Question
Is gross income the same as profit in an MLM?
What to do next:
- Ask whether each income figure is before or after expenses.
- Subtract a full year of likely costs from any income number you are shown.
- Put the comparison on paper with the worksheet, not just in your head.
Why this matters
An income disclosure may report compensation from the company without subtracting ordinary business costs.
Expenses can include fees, product, samples, websites, shipping, training, events, mileage, taxes, and unsold inventory.
Questions to ask before joining
- Does this income number subtract participant expenses?
- What expenses did typical new participants pay last year?
- How many participants earned less than their expenses?
Related recruiting phrases
Helpful next pages
- Someone pitched me an MLM. What should I do?
- Before You Join an MLM
- Before You Pay
- Documents to request before joining an MLM
- MLM expense worksheet
- Scripts you can use
Sources
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Regulator guidance
Multi-level Marketing Businesses and Pyramid Schemes
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Regulator guidance
Business Guidance Concerning Multi-Level Marketing