Online MLM's

I have no problems with companies that pay people with an MLM pay structure. It actually can be a great way to earn residual income without having to worry about a 10,000 customer data base.

The problem I have with online MLM is that many of the programs are not based on a real product or service (see our MLM section). That is not only the problem with online MLM's. E-mail MLM's and traditional MLM's often have the same problem. They don't offer a real product or service to allows folks to make money.

The idea of making money is not a product. You can't get your friend interested in your online MLM based on the fact that he or she is going to make a lot of money. It isn't legal or ethical. There has to be a real product or service involved.

Well, what if there is a real product or service? The litmus test for all MLM's is if people would honestly buy the product or service at the price you are selling it, if there was no MLM pay plan or compensation whatsoever. Most times the answer is no, even through most online MLM people will say yes.

Skybiz is a perfect example. They have a real product but the product is so bad that people wouldn't pay $110 for it. Many of the online malls are the same way. A company like V Store has a mall you can get for no charge.

Why would people pay $400 for something they can get for free? Because they are going to be able to make money selling it to friends. That is strictly recruiting and it's illegal.

Don't be fooled. Make sure that if you are going to get involved in some online MLM that you are going to be selling a real product or service. That is the true test if your online MLM is going to be around in two months or two years.

Matt Gagnon