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No Pyramid SchemesSo what if I told you that you could get people below you to pay to join your network you just made. Then those people could get other people to join and they would pay them and you would get some of that too and eventually you have 1,000,000 underlings that are all paying from bottom to top and you are making millions.

Well — you can’t. That’s called an illegal pyramid scheme.

What you can do though is take that concept and remove the membership fee and add a little product and value… and voila! Network marketing.

Free sales training, network and relationship building, practice — and if you stick around — big bucks.


Second ChuteIn The Second Chute of The Loot Chutes here I generally include businesses and systems that you create yourself — but in this case, you won’t be creating the business — at least not from scratch. In this case, you start with most of the business infrastructure already taken care of and you are responsible only for recruiting and sales. It’s included in The Second Chute because it is scale-able and you can get residual and passive income. As with most of the options in The Second Chute, you start small — usually in need of alternative money-making options (a.k.a. The First Chute), and then grow it into system that creates value for your customers and wealth for yourself.

With this business it is the same, just on a different place on the spectrum. You will start small, but it requires far less risk and is much easier, initially, to grow — but at the same time your growth has less potential to explode up and translate to millions of dollars.

So how can I participate in a business model that is on the same spectrum as starting my own business, that already has an infrastructure in place, that comes with training, relationship building, and residual income?

Let’s take a bite and find out.


Hmmm...The Elements:


  • What is it?
  • How to be Successful
  • Taxes
  • Picking a company
  • Recap
  • Final Words


What is it?


Human Money LadderNetwork marketing, also called multilevel marketing or MLM, is very easy to understand.

I was first introduced to the concept in a book by Robert Kiyosaki, the author of Rich Dad, Poor Dad, who loves the concept and thinks it serves as good practice in some of the dimensions of running your own business.

There are two main components to network marketing, from your perspective — selling and recruiting.

The selling aspect is obvious, just like any other business, you will get the product or products that the company is trying to sell and you will market and sell these products, like a sales person.

But regarding recruiting, you can find and contract people under you and receive commissions from their sales. In other words, if you recruit someone and they make a sale, you get a percentage of their sale.

That’s the main reason why network marketing is so popular and potentially so lucrative — residual income and scale-ability.

Just imagining it as a 10% commission on your underling’s sales, if collectively, your underlings sell $1,000 worth of product, you make $100. So, if you have, overall, 100 recruits, some subordinates, some sub-subordinates, and so on, and they collectively sell $12,000 worth of product, you will get $1,200.

There’s usually an initial purchase to get the products you are selling, and then purchases thereafter to stay stocked up — but after the initial purchase, the other stock ups would obviously be funded by your direct and indirect sales and commissions, so no longer out of pocket.


How to be Successful


So say, just as a hypothetical here, that you want to work for four hours a day on your network marketing — now you just have to divide your time between selling and recruiting.

That’s depending on the company too, some have sales requirements that would limit your recruitment and vice-versa, but generally…

Selling would be more quick cash focused and recruiting would be more future cash focused. So divide the allocated time according to your goals. Personally, I would almost certainly spend three hours recruiting and one hour selling, because I value the long term much more.


The companies will tell you to try to sell and recruit amongst your family and neighbors. That’s fine to do at first, but it is so limited that you may not even want to invest in building your “brand” locally at all.

Wait what? What about building your brand? We were talking about selling and recruiting…right?

Yes. Anyone successful in network marketing has built a self-brand online through social media, a blog, a website, YouTube and such. That is how you reach people and that is how you make things happen.

So, get interesting, use the socials and the branding platforms, and recruit and sell accordingly.


So to get the point across a little better, let’s consider some metrics here:

  • Potential recruits and sellers
  • Value for time (scale-ability)
  • Investment and ROI

If you spend all of your time locally, trying to sell to and recruit people — you will be relatively wasting your time. I say relatively because, if you were otherwise sitting on your butt then yeah you would be spending your time better — but relative to building an online presence and brand that can reach, sell-to and recruit-from the vast catacombs of the entire internet — you are wasting your time.

Couch Potato

Having more people have access to what you are doing is almost a guarantee that you will do better. If you on average get a 2% recruitment rate out of all of the people you try to recruit, then if you try for 100 people, you will get 2 recruits. If you try for 1,000 people, you will get 20 recruits.

