Service or Product Based MLM Companies: Pros and Cons

service mlm company

Maybe you are considering starting a home based business. You probably have heard about network marketing or multilevel marketing (MLM). Now you are wondering – service or product based MLM? Which would be the best choice for you?

There are pros and cons with both service or product based MLM companies. I believe the wisest move you can make when attempting to decide is to weigh the pros and cons. You should also research the particular company.

  • How long have they been operating?
  • What is their compensation plan like?
  • How many products or services do they offer?
  • How do online and offline reviews look? (Do keep in mind that every company will have negative reviews. You should just measure to positives against the negatives.)
  • Etc…

In today's post, I am going to provide the basic pros and cons of service or product MLM companies. I say basic because each company will also have its pros and cons too, and I am not delving into any singular MLM companies.

Service or Product Based MLM: The Pros and Cons of MLM

Before I go into the advantages and disadvantages of service or product based MLM companies, I believe we should take a look at the pros and cons of MLM in general. There are pros and cons of any business format, and I think it is important that you are completely aware of the pros and cons before you make a decision.

You should see these posts too:

  1. Why Tony Robbins Loves And Supports MLM
  2. 7 MLM Products Guaranteed To Make You Feel Like Tarzan
  3. 7 Warm Market Prospecting Tips to Grow Your Downline Fast
  4. A Detailed Advocare Review – The Pros and Cons

The pros of MLM

  1. It is an easy and cost efficient way for a person to start their own business.
  2. Being a home based business, it cuts out daycare and commuting.
  3. It can be managed full or part-time.
  4. An opportunity to gain leadership skills.
  5. A team experience.
  6. The MLM product or service is already established.
  7. Training is provided.

The cons of MLM

  1. There is a high turnover rate.
  2. A lot of MLM representatives do not make money.
  3. The high rejection.
  4. MLM con artists who give the industry a bad reputation.
  5. You may be competing against representatives from the same MLM company.

All in all, I find network marketing… MLM, is a great method to own a business and make great money. But you have to be willing to work and build a team.

It isn't easy just like any other business, but it can be profitable.

But the question still remains… Service or product based MLM?

Service Or Product Based MLM: Service Based MLM Companies

There are various service based MLM companies. With these companies, you are usually selling some type of service that often carries a monthly bill. I would never be able to name them all, but some examples of service based MLM

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Is a service based MLM your best choice?

companies are:

  • Primerica – This is an insurance and financial service MLM company
  • Ignite – Ignite is an energy supply MLM company
  • 5Linx – %Linx does offer some products but they are primarily service based in telecommunications
  • ACN – This MLM is primarily telecommunications

When you do your research, you will find that there are many more product based MLM companies compared to services based.

Serviced Based MLM Pros

Some of the advantages of having a home based service MLM business consist of:

  • The services are already a service people are paying for. Everyone needs electricity and insurance, and the majority of people are using cell phones.
  • You do not have to ask customers to spend money on something they do not normally spend money on.
  • Most independent representatives will keep purchasing the services even if they do not build a downline. This means you are still collecting commissions even if they are not actively pursuing building their business.
  • The start-up costs are minimal.
  • You earn a residual income.
  • You will have no product inventory.
  • And, you can work the business flexible hours.

Service Based MLM Cons

Some of the disadvantages of having a service based MLM business are:

  • Because of technology and changes in services, a whole MLM can disappear overnight. A good example of this was Excel Communications.
  • In comparison to many of the competitor companies who are not multilevel marketing, the services are usually higher priced for the same service.
  • In many cases, the commission percentages are lower with service based MLM companies in comparison to product based MLM companies.

Service Or Product Based MLM: Product Based MLM Companies

The list of product based MLM companies is immense. And, the varieties of products offered by these companies would call for an encyclopedia sized book to list them all. Some of the product based MLM companies that come to

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Is a product based MLM for you?

mind immediately are:

  • Amway
  • Ariix
  • Melaleuca
  • Regenalife
  • Herbalife
  • and many more…

It is important that you do ample research before joining any product based MLM company. You DO have a wide variety of choices.

Product Based MLM Pros

I have listed here some of the primary advantages in starting a product based MLM home business.

  • Most products sold are consumed and therefore need to be replaced on a consistent basis.
  • The company drop ships directly to the customer.
  • In most cases, products from MLM companies are of superior quality.
  • With a home based product MLM business, you can work flexible hours – part-time or full-time.
  • Not all but many MLM products are unique. You probably will not find comparable ones in retail stores.
  • A home based MLM product business has quite minimal start-up costs.
  • The mark ups are usually very generous which allows the independent representative the ability to earn nice commissions.
  • You can earn a residual income.
  • Most MLM products have a great money back guarantee.
  • Any MLM products have scientific and celebrity backing.

