What's up with this MLM thing?

[Nick1]

Anybody has any experience with setting up an MLM (not joining an MLM... setting one up from scratch)?

It seems to me like a great way to get sales team going without much capital, but I worry somewhat about the legalities.

 

[The Volatile]

There are a lot of legalities (mainly establishing that your "agents" "affiliates" or "distributors" receive something of tangible value for their recurring payments). It's a fine line between a legitimate MLM business and a pyramid scheme. I have personally established and worked within both a binary and matrix mlm system and, though they can be quite lucrative, you DEFINITELY need a lawyer to cover your ass. My suggestion would be to join a MLM company and experience the other end before setting one up. The #1 reason why most "home-brew" mlm's fail is because CEO's get greedy and starve out the downlines. For a MLM to have longterm success, you need to setup a mutually beneficial system to give your downline a chance. Granted, A LOT of people that join MLM's are sold on the dream of making quick easy cash and end up quitting a few weeks later (usually after trying to recruit family members and being rejected) but these are not the people you want anyways. The people you want are people who are going to take ownership and treat their distributorship as their own business. If you are looking for a great system that has been around forever, a great one to take a look at is Mary Kay. Hope that helps.

 

[cyberjunkie]

Plus in order to set this on the right track, you will probably need at least 100K into it. MLM is not a cheap operation to start as an owner. You have to have an experienced staff in place etc. Lots of good things can happen if the right team meets the right product line.