I understand that mostly they don’t and its only the people ar the top of the pyramid that make good money but how does it work if you are just selling products on at a set price? Thanks
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You buy the product from the company. You’re in the hole. You keep whatever money you can get from however much you manage to sell. If you make more than you paid the company for the product, you’ve made money.
The problem is that the products are typically substandard and overpriced meaning you’ll have a hard time of that without leveraging something else, like your family and friends (guilt tripping) or if you have some small amount of local fame. The religious are often targets of MLMs so they can also leverage their church connections.
But there’s only so much the people close to you will buy, and it’s hard to reach beyond that circle. That’s why MLMs are just pyramid schemes in disguise; you don’t make money selling to your small group of friends and family. You make money by convincing some of your small group of friends and family to convince some of their groups to convince some of their groups to sell. Everyone selling still has a hard time because of the reasons so they make little to no money, but IIRC, you get a cut of the money those people spend to buy the products to sell, so it doesn’t matter if they sell or not.
Also just to point out an issue with your question, if you’re “*just* selling products” then you’re not mid-level, you’re base-level.
Edit to add an additional challenge to the selling: Once you start recruiting your friends and family, who are you going to sell to? Who are they going to sell to? There’s a lot of crossover, so they’ll either have to fight over shared relationships or focus on the ones unique to them. I’ve seen people try to go outside of their circle by “advertising” at restaurants (leaving cards or signs without permission), I’ve even had a coworker hold a meeting. In r/antiMLM there have been stories of bosses pushing it on their employees, cold “calling” (coldDMing?) people on social media, buying booths at farmer’s markets, flea markets, craft fairs… All desperately trying to get beyond the small circle of family and friends they haven’t driven away or bled dry.
A lot of people in the lower and middle levels of an MLM use the products themselves and have friends/family who they sell to as well. The majority of these people are not making any substantial profit from the MLM but are enjoying small rewards from selling a few products and keeping some for themselves.
Many of these people see small successes in the beginning and become overly ambitious about the prospect of adding on more people under them to buy larger quantities and they end up over-purchasing with no one to sell to, and have a garage full of product.
They don’t. What they WILL do, is promote a false narrative about how they are successful, making money hand over fist, and are only a few months/years away from leaving their day job.
MLM systems are DESIGNED so that only those at the top are turning a profit. Because, in ALL of these systems, the “product” is NOT what is being sold to all and sundry. The “product” is the PEOPLE being scammed into thinking they are on their way to financial independence.
The FTC reports 99% of MLM participants lose money. Other studies aren’t so stark, reporting 75% of MLM participants lose money.
Mid level people make money on bringing people in. They generally get a commission for every person they sign up or get to go to the learning events etc
The real money, like a traditional business, is in actually selling things. But you’re not selling to the company’s consumers. Rather, a lot of people in the middle of an MLM scheme make money by selling products and services to other members, like success seminars and company merchandise.
If you’re viewed as successful in an MLM, you’re in a very powerful position of being highly respected by lots of indoctrinated people, which basically means you can sell snake oil for hundreds of dollars and they’ll eat it up.
The real question is, if so many people join and still fall for their scams why aren’t there more people who are drowning? Why are there still so many who stay if they aren’t making money?
It’s a huge scam but there’s still so many people who partake… shouldn’t they be so broke that they leave?
>I understand that mostly they don’t
Correct.
>and its only the people ar the top of the pyramid that make good money
Correct.
You pretty much answered this one yourself right in your question.
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