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I have some experience with MLM. My wife's side of the family (her brother and her mom) were heavily involved a number of years back with an MLM company called Excel/VarTec. It was a telecommunications company (telephone service, long distance, cell phone service, etc.).
My brother-in-law and his friend were in their early 20s at the time and made a killing. They did it full time and had a ton of monthly income coming in. They were driving Escalades and Lexuses, took trips to Cancun, owned nice condos, big screen TVs, etc. Then the company suddenly folded one day and that was that. Suddenly their monthly income went to zero and they were bankrupt.
Obviously, if they would have lived a little more frugally and invested some of the money they were making, things would have turned out a little better. However, they almost had to live a flashy lifestyle like they were to achieve the success they had. Part of their gig in recruiting others was showing off their success. They made a killing recruiting other young people like them.
That was probably 8-10 years ago. I got involved and pretty much broke even. It never worked for me. Today, my brother-in-law is fine. He finished college and has a good job and everything. I don't think he'll ever forget how he got burnt though.
As for my mother-in-law, she was involved with the same company as my brother-in-law (he got her in). She's bounced around from MLM to MLM since which is a major turnoff for me. I don't think she's ever been successful. I think (don't know for certain) she loses money each year as she waits for her "big break".
The thing that really turns me off about her involvement in MLMs is she always follows the lead of some of her higher ups (upline is the MLM term). They jump to a new one and they get their "downline" including my mother-in-law to follow along, resulting in profit for them. And all the while, my wife and I get to hear about how great THIS new company is every time it happens. Every new MLM company is always so much better than the previous ones. Meanwhile, she just keeps right on throwing away money year in and year out.
In summary, MLMs can work. I've seen it first hand. As others have said though, you have to be really good at it. You have to be a big shmoozer and can't be bothered hitting up family, friends, strangers, etc. But it can be gone in an instant too. And if you're not good at it, you can end up bouncing around, following your "mentors", and losing money while everyone else profits off of you.
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