Blogging for Money – Multi-Level Marketing 2.0

I found this story on digg yesterday. It’s titled Blogging for Money – A Passive Income, and it’s written by Darren Rowse, a somewhat well know professional blogger. In short, Darren claims that blogs are not a great source of passive income.

I’d like to approach the topic from another angle. While I might not agree with Darren’s point entirely, it does bring to mind one of my personal gripes with the blogging community: bloggers are starting to talk and act like multi-level marketers. The mere mention of the phrase “passive income” should make you think of MLM.  Personal blogs aside (which I liken more to journals and are not part of the problem), I will articulate the issue at hand.

What is Multi-Level Marketing?

What is multi-level marketing (MLM)? Think legal pyramid schemes. It’s the stuff you see advertised on late night infomercials as get rich quick schemes.

Essentially, a company that employs MLM is a company that sells products or services through multiple levels of intermediate marketers. A lot of effort is put into recruitment. You recruit Joe who recruits Sally, each of them signing up 10 or so customers. You get a percentage of every sale made under you in the tree.

Passive income is a popular selling point for MLM schemes. It’s also referred to as “residual income.” The thinking is that if I recruit just a few people, I’ll make a passive income off of all the future recruitment and sales that my recruits do.

What Harm Does MLM Do?

MLM recruitment in the US typically preys on innocent, gullible middle-Americans. They get lured in by grand stories of riches and the vast potential of such a business. They see potential for a passive stream of money flowing forever with just a little work today.

For a couple people in the scheme such visions may be true. However, the vast majority of these people end up trying to sell knock-off toothpaste to their grandmother, turning relationships with friends and family into business relationships.

Selling and recruiting friends and family is encouraged in MLM, and while it works and it certainly sells products, most people find it doesn’t make them nearly as much money as they thought it would. Usually they are just left with the dirty feeling that they just tried to hawk worthless vitamin pills to their elderly neighbor.

The debate for and against MLM and pyramid schemes has been going on as far as I can remember, and we could sit here all day arguing whether or not it is bad or good. Regardless, there is a lot of taboo surrounding MLM and that taboo is there for a reason. The bottom line is that many people have low or mixed opinions on MLM, and I don’t want to see bloggers slip into that world.

How are Bloggers Headed Down the MLM Path?

In MLM, there are the people who make the products, the middle-men who sell the products, and the customers who buy them. That’s all pretty normal, and that’s how economics works. The thing that makes MLM odd is that they encourage just about every customer to also become a middle-man. Imagine going to the grocery store and not only buying soap, but then going home and telling all of your friends to buy the same soap so you can reap a comission. It might not even be good soap, but you want that commission. That’s MLM, and that’s also the way bloggers are starting to act.

We’ve all noticed the symptoms. Suddenly every blog wants to sell you something. It seems that every blogger has dreams of passive income. What’s causing this?

Just like MLM, blogging has a low barrier to entry and a high availability of products and services for promotion, thanks to companies like Google and Amazon. It’s no surprise that bloggers are starting to think and promote like multi-level marketers.

Causes for Concern in the Immediate Future

Up until now, MLM has had a deep recruitment tree and blogging has been pretty flat. Bloggers go direct to the affiliate programs rather than being recruited by Joe who was recruited by Sally who was recruited by… you get the idea.

This is now changing, and that’s what scares me. Services are popping up that act as middle-men between the blogger and the affiliate program, effectively making for a deeper tree indicative of MLM. Take a service like Zoundry. They make it easier for you, the blogger, to tag your posts with product links. This is a great idea if you promote great products because you generally believe in them, but in the wrong hands it’s just more kludge on the Internet that I don’t want to click.

Pretty soon the MLMers are going to really catch on, and then blogging as we know it will turn into a cesspool we’ll call MLM 2.0. Selling knock-off toothpaste and worthless vitamin pills will become the norm. Innocent middle-Americans will get suckered into grand blogging schemes promising “passive income.” Such a thing isn’t all that hard to imagine. In the end, most people pulled into the scheme will be disappointed and blogging will be left culturally destitute. I’m sure there are already infomercials out there hawking this as a get-rich-quick scheme.

Call to Action

Blog because you have something original to say or offer. If you are going to sell a product, do it because you believe in the product, not because you want to make a quick buck selling diet pills. Don’t let the blogosphere turn into a massive pyramid scheme. Don’t fall prey to promises of riches. Trust me, if it’s money that you’re after, you’ll make a better living and gain more joy out of doing just about anything else.