In my last blog post, I listed the 5 ways to make money online, and I told you that I found the best way to make money online.
And I'll be honest, this is NOT what I expected it to be!
Based on my exhaustive research, as well as over 25 years working in digital marketing and over a decade of experience making money as blogger and online entrepreneur, I have found that there is one online business model that is truly the most scalable.
When I say “scalable,” what I mean is, the bigger it gets, the hassles and downsides don't outweigh the benefits….
Let's get into it…
(This is part 2 of a series. Read Part 1: How Losing a Million Dollar Business Was the Best Thing That Ever Happened to Me)
The # 1 Way to Make Money Online
After weighing the pros and cons of each online business model, I realized that beat all the others in every single category:
Network marketing (also known as multilevel marketing, MLM or direct sales).
I told you, this was NOT what I expected.
Before I Get Into Why Network Marketing Is the Best Model…
Now, before I get into this blog post… I need to say say something:
I've been seeing lot of people lately who are smack-talking MLM online. From what I can tell, none of these people talking sh*t have ever actually done network marketing.
Just like I wouldn't take weight loss advice from a morbidly obese person, I don't take business advice from people who don't have any experience in the field.
I have over 3 years of experience in network marketing (2 years recently, and I did 1.5 years in my 20s), and I have joined a total 12 MLM companies (mostly for research as you will see below).
I'll address people's ignorance (that is truly what it is) in a separate post, and I will be making a number of videos. I have so much to say on this topic!
How I Researched The Different Business Models
I looked at the 5 ways to make money online which are:
- Advertising (on a blog or YouTube channel)
- Selling digital content (ebooks, membership sites, online classes)
- Selling physical products (Amazon reselling, Etsy store, your own shopping cart)
- Affiliate marketing (selling products for commission)
- Direct sales (network marketing or MLM)
I was open to all of the above and researched them all thoroughly. And when I say thoroughly, I mean THOROUGHLY. Meaning I did and/or do them all. Here's a short summary of my experience with the different models:
- Advertising (on a blog or YouTube channel) – I am currently earning money from advertising on my Cheeseslave blog (although I lost 80% of my income last year from a Google algorithm change which hurt most alternative health bloggers… Ugggh! That's a whole ‘nother story.) I have been earning money from advertising on my blog since 2008. We also ran Google ads on hundreds of blogs as part of the blog network I founded.
- Selling digital content – I am currently selling a digital class which I am launching this week called Online Marketing Simplified. I also launched another online class/membership in 2017 which I decided to shutter. It was doing well and I had students… but it was about health and nutrition and I just wasn't passionate about that topic anymore. I also sold over $1.5 million in online classes, e-books, and seminars when I ran the blog network.
- Selling physical products – The only physical product I ever manufactured and sold myself was t-shirts and that was very short-lived. I found that I really do not like the whole process of inventory, shipping, etc. I did, however, sign up for and take the Amazing Selling Machine course and attended a few of the Captialism.com events over the past few years, and that is how I realized I really did not want to go down that road. I'm glad I followed my instincts… while that business can be successful for some people, it's gotten a lot more competitive and now with what's going on with China, I really don't recommend it for most people.
- Affiliate marketing – I am currently earning money from affiliate marketing on Cheeseslave as well (also lost 80% of that income in the Google slap). I have been earning money as an affiliate marketer since 2008. I also ran an affiliate network as part of the blog network.
- Network marketing – In my lifetime, I have joined 12 different network marketing companies. The first one I joined in my 20s when I was working a full-time corporate advertising job in Silicon Valley. I built that up to over $1,000 per month in passive income in less than 2 years of part-time effort. I joined the 11 other companies to learn more about the compensation plans, the product lines and the culture… and because I am very obsessive and thorough about researching stuff. Those of you who used to follow my nutrition and health information on Cheeseslave already know this.
Why Network Marketing Is the Best Way to Make Money Online
Here are just a few of the reasons network marketing is the best way to make money online:
1. Network marketing pays better than affiliate marketing or selling physical products — for less work.
Network marketing pays out anywhere from 30-50% vs. affiliate marketing (5-25% in most cases) or Amazon reselling (20-30%).
It's also a lot less work: you also don't have to do the manufacturing, inventory and shipping like you would have to do if you sell physical products.
2. Network marketing pays you passive, residual income.
With affiliate marketing, you don’t keep your customers — it's a one-time commission. So you have to constantly work to get an endless stream of new customers. With network marketing, you keep your customers for life, and you make money from their repeat purchases.
Also, when you sign up distributors on your team and they promote products, you get a commission from their sales, which generates passive income. (What's passive income? Making money while you sleep — like when you make money from ads running on blog posts you wrote 3 years ago.)
3. Network marketing is a team sport.
If you've ever done affiliate marketing, you know it can be very lonely. So is creating online classes, selling e-books, or running an online store.
