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Never met a profitable MLM distributor? Me neither. [Q&A]

I calculate the average earnings from MLM at £400 a year per distributor in the UK, and $200 in the US. But that's not the worst part.

A lot of people do it, though, don’t they?

There's no doubting the popularity of multi-level marketing (MLM). The MLM industry bodies themselves say there are 400,000 distributors in the UK – that's 1.3% of UK workers – turning over £1.6 billion a year; and there are 18.2 million distributors in the US – that's 10% of US workers – turning over $34.5 billion.

How do you calculate average MLM earnings?

Assuming a typical 10% cost of sale (feel free to correct me), and assuming that's all paid in commissions, we get an average earnings per head (note: that's not profit per head – explanation below) of £400 per distributor in the UK and $200 per distributor in the US.

Why aren’t earnings the same as profit?

Think about what being a distributor actually means. Sure, it's often presented as owning your own business. But it's far more like a commission-only sales job because you don't get to decide on company policy, you just get paid a commission for sales or for signing up more distributors.

And, like any job, you'll need to expend effort in the form of time and persuasion.

What other ways are there to earn £400 a year?

The first part to this question is: How much effort do you need to expend in order to earn £400 a year?

The second part is: What could I earn from expending the same effort doing something else?

On an average £26,500 salary, £400 is 4 days' work.
On a minimum wage of £6.50/h, £400 is a week and a half's work.
Even jobseekers allowance gets you £400 in only 5 weeks.

It’s not just the money, though, is it?

OK, so MLM might not be financially profitable. But money isn't everything. Can it be worthwhile in other ways?

Sure. You'll enjoy the same benefits of using the beauty, wellness, nutrition, energy, telecom, broadband, or any other MLM products as anyone else who buys them. And you could enjoy some of the thrill experienced by employed sales people. And you might enjoy some of the social aspects too, like social media, networking meetings, and presentations.

I don't belittle these benefits. Although I do believe there are other ways to experience those benefits for less effort and less heartache.

Heartache?

I don't mince my words. Almost everyone I've ever met who's involved with MLM seems unhappy. It could be that I'm completely wrong, and that they're actually happy. But they don't seem happy to me. It could also be that they'd be unhappy anyway, without MLM. Or it could be that they'd be even unhappier without MLM.

I did say "almost everyone". It's not literally everyone. I can think of 1 person I know who's an MLM distributor who doesn't seem unhappy. And that's someone who's super-busy on lots of fulfilling other stuff including work, family, charity, and hobbies.

Haters gonna hate

If you're in any way disappointed or upset or in disagreement with my analysis, then you wouldn't be the first person to slam me for it. I can live with that. And I am going to carry on sharing this post until anyone can show me that I'm wrong.

Copy and paste this link to share this post next time you see someone offer anything that looks like MLM online: