Have you ever thought about selling Amway, or MonaVie, or HerbaLife products? Have you ever wondered if it was even profitable? Then read this informative post and find out what many others have already discovered: Multi Level Marketing simply does not work.

Amway, MonaVie, HerbaLife, and so many other "legitimate" companies operate a little bit differently than such companies as, say, Dole, Nestle, or Sara Lee. How so? Instead of releasing their products into the traditional consumer-orientated economy where product and price fluctuate on a supply-and-demand structure, all these companies instead rely on private salespeople operating by word-of-mouth in order to sell the product (with usually a set price). The companies also rely on their salespeople recruiting salespeople under them, thus creating a matrix (God-forbid you should say pyramid!) of underlings who bring in residual income to those individuals at the top.

Most laypeople call this MLM, or multi-level-marketing. The idea is simple, at least in theory: you buy some of the company’s product and then sell it to others, pocketing a certain profit margin on every item sold. Along the way, you also recruit other people to become salespeople. These salespeople, now under your direction, will likewise sell product, net some of the profit margin, and pass on some of their profit to you. You get richer as you continually sell and recruit.

There are just several important flaws with MLM:

1. Market Oversaturation.

In the case of HerbaLife, for instance, why should anyone pay $39.99 for a bottle of that company’s vitamin pills when the local grocery store can offer vitamin pills at better than half price? And even if we argue that HerbaLife products are better, what are 3, 4, or more salespersons going to do once they’ve each recruited 3, 4, or more salespersons in turn, and all these salespersons are now scouring the same 10 block radius of the neighborhood? By recruiting, you divy up your own sales territory more and more, splitting the profit potential. Every time the pyramid heads down just one additional recruitment level, you chance of making a sale decreases by a power of 10 (assuming each person recruited manages to recruit 10 more individuals). Pretty soon, the demand that was out there for your product dries up, leaving you with inventory that you paid for and are now unable to unload.

2. Unethical Business Practices.

The U.S. government, as well as other world governments, do not approve nor do they tolerate MLM schemes for long. Eventually, a bust happens where companies are either shut down or their fearless CEOs exported. That doesn’t mean that MLMs go away overnight, just like gangs and mobs don’t go away overnight. Many MLMs even advertise themselves on Web sites and big billboards, but advertising does not make someone legitimate. In fact, the USPS has a Web site devoted to warning consumers about MLMs, at http://www.usps.com/websites/depart/inspect/pyramid.htm. There is also a warning about MLMs on the Federal Trade Commission Web site. Click here for more information.

3. Bad Business Model.

A large portion of MLMs rely upon the recruitment of additional distributors for their, and the individual distributor’s, income. When a company consists solely of distributors (salespeople), that is a sure sign of trouble on the horizon. If you have that many distributors, (by self-admission, HerbaLife claims it has over 1.8 million distributors), then who is left to actually buy the product? Or to manage the business? Or to monitor whether all those distributors are legitimately selling the products and not just recruiting more individuals to recoop their losses?

In summary, MLMs are hardly a legitimate, if even legal, business practice. Stories abound of hapless individuals who were taken by the "get rich quick" line of the major MLMs out there, losing hundreds if not thousands of dollars in the process. Don’t become one of them!