Working a job that pays a low salary for only half the year is difficult, so searching for supplemental income is always in the back of my mind. I have found writing online to be an excellent way to add something to my bank account each month, but my friend (also a minor league baseball player) recently approached me about a possible way to make some extra money. It is a multi-level marketing program that uses green energy as its driving force. This sounded intriguing enough to me, so I looked into it further.
What is it?
Multi-level marketing is a business system where salespeople sell products and get other recruits to sell products. You earn for each product you sell and for each product your recruits sell. It can be thought of as a networking matrix, where the more recruits you get on board, the more income you make.
Pros of the System
It is possible to make money in a MLM system. The key is to get in at the right time and do well selling the product. Studies show that the majority do not make enough money to live off in such an environment, but the average does make between $2,000 and $3,000 a year. Getting in at the right time is important. In the early stages, the system has more possible people to recruit, while in the later stages it can be difficult recruit and sell products.
Cons of the System
The system is widely criticized for a number of reasons. It widely resembles a pyramid scheme where the bottom pays the top. It is only different in that there is a product involved. Once the system reaches a certain level, there will be a shortage of recruits in the market, which may lead to it failing. A 5×5 matrix (each recruit getting 5 more recruits) will fail around level 10. At this point the recruits towards the bottom will begin dropping out because they are losing money, which leads to a domino effect all the way up to the top.
Is it Profitable?
This is only a profitable venture if it is entered at the correct time. If you get in on a product early, you may have a chance to make some extra income. But if you are late, you will most certainly be losing what you put in. In most MLM systems, a large majority lose money.
The product is important. In my case, is helping to grow the green energy business important? This is a question I will think about when considering if I should join or not.
Are there products you would consider joining a MLM system for? What is your experience with MLM? Have you or anyone you know ever joined a system like this? Was supplemental income earned from it?