While reading some of the buddy talk posts, I have seen the question of whether or not WA is a MLM program and then it often happens that the writer goes on to ask if it is a scam.

Having served on the admin team of a matrix and having joined more than one MLM “opportunity”, I want to share a few thoughts with you that will hopefully clear up what is really MLM or a matrix versus a true sales product such as the product offered by WAU for us to promote if we choose to do so.

There will never again come a day when I will participate in any MLM or matrix.  Yes, people have made money on some of them and may continue to do so.  But, let’s see what it really takes and how they both work.  You will see that WA is decidedly not a MLM program.

Let’s take on MLM first.  There are certain aspects of doing MLM that must be in place or you won’t really make anything at all with any MLM.  In fact, many are set up so you wind up spending money and most often that will be on a monthly basis.

As an example, I will use something my husband and I tried back when we still believed that a good product would “sell itself”.  To a point, that is true.  In our case, it was a nutritional supplement.  I won’t go into the company name here because they are essentially all the same in sales concepts.

We tried the nutritional supplement ourselves believing that we wanted to be able to truthfully say that it worked as promised.  After all, if we were asking people to buy it and put it in their bodies, we felt a strong responsibility to be able to say that it was exactly as it was presented.

It did work well for us.  As a diabetic, I had to be careful not to put anything in my body that would elevate my blood sugar level – in other words, no sugar highs.  But, I won’t go any further as far as our testing or why we decided to go ahead with it.  The real point of this is to tell you of our experience as it relates to MLM.

It always sounds easy.  After all, you have the best product on the market and here it is easy for anyone to order through your referral site every month.  Couldn’t be easier, right?  After all, it’s a great product.  As MLM works, all we had to do was have a teeny-tiny list of two customers to not only pay for our supplement every month, but make a buck or two in profit.  Easy.  What did it cost us every month to get our supplement to our door?  $39.95 + shipping. The total bill came to $49.95 every month.  With only two customers, which really are referrals (there’s a difference), we should have had $2.00 in profit.  Now, here’s where the real truth of MLM comes to light.

(Before I go on, there is always the push for you to order "company approved" business cards, magnets for your car(s), sales brochures, samples, etc.)

>>  You are required by most to be on auto-ship in order to receive your “commission” every month.  That means that as long as your referrals continue buying the product, you will continue to receive your commission.  Now, here comes the important part and please listen very closely because it points out the very wide gap between “customer” and “referral”.

>>  What you need to do to continue to make money is inspire your "customers" to also sell the product to others.  Why?  Because, with MLM, you will receive even more money if your referral also sells the product to others!

>>  So, in addition to getting your own customers, you will need to mentor and inspire them to sell it to others in order to really make any money at all.  In our case, in order to see that $2,000/month (and that’s just the start of what you can earn with this super-duper, can’t miss “opportunity”), we would have needed to have our “easy” two customers and then hope they could be inspired to start filling their downline and, by default, ours.  Then there are the “legs” you need to fill equally.

I’ve thrown in some terms that need to be clarified if you have never participated in any MLM. 

>>  MLM = Multi-level Marketing means what it says.  In order to see any money, you need to build multi-levels in order to keep your money growing.  Here’s a bit of a picture to help you see what that means.

Let’s just look at your left leg for our purposes.  Many MLM’s require that you fill your left "leg" first and, when that is filled, based on their requirements, then you can begin to build your right leg.  Not all MLM’s use the right and left leg before you actually see any money, but it is common.  Let's take a look at what your left leg looks like:

                                       Your Left Leg             

                                                You

                   Joe                                                  Susie

        Jerry     /           Judy                   Larry           /        Jan  

Quite frankly, I could have kept going to where I reached 100 people in your downline, but this represents 62.  All of those people need to be as excited as you are, as hungry for extra income as you are and know exactly how to promote the product to achieve success.  Do you really think all 62 of the people represented here will fulfill those requirements that allow you to earn off their efforts? 

Now, you know your product works and you really do feel better.  Joe and Susie are your best friends and they actually do see a difference in how you feel.  They agree to try it (after you’ve given them samples to at least test the flavor - which cost you money to buy).  They try it and, yes, they actually do like it.  They become your first two “customers”.  But, here’s the thing.  In order for them to keep getting the product without having to pay full price for it, they then need to get “customers” as well.  Everything is going great.  Now, you’re earning more money.  What could be easier and just wait until both legs are filled?  Here’s the catch:

>>  Your left leg requires a total downline of 100 (or often many more) people to be completed.  Your right leg won’t balance until such time as it also has 100 people in your downline.  But, hey, even if you fill your left leg and the right never happens, you are making money and it will probably even be some good money.  But, you probably won’t be going to Vegas for the conference, or you won’t be getting any awards on stage because you don’t have both legs filled.