With the internet, and video and other content, once it’s out there, you are done with it. You can post your recruitment video everywhere. You don’t have to rerecord it each time you go to a different place to get attention — and that’s practically automation. Without the internet, you have to read your recruitment script continuously, in real life, to all of your potential recruits.

There are other factors to getting the most out of it, such as:

  • Branding tactics (Being like-able, genuine and knowing your products inside and out)
  • Time spending tactics (Getting the most out of your time)
  • Investing in recruits (Teaching your recruits your tactics and tricks to grow their followings too)

But the main thing is to get more eyeballs.Eye Balls

Create your internet presence, be interesting, provide value and collect recruits and buyers on a large scale.



Doug’s TakeDoug


I remember when I was a pup

Wealthy I wanted to be

From the bottom, I was looking up

to the leaves on the old apple tree


From one trunk — down to branches — I pondered

Then an apple fell and hit me, *pop* “flarketing!”

Not a ponzi scheme or money laundered…

Aha, that’s it! Network marketing.


Wealthy Branches Solution, a Poem by Doug

End of Intermission.




You file as a sole proprietor, as with most of these Second Chute businesses, and you can deduct anything that you buy that helps or assists your business:Supplies

  • Home office and expenses
  • Lunches and dinners with clients
  • Paying for legal advice
  • Supplies
  • Etc…


Picking a Company


Okay, sweet. You know everything that you need to know to get started and a few things that will put you ahead of the pack — now what MLM company do you want to join?

Well first, get your list of qualifiers out.

What list you say? This list:

The company should:

  • Be established and growing
  • Be in good standing in the public eye
  • Sell products that you would use or see someone you love using.
  • Have a product line that you believe in and can get behind.
  • Not be a pyramid scheme

DelveFind a few MLM companies that fit this profile, and aren’t excluded by your qualifiers list, and then delve into them further.

Talk to recruiters, see the products that you can most associate with and check out their compensation plans.

Be careful with recruiters  because they may pad the benefits of the job in an effort to get you started under them. Keep your head on straight.

As regarding compensation plans, these vary greatly. I’ve gotten a few compensation plans linked up below from some MLM companies that I found from searching online and one that my cousin works for. Check these out to get the sense of what compensation plans are usually about and how you would rank based on sales, recruits and your recruit’s recruits:

These vary in many different ways so make sure to make sure that the company that you pick has a compensation plan that fits your goals and strategy.

Once you’ve got all of that settled, you are off to the races!




So you started with a list of 20 potential MLM companies. You ran them through your requirements filter and you are down to five. Two of them don’t really fit your personality so those are gone. You check the compensation plans and one of them says that you get paid in frogs, so that one’s out. You don’t have anything against frogs but you know that they are a hard currency to exchange.

So you are down to two MLM companies. You go to a recruiter from each one and decide that you will be more successful being under one of them, as opposed to the other, so you pick their MLM and go in under them as a recruit. You go to some meetings and they give you some good advice. You buy a supply of the product and you study up on it until you know it like the back of your hand. You are ready.

You decide to spend an amount of time on selling and an amount of time on recruiting, and you do this daily. You start locally, but all the while are building your brand and your online presence. You continue, day after day, client after client, recruit after recruit, with the big picture in mind, building and growing…

Blam! One day you wake up and you have a ton of recruits, a ton of sales, an automated online presence and sales process, and a savings account large enough to be able to finally start that indoor skating rink business that you always wanted to.

Skate Shoe

Final Words


Network marketing, which I have also called multi-level marketing throughout this, can be very lucrative. Residual and passive income is practically the tip of the top in the money game — and that is the main selling point that anyone will mention regarding this business model.

This type of business isn’t as plausible to most people. Most people can’t manage and sustain and make less money initially. If you are able to, obviously with the intention to grow and develop into making much more later, then network marketing is one of the best things for you.

You can learn some elements of business building and branding, while making money and cultivating a following. This can even be your end game. Create your MLM empire and sit on it, automate your processes and enjoy the life you have created.


Further Resources:



Go Pro



MLM Nation





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