Product Based MLM Cons

While I do believe a MLM business is your best choice, I will also admit that there are cons too. Some of the disadvantages of a product based MLM business are:

  • Many MLM products do not have a long shelf life.
  • In comparison to similar products in retail outlets, MLM products are often quite overpriced.
  • In some cases, distributors or customers who bought an abundance of MLM products put them on eBay or Amazon for a fraction of the cost a person could buy them for from a distributor. Sometimes the products you see on eBay or Amazon are actually counterfeit. Either way, this makes it harder to sell the products at retail prices.
  • Many different MLM companies offer comparable products (Supplements, Weight Loss, Energy Drinks, Etc…). This makes competition ferocious.
  • Where distributors in service based MLM companies usually keep using the service even if they stop building the business, in product based MLM companies, when the distributor stops working the business, he/she usually quits ordering the products too.
  • With product based MLM companies, most of the products are considered luxury items. If the person's financial situation gets bad, they will normally stop buying the MLM products.

Service Or Product Based MLM: Pro and Con Summary

Whichever choice you make, service or product based MLM, as you can plainly see, the pros do outweigh the cons. But it really comes down to you choosing a company and product you will be proud of and you will feel passionate about.

I want to give you a few tips about finding the right MLM opportunity.

Before choosing a service or product based MLM follow these tips:

It is very important that you do not choose any company without following these tips:

  1. Make sure you are passionate about the product or service the MLM company offers
  2. Do ample research of the company – How long have they been in operation? Who are the leaders? And also search to make sure the company is not involved in any lawsuits or under investigation in any way.
  3. Study the compensation plan and if you have any questions about it, ask. Make sure you understand it completely.
  4. Make sure the company has plenty of 3rd party tools to help you market. Also make sure the company offers ample training.
  5. I also suggest you look for a company that has several products or services. The more to offer, the easier to sell.
  6. You want to determine if the MLM company will allow you to set up your own website to generate business. In most cases you can, but without using the name of the MLM.
  7. You need to really determine if you can handle working with the person sponsoring you. Do you truly believe they are committed to your success? Will they be there to answer your questions and help you?
  8. And last but not least, use your intuition. If it feels right, go for it. If it feels wrong, look for one that feels right.

So, if you follow those tips, odds are you will find the right MLM company for you.

Service Or Product Based MLM Companies: Service Based Possibilities

While there are a wide variety of MLM Service Based companies, I thought I would just give you some of the top ones that come to mind:

  • LegalShield – They offer legal services; generally keeping an attorney on retainer.
  • ACN – ACN is primarily a telecommunications MLM.
  • 5Linx – 5Linx started as a telecommunications MLM but has veered away from that into home security primarily.
  • Primerica -Primerica is an insurance and financial services MLM company.
  • World Ventures – This is a travel MLM company that has grown substantially.

Those are just 5. Don't use that as your one and only search list if you are adamant about a service based MLM company. But they are a good start when you are researching/

Service Or Product Based MLM Companies: Product Based Possibilities

The choices of product based MLM companies are huge. I know many people can get frustrated just trying to find a product based MLM company they would be passionate about.

Now, I am just listing a few. So keep in mind there are a plethora more choices out there.

  • Ariix – You may wonder why I put this weight loss MLM company first. It is because I am an independent Ariix distributor. I would love to have you on my team, so if you have a notion, just contact me and I will explain.
  • Forever Living – Forever Living is an essential oil MLM company that many people love.
  • Amway – Amway is one of the oldest MLM companies and is monstrous. Amway has a wide range of products and is a well established MLM company.
  • Melaleuca – Melaleuca is also a well established MLM company that primarily offers health and wellness products.
  • It Works! – Nutrition and skin care are the primary product base of It Works!. Started in 2001, this MLM company has become quite popular.

Service Or Product Based MLM Companies Conclusion

No matter what you choose, if you work hard, you can have great success at either a service or product based MLM. It comes down to your attitude and following a plan of action.

I know you will be successful as long as you follow the tips I provided.

And, I have one other great resource you can use once you choose a MLM company. It all comes down to recruiting and I have available scripts I used to recruit top earners into my company.

You can get those scripts by clicking here.

So let's hear your preference… Service or Product Based MLM Company?

Just leave your comments and/or questions below.

And, please help other people out who may be trying to choose. You can do so by sharing this post on your social media channels.

Thank you for visiting and have a great day!


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