to cajole your friends and family into either buying more or joining just so that you can make more money … keep the attitude of trying to serve them, not have them serve you and your interests –  even if they appear to be happy to do so [AJC: I assure you, they are just being polite].

iii) Now, here is where it gets tricky: if you love the product and it makes you money, why shouldn’t you introduce other people – even your friends and family – to the same opportunity?

In principle, no reason not to: just remember that your friends and family will be ‘expecting’ this move from you [AJC: with rolled eyes … and a sigh or two].

Here is where I failed: I just can’t bring myself to involve friends or family in my ‘deals’ … I don’t like the idea of anybody thinking that I am profiting from them.

But, that’s just me. In truth, most people are looking for an opportunity to ‘get ahead’, just like you … and MAY respond well to an offer to “find out more”.

Just don’t commit the Three Great MLM Sins:

1. Don’t drag your friends/family along to some ‘secret meeting’ – “I can’t tell you what I’m involved in, but if you just come along I think you will thank me later”. That’s just plain tacky … be upfront.

2. Don’t plead/cajole/cry to get your friends/family ‘into’ your meeting/s – MLM’s are a direct-selling business pure and simple; don’t confuse the motivational stuff that goes on [AJC: necessary, because MLM can be a HARD business to grow fast] with how YOU should act.

3. Don’t be persistent with your friends/family – Now doesn’t this conflict with what I just said: “most importantly you need to be really, really persistent”?!

Yes, be really, really persistent with anything you truly believe in – including your beloved MLM – just don’t expect your friends/family to be the same … be persistent with the business, not the person.

In other words, it MAY be OK to politely, subtly ask a friend/family member who has expressed: (a) some liking for the product, and/or (b) some desire for a new opportunity … ONCE.

Anything more is simply out of bounds!

To me, the same rules apply to anybody that you meet: ask them once (OK, if not a friend or family member, go ahead and ask them twice … after all, you don’t want your new MLM Family to laugh at you, right?) … but, twice is enough!

Oh, and don’t do what my multi-millionaire friend does (who joined an MLM after becoming rich) …

4. Don’t plaster your brand new BMW with tacky vinyl stickers that say: “Want to lose weight now? Ask me how!” …. just … don’t 🙂

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0 thoughts on “Give me the skinny on MLMs

  1. I’m glad to see someone taking a more pragmatic approach to MLM and not out right dismissal because of pre-conceived business model reputation. As with any business venture, due diligence is a must, and it must start with you using and believing in the company’s product(s).

    By the way, I checked the Berkshire Hathaway website and the only subsidiary company that seems to me is MLM is Pampered Chef. And I’m not sure it qualifies as MLM.

  2. @ ZooDog – looks like we’re on the same page; I saw Pampered Chef, too. Is it MLM, Party Plan,or other?

  3. Just found your blog. Very cool!

    Pampered Chef is a member of the Direct Selling Association ( The DSA is the ethical governing body of MLM’s. So, you can safely say that Pampered Chef is an MLM. It uses a “party plan” business model.

    Many of us in mlm also do not like the fact that we are constantly taught to “hound” our friends and relatives to learn abour our newest and greatest “opportunity.” Some of us are going off on a slight tangent and using Web 2.0 to market on line to find people who are interested in our businesses. It’s a solid marketing strategy and it doesn’t scare your friends away! Pretty cool stuff in my opinion.

    [link removed]

  4. Interesting article.

    Although I will disagree with you about what it takes to win in MLM. I have made tens of thousands of dollars in MLM without ‘mining’ my friends and family. Out of thousands in my organization, I have only brought in 2 friends and/or family members…that’s right, 2.

    Also, I do not cold call. People always call me. I strictly market on the Internet in a funded proposal fashion showing people how to do it and attract those already looking. I’m not interesting in talking to people who have no idea what MLM is. Not saying there’s anything wrong with that, but I only want to talk to people who are open-minded enough to understand the industry.

    I’m not invalidating your points, just giving the readers a different perspective since I’ve made tens of thousands without doing any of that nonsense MLM companies teach.

  5. 4. Don’t plaster your brand new BMW with tacky vinyl stickers that say: “Want to lose weight now? Ask me how!” …. just … don’t

    HA HA.

    I Love That Line!


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