$3,000/Month Passive Income with MLM [Beginner Guide]
MLM, or Multi-level marketing, is a well-known source of passive or residual income. By leveraging the power of networking, MLM offers you the opportunity to make money by enabling other people to sell more. The more money your peers make, the more you will make.
Is MLM illegal? MLM (Multi Level Marketing) is not illegal if it is not based on a pyramid scheme. A pyramid scheme is a business model that, instead of selling products or services, is based on recruiting other members with compensation based on the promise of payments or services. This business model is recognised as illegal in most countries. Whereas, MLM is a marketing strategy based on selling products or services.
1. Is MLM a Scam? Understanding How it Works
The first thing you need if you want to be successful with MLM is to grasp this concept. MLM is not a pyramid scheme, where people only get money by recruiting other people. While a pyramid scheme is a deceptive method of passive income. Conversely, a legal MLM company allows you to sell legitimate products or services to people who are genuinely interested in buying them.
Let’s take Herbalife for instance. All of their products are super high-quality and can successfully be used to shed off extra pounds and pack on muscle. With just shakes and pills, people can live a healthier lifestyle and get that dream body they’ve always wanted to have. Even if the products are slightly overpriced, Herbalife represents a legit MLM business opportunity that has existed since the 1980’s. This brings us to the importance of choosing the right company.
2. Choosing the Right MLM Company for You
This is probably the most important aspect about making passive income with MLM. The products or services you sell are the main criterion for determining if you’ll have success or not. Thus, you need to be 100% sure that you are choosing a reputable MLM company to work with, one that offers you all the support needed to succeed.
Do not get caught in the hype of so many companies, but sift through all the information you receive. Look for a stable company that has been in business for a long time and has a proven track record of success. Some of the top MLM companies include Amway, Avon, Herbalife, Mary Kay or Tupperware. Each company is unique and offers a certain revenue plan, so you need to choose one that meets your needs and interests.
3. Understanding The Passive Income Opportunity
You are here because you are interested in making passive income, so make sure that the MLM you are considering actually offers that opportunity. If you cannot eventually make passive income from the MLM, it may not be for you. Some MLMs offer the opportunity to make passive income with:
- Direct Sales / Retail
- Commissions from recruiting
- Commissions on team member sales
- Production Bonuses
- Special promotions
Here are some income values of people working for some of the most famous MLM companies in the world. According to Paysa, Avon Sales Representatives make an average of $3,900/month (source), Mary Kay Cosmetics Recruiters make an average of $6,000/month (source), and Herbalife Recruiters make an average of $8,500/month (source). However, this source does not state how long it took these people to achieve such numbers or how passive the income is. Take note that these numbers are subject to change over time so click on the links and check out more websites offering estimates in your area for more info.
Make your financial plan before you get started to evaluate if you can financially sustain yourself while you are starting up your MLM business. Should you keep your 9-5 job, or can you afford the risk of quitting? Do you have enough money saved to sustain yourself while possibly not making any income for six to eight months? How much money do you want to make from MLM? Are you willing to work for five to ten years to build this active income stream into a completely passive one? We will talk more about income and your personal business plan below. Learn more about how much passive income can make you rich in the article on our blog (opens in new window).
4. Becoming a Master Recruiter, Trainer & Sales Manager
Once you are part of the business, it is essential to learn as much as possible and get better at these key skills. You need to be ready to earn nothing for the first few months. You’ll probably make no sales and you’ll earn nothing. However, you’ll invest plenty of time in learning all the tricks of the MLM business you joined. You’ll test products and learn the best techniques for approaching prospects.
During this process, you need to start creating your personal and business strategy. Identify your target market and understand who the people more likely to buy from you are. How much do they earn a year? What are their hobbies and interests? What problems do they face? How can your products or services solve their problems and exceed their expectations? How will you reach these people? Also train yourself to become a better salesperson, trainer and coach. Learn about online marketing and hosting events. YouTube can be a great place to learn more about selling, marketing and training others.
5. Marketing Your Products
You can make passive income from MLM online and/or offline. If you are selling physical products, you probably want to meet with your prospects face to face and show them how the product looks and works in reality. However, if you sell a digital product, you can transform this source of income into an online method of passive income. You can basically stay in front of your laptop and convince people to join your business, and then sell your products online using social media and other digital channels.
Depending on the MLM you join, a variety of marketing techniques may be applicable. You can host home parties, host team events, attend trade shows, send envelopes with promotional material, send greeting cards, interview people on the street, speak at civic group events & business meetings, go strong on social media by creating a YouTube channel and Instagram account, create a blog and leverage the power of cold calling. If blogging interests you, we highly recommend this blogging course.
While you want to sell your products and get revenue, it’s also crucial to build a strong downline. This means you need to create a strong network of people eager to sell these products themselves. The bigger the network and the more successful it is, the more passive income you’ll make.
6. Standing Out on the Market
7. Supporting New Members
How Passive is MLM?
Return on Investment
Can I make passive income from MLM? You can make passive income from MLM, however it will take time to transform an active MLM business into a passive one. Some ways to do so include recruiting a larger sales team and focusing on more residual income such as commissions, royalties and bonuses.
How much can you make working for an MLM? According to Paysa, Avon Sales Representatives make an average of $3,900/month (source), Mary Kay Cosmetics Recruiters make an average of $6,000/month (source), and Herbalife Recruiters make an average of $8,500/month (source). However, these numbers are subject to change over time so click on the links and check out more websites offering estimates in your area for more info.