Great comment and actually very enlightening I’m sure for a lot of readers because it was truly enlightening for me! I even had to do some research on my own and look up what a ‘Ponzi Scheme’ was. For those who are interested, here is where you can find the wikipedia definition of ponzi scheme:

http://en.wikipedia.org/wiki/Ponzi_scheme

I thank you for your contribution as an experienced MLM’er (is that a word?) to the blog. I agree wholly with your comment in terms of starting your own MLM with a product and affiliates. I say I agree wholly because I currently have that:

http://www.theroboformreport.com/indexa.html

I would also say that another form of a personal MLM would be a membership site that charges a monthly fee. I have a membership site myself but at this time it is completely free of charge:

http://www.booksbonkers.com/CMSI

These are great ideas for streams of income. Me myself, I just got started in my first MLM opportunity. Why, you might ask, would I do that if I already have some forms of my own MLM? Well, very simply stated, the economy.

In today’s economy if you don’t have multiple streams of income coming in you could find yourself up S*@#’s Creek without a paddle, very fast I might add also. So I wanted another source of income and I believe I found it with 5LINX. I have been promoting this MLM to everyone I know because it’s not a company that sells ‘potion lotion’ or vitamins. They market products that people use day in and day out. Even people in forecloseure, having their car impounded or even getting layed off!

They market telecommunications. Even the hard pressed still have their cell phones on! And when comparing them to all of the factors that you mentioned would kill most MLM’s, they even pass that test with flying colors. The link is in the post for any interested in what 5LINX is or what they do.

Thanks for your contribution Tom!

May All Your Ventures Be Met With Success,

Omarra Byrd

I’ve had a few years experience with MLM and here are my thoughts. I don’t believe there is anything inherently bad or unethical about the business model. The only problem is: it’s been so badly abused by unethical people, and so had gotten an unjustified bad reputation IMO.

Like any heirarchical system, the people at the top make the most money. That’s true even in Wall Street. Look at the “insider profits” lawsuits for a great example. The people at lower levels can also make money with good effort and marketing skills, and here’s the clincher, as long as the program is ethically run and the market niche being targeted doesn’t get saturated.

Sure, I’ve made money with MLM, and I think anybody that’s put a little effort into it will be able to honestly say that they have too. However, in the long run it seems never enough of a return to justify the expense of capital and labor involved.

It’s important to realize that any system that has too many levels (say past 2 or 3) can really never make money for those at the lower levels unless it’s a ponzi scheme. That is, where the money is made from the “recruiting” and not from product sales. This is clearly illegal in the USA. Check out the current “Madoff Scandal” for more details as to how this happens at even the highest levels of society, even on Wall Street.

This occurs because in a typical system over 3 levels deep the matrix gets so wide and full so fast that “market saturation” occurs. This is no myth, it really does happen, which is why most MLM systems fail in just a few years as members lose all faith in the system to generate income.

Now, to really make money… it’s best to start your own MLM. And, the best way to do that today is to sell your own products using your own affiliate program, say up to 2-tiers deep. Now, you have everyone else spending money for the marketing to sell your product. You can do this by exploiting http://www.clickbank.com or http://www.click2sell.eu to find affiliates. Both work well. Of course, you’ll still have to have a great product to sell, and have an automated system to handle everything. But… it’s doable, and can make a lot of money.

Love your post, and there really isn’t enough discussion on this topic anymore. I think people have thought MLM has somehow “died”. In fact, as far as I can tell, the opposite is the truth. I just think that better, more ethical systems are now being put into place.

That can only be good for everyone.

Tom