Before I answer, you should know a few things about me.
- I've paid to get into a couple of Network-Marketing/Multi-Level-Marketing (MLM) franchises, and I made a little money in it.
- I have worked in financial services sales.
- I later went on to get my Masters in Business Administration (MBA).
- I've been there, and I know MLMs and Business in theory and practice.
There's room for some nuance here, but for the most part:
TLDR: Don't do it
- You probably don't have the natural skill to sell products or franchises.
- The people selling you probably don't either, and even if you do manage to sell other people, it will be the blind leading the blind.
- The competitive market forces are very much against you.
- The only exception I allow for is Mary Kay or similar products, where people actually make money providing services, products are add-on, and franchises are infrequently sold (and not a major selling point).
- If you do have the skills to be successful, you'll be so much more successful in business to business sales.
Don't do it!
If you're good, you'll be better elsewhere
There's no snake oil out there that people can't get on their own. If you can sell it to them, then here's the simple case against it: if you're a good enough salesman to get other people to buy products or franchises from you (and really, you don't care about product sales, you care about franchise sales, because that's how they sold it to you, right?) you can make far more money selling business to business.
If you're a good enough sales manager that you can get good salespeople to buy franchises from you and sell more franchises, you'll make far more money managing salespeople selling business to business.
For the most part, people aren't good at sales, and that likely includes you. Most MLM's are sales groups with bad salespeople leading bad salespeople. It's the blind leading the blind. And as your friends get burned, and your family gets burned, and you start losing everyone who got burned, you'll start to wish you had never done this stuff in the first place.
The main reason the above holds true is that the people involved in MLM don't really create any value. They're looking to get a free ride on everyone else in the pyramid beneath them.
Exceptions to my warnings
There are exceptions, the main ones that come to mind are like Mary Kay, where budding makeup artists teach how to apply makeup without looking like a clown, and it's a skill, and it's part of how they create value. And it may well be the best option for someone whose chosen career is a makeup artist.
I'm not particularly an exception, but at the age of 17, I sold books door-to-door in Southern Mississippi, mostly to teach myself how to talk to people, since I had grown up with my nose in a book. It turned out that the business was structured like a MLM to encourage the salespeople to become managers, but I had no interest in that, I just wanted to learn people skills.
I also blew a couple hundred bucks on franchise fees on other MLMs, mostly because friends were in it - never did I see that money ever again.
Sales is hard
Sales is hard work. Teaching people how to sell is even harder, and impossible if you don't know how. If you're good at it, you'll do so much better in a business to business setting. Think about the economics of it. Salespeople get paid on volume of sales. Businesses have a lot more money than consumers. You have to sell to an awful lot more consumers than businesses to make the same amount of money.
Competition is impossibly hard
Think about competition, too. Considering Amway? You're competing with everyone from Walmart to the corner convenience store, and you will be asking everyone and their brother to join up. And many of them have already been pitched it, if they've been around long enough. The bargaining strength of your customers (they have lots of alternatives) and suppliers (their over-priced pricing structure is set in stone) is pretty strong. You have immense direct competition and product substitutes, and anyone else can go into the same business as you. Your competitive position is extremely weak. It's almost guaranteed to fail.
Special overpriced dietary supplement that only they have? Ridiculous. If it's that great, it will be available to consumers without going through a middleman than any Tom, Dick, Harry, and Sally (TDHS) can pay a small fee to be.
Things that don't actually create value? We call that a pyramid scheme. That's the semantics. Sure, they can probably successfully argue in a courtroom that a reasonable person could be persuaded that they are creating value, but the proof will be in the success or failure of the scheme. And things that don't actually create value eventually wither up and go away. If your gut is telling you this won't last - trust your gut here, and run away.
High quality makeup? Were you destined to be a makeup artist? Ok, but keep in mind that your local market can only support so many such artists, and you need to be really good to support yourself.
Get selling experience without the failure
Do you want experience selling? Need to learn whether or not you can sell to people the hard way? These schemes, for the most part, are not illegal, but are almost guaranteed to fail. Give yourself a better chance to succeed.
If you are ambitious, and you want to sell things to people, don't sell something that you're going to offer any TDHS to sell too. Figure out a special product or service that only you can provide. Figure out what's unique about it. Here's some ideas: Provide a food product, or something tangible like clothes, jewelry, wood, or leather work. Provide a service - office-cleaning, lawn-mowing, massage, piano lessons, sewing, etc. Look into services that require a license, then study for and get the license, and you'll have something that not everyone else can do.
Conclusion on MLM: Don't do it!
You probably don't have the skills, you'll burn your relationships, and you'll make more money doing almost anything else.