5 Alternative Business Ideas to MLMs

Multi-level marketing (MLM) companies often look appealing to those eager to take control of their income and start a business. They promise freedom, limitless growth potential, and the chance to help others achieve the same. However, the truth is that MLMs are rarely successful, and the statistics paint a rather bleak picture of the average MLM member’s chances of making a sustainable income. That’s not to say that hard work and determination can’t result in success, but it’s critical to understand that multi level marketing businesses are not the only option for entrepreneurship.

There are countless other business models that offer more control, scalability, and, often crucially, a higher likelihood of success. If you’re looking to start a business, the wisest move is to explore alternatives and focus your energy on a venture that will allow you to reap the rewards based on your effort and creativity, rather than the confines of a predetermined MLM structure.

But what else can people do instead of jumping aboard an MLM? We’re going to look at five compelling alternatives to MLMs, equipping you with the knowledge and insights you need to make the right decision for your future entrepreneurial endeavors.

What is an MLM?

Multi-level marketing, also known as network marketing or pyramid selling, is a marketing strategy where the sales force not only earns commissions on their sales but also receives a percentage of commissions earned by their recruits (referred to as their ‘downline’). This structure creates tiers of multiple levels of sellers, often resembling a pyramid shape — hence, the term pyramid selling.

The theory goes that with each level, you can earn more by hiring someone to do their sales, who then hires their own people, and so on…

MLMs typically rely on a fairly standard sales process which is usually taught by the company. The idea is that by studying this technique you can become an expert at sales, and live off the proceeds of your MLM business.

The MLM business model is usually aimed at people who want to ‘build their own business’ or to ‘be financially free’. However, the work required to get to this level of financial freedom is usually much more demanding than many expect, and the truth is that the skills learned and the products provided might not serve the franchisee as well as they might hope.

Are MLMs Worth Doing?

The concept of earning not only from your sales but also recruiting other sellers may seem enticing, but there are some significant drawbacks to MLMs. One major disadvantage is the saturation of the market, with numerous companies and individuals all fighting for the same customers. Moreover, income disclosure statements published by several MLM companies reveal that the majority of their members earn very little or even lose money.

It’s also worth noting that, as an MLM representative, you’re not running your own business in the traditional sense. While you may make sales and recruit new members, the control still lies with the MLM company – you are subject to their rules, pricing, and product offerings.

Many MLM products are also of a dubious nature, often low quality and designed to be marketed well, but often with little long term substance. Many of the health products are backed by pseudo science or very little in the way of evidence for their effectiveness.

Considering these factors, it’s easy to see why entrepreneurs are better off focusing their resources and efforts elsewhere.

What are the Alternative Business Ideas to MLMs?

There’s a wide-ranging world of possibilities out there for those looking for business alternatives to MLMs. Let’s explore five of them in detail:

1. Affiliate Marketing

Affiliate marketing is a type of performance-based marketing where you, the affiliate, earn a commission for promoting other people’s (or companies’) products. It involves a three-party relationship: the affiliate (you), the merchant who owns the product, and the consumer.

To get started in affiliate marketing, you’ll need to choose a niche, find products related to that niche, and promote them with your unique affiliate links. Every time somebody makes a purchase through your link, you’ll earn a commission. This business model can be a fulfilling and profitable alternative to MLMs that allows you to retain complete control over your promotions and work schedule.

2. Dropshipping

Dropshipping is another business idea that doesn’t require you to hold any inventory, much like MLMs. However, instead of recruiting sellers and relying on their sales, you manage your own e-commerce store and earn money by selling products directly to consumers.

In a dropshipping model, you don’t hold any inventory. Instead, when a customer places an order, the product is shipped directly from the supplier to the customer. Your responsibility lies in promoting your store, maintaining a seamless customer experience, and processing orders. This gives you the opportunity to curate your own store, decide on pricing, and control all aspects of your business.

3. White Label Business Services

White label business services involve providing a product or service under your own brand name while outsourcing the creation and fulfillment of that service to another company. This could include marketing services, software development, or even product manufacturing.

This business model allows you to decide how you want to rebrand those services, establish your own pricing structure, and tailor your product offerings to your target market. Essentially, you act as a reseller but have the advantage of full control over branding and pricing, offering a more profitable and scalable alternative to MLMs.

4. Sell on Gumroad

Gumroad is an online platform that enables creators to sell their digital and physical products directly to customers without setting up their own website. It’s perfect for those with digital skills, such as graphic designers, writers, or software developers, who want to monetize their work and expertise.

On Gumroad, you create and own your products, set your own prices, and manage your promotions and sales. Unlike MLMs, you aren’t bound by a pre-existing structure or tied to a company. Instead, you build something uniquely yours with the potential to grow as you gain exposure and credibility.

5. Go Freelance

Lastly, going freelance can be a fantastic alternative to MLMs, with countless opportunities for skilled individuals. If you have expertise in a particular field, like writing, graphic design, web development, or social media marketing, you can turn your skills into a thriving business by offering your services to clients.

A freelance business allows you complete control of your working hours, pricing, and clientele. You can choose the projects you want to work on and grow your business at your own pace. And crucially, freelancing means being your own boss — you steer your business, harnessing your skills and passions for your success.

Want more ideas? Check out our guide: Make your own job!

Conclusion

Instead of joining an MLM, consider these five alternatives that offer greater control, scalability, and earning potential. Each of these models empowers you to create your own success, free from the constraints of unsustainable structures and market saturation.

Explore these alternatives and pave your path to a fulfilling, lucrative, and self-determined entrepreneurial journey.