In the network marketing business, we are constantly chatting with our co-workers online, doing Facetime lives and Zoom calls, meeting up at events, and even going on all-expenses-paid trips to places like Las Vegas and the Bahamas.
These are just a few of the reasons… I go into a lot more detail in my free webinar. Click to watch now.
So What Is Network Marketing Anyway?
So you may not even know what network marketing is…
Network marketing, also known as multilevel marketing or MLM, is a relatively new business model that emerged within the past century and it is growing rapidly.
The old school companies like Amway and Mary Kay started in the 1950s and 60s. Newer companies like Rodan + Fields and Beautycounter and my company, MONAT, are springing up every year, and they are showing hockeystick growth.
Network marketing is almost the same thing as affiliate marketing which is when you get paid a commission to promote a product. There are a few differences:
- With affiliate marketing, you get paid a commission on the sale, but you don't keep the customer. You only get paid the first time they order and you don't get paid for repeat orders.
- With affiliate marketing, the commissions are smaller (see # 1 in the list above) due to the structure of the business model and the margins.
- With affiliate marketing, you get paid only on your own sales (with the exception of multi-tier affiliate programs — yes, that is a thing — but it's not very common due to margins. It's more common with digital products.). With network marketing, you get paid on your own sales plus sales from people you recruited into your “downline”.
Why Network Marketing Works Better to Sell Products
I think the reason network marketing is becoming so popular is because it is extremely effective.
Why? Because it's based on the most powerful form of marketing: word of mouth.
Any business that manufactures and sells products has to market their products to customers. Most companies opt for the conventional (old school) route… spending lots of money on advertising campaigns: TV commercials, billboards, radio, print ads, and the like.
Network marketing companies don't spend money on advertising campaigns. Instead, they work with a team of “independent distributors” (meaning independent business people who are not employees, similar to affiliate marketers) who do the marketing for them via the most powerful form of marketing of all: word of mouth.
Think about it. When you watch a TV commercial you might think to yourself, “Well, that sounds good, but I’m not sure if it really works as well as they say it does.”
But if your best friend or your mom tells you a product is good, you are much more likely to go online and order it. We tend to trust the opinions of our friends and family over advertisements any day.
Why Network Marketing Is Better for the Consumer
Network marketing is also better for the consumer. It gives the average person a chance to make money by sharing the products they love with their friends and family.
Would you rather have 70% of the cost of a products you buy go to a corporate advertising firm producing TV commercials and banner ads? Or would you rather support a hard-working mother and help her stay home to raise her kids?
Network marketing is the most grass-roots, free-market, democratic way of doing business on the planet.
Other Benefits of the Network Marketing Model
Network Marketing is Low Risk
With network marketing, there is almost no risk to start your own business. The initial investment is typically just a few hundred dollars. Compare that to other small businesses…
To buy a McDonald’s franchise, the start up cost is around $1 million. Other franchises cost hundreds of thousands of dollars to start.
An Amazon reselling business will cost you anywhere from $5,000 to $20,000 to get trained, by inventory and for advertising costs.
Network Marketing Can Save You Money on Taxes
A side hustle doing network marketing can save a lot of money on your taxes. This is because most people don't have 1099 income. If your job pays you W-2 income, then you're missing out on a lot of tax deductions.
I write off a lot of things for my network marketing business:
- Cell phone
- Office equipment
- Home office
- Travel (business trips)
- Restaurants (business meals)
CPA Courtney Epps says she saves her clients on average $4,000 to $8,000 per year in taxes when they start a home-based business.
Do you know how much money that is, ya'll? That's over $300 a month — and could be as much as over $600 a month.
Just think about what you could you do with that money:
- Pay down credit cards or student loans
- Take a family vacation
- Save for a house
- Save to invest in real estate
- Buy gold or silver or cryptocurrency
- Hire a part-time housekeeper to free you up so you can work on growing your business
And that $4-8K in yearly savings is JUST from tax deductions. That's not even including the money you make from your network marketing income. This is just the money you save from having a side hustle in the first place.
To learn more about how the tax deductions work, watch my free webinar: How to Choose the Best Side Hustle.
In My Next Blog Post…
In my next blog post (part 3 of this series), I'll share with you how to choose the best network marketing company… haha I think you can guess it will be the one I chose.
Don't want to wait? You know what to do! Watch the webinar.
Disclaimers: Please keep in mind, I’m not an accountant. Please talk to your CPA or tax preparer when doing your taxes. If you don’t have one, ask in the comments and I’ll be happy to refer you to a good one. You can also reach out to CPA Courtney Epps — I have not worked with her but she actually seems great.
MONAT US Income Disclaimer: These figures are mathematical averages and should not be considered guarantees or projections of your actual earnings or profits. Any representation or guarantee of earnings, whether made by money, or an independent MONAT market partner, would be misleading. Success with MONAT results from successful sales efforts, which require hard work, diligence, and leadership. Your success depends on how effectively you exercise these qualities. These figures do not include the value of incentive trips, free products or special bonuses.