Now it is critically important to understand one thing!  Here is where, in my humble opinion, you part ways when comparing your “customer” to your “referral”.  Customers are people who buy a product, they are not required to sell the same thing to anyone else – ever – unless they really want to.  As a customer, if they tell people about your product and those people then buy it from you, your original customer won’t receive any commission or products in return in order for you to earn unless you want to give them a gift for referring a new customer.

When they say they want to also sell the product, or they want to at least have their monthly cost covered, they become “referrals” and they also begin the trek to filling their downlines.  That means they need to start working to find "customers" which they never wanted to do in the first place.  So, what does this mean to you?

You need to become a mentor to your two “easy” referrals.  You have to be in contact with them, help them get referrals themselves for their downlines and, if you’re really a nice person, you will advertise to help them using their referral links.  Your job toward making money just became a bit more complicated.  Let’s see what happens if Jerry couldn’t sell anything to anybody if his life depended on it.  Further, he has absolutely no interest at all in selling anything.  All he wants is his supplement at a total of $49.95/month covered by, of course, the two people he did manage to get.  All is good for Jerry as far as he’s concerned.

Who does that leave not making more money?  You.  Jerry will take his supplement, feel great and maybe, just maybe through somebody seeing how much better he feels at work, he might get someone else to buy it.  But, Jerry has no interest at all in being an affiliate.  So, maybe he agrees to simply send the people to your website.  That’s great because it helps fill out your downline and that’s all that matters.  Right?

In short, your future success depends entirely on how many referrals you can get into your downlines in either one or both legs.  Life is pretty neat.  Eventually, you will need to also get people in the downlines of your referrals or nothing will go anywhere.

Remember - the keyword here to earn money is "required".  You are required to refer "x" number of people and depend on their actions to earn your income!  You are also, more often than not, required to sell "x" number of products and/or be on auto-ship just to qualify for your commission!

Then, Jerry loses his job.  The belt tightens and even though he feels so much better taking your product, the budget does not have $50.00 in it for nutritional supplements.  He agonizes because he will have to stop his auto-ship (which was required so he could get his products or income).  That means that if he’s not on auto-ship, he will no longer qualify for the benefits that brings – including any income, let alone the products that are covered by his referrals and on…and on…down the left leg. 

>>  Customers are people who return, often on a regular basis, to purchase a product(s) you have to sell.  They pay, you receive your commission (profit) and that is the end of it until they come back again.  Nothing more is expected of them or you.  Yes, you hope that your customer will share your products by word-of-mouth, but that may or may not happen.  In the meantime, your customer is not required to be inspired to go out and bring in any other people in order to receive their product(s) or for you (or them) to earn money.
 
>>  MLM "Referrals", on the other hand, must go beyond just purchasing the product either to be able to get theirs or make a little money on the side.  With MLM it is impossible to make any money and see any headway unless you continually get referrals.  That means that when you run out of friends and family who, by now, are barely talking to you because you’re tried to get them to buy things before, you have to go after the rest of the world. 

>>  So, you need referrals and too many people in your downline are doing nothing.  Nothing you say or do can inspire them to think otherwise.  Your downline slows down and you’re stuck.  That means going online, advertising everywhere you possibly can to get more referrals – many of whom won’t know a thing about internet marketing – they just want to make money.  That means you become the one to inspire, the mentor, the teacher and, if the truth be known, all you know about that is not much either.  After all, all you had to do was refer people who would then be inspired all on their own to help make you a fortune.

Okay, so here we are at Wealthy Affiliate University.  Maybe you’re just starting out, or maybe you’ve been through every hope the internet has to offer and finally got smart.  Either way, here we are at WAU.

So, can we make money here?  Yes.  If we choose to promote WAU as a product, we can.  Is it required to make money?  No.  You learn here to promote any product or program.  Do we have to depend on anyone “under” us to refer others in order for us to make money?  No.

If you refer someone, you get the commission for that sale until such time as that person drops out for some reason.  There is no dependence on what anyone else does.  Anyone you refer to WAU is truly a customer, not just a referral to fill any downlines, or balance any legs, or otherwise cause you to depend on their actions in the future for you to make money. WAU is emphatically not MLM.

Now...

Let’s go on to the ever-present matrix opportunities…