MLM Broker: How to Buy or Sell a MLM Downline

In today’s post, I’d like to take a few minutes to teach you what a MLM Broker is and also share my thoughts on buying or selling a MLM Downline. Keep in mind, I am not a CPA or lawyer. This article is for educational purposes only and should not be construed as financial or business advice.

What is a Broker?

A broker is an individual or entity that acts as an intermediary between parties involved in a transaction. They facilitate the buying, selling, or negotiation of various assets, such as stocks, real estate, insurance, or other goods and services. Brokers typically have specialized knowledge or expertise in their respective fields and provide assistance by connecting buyers with sellers, executing transactions, and often offering guidance or advice throughout the process. They may earn a commission, fee, or other compensation for their services rendered in facilitating these transactions.

mlm broker

What is a MLM Broker?

A MLM Broker is someone who specializes in helping people buy or sell a MLM Downline. In many cases, they are an attorney, CPA, or coach. They usually have experience as a distributor in the industry, so they understand the intricacies of network marketing.

You can find a MLM Broker by doing a quick internet search. If you can’t find one online, you have three options. First, you could contact your network marketing company to see if they have someone who can help you. Your second option is to reach out to a business broker, and see if they can assist you. Your last option is to do it yourself, although I don’t recommend that option for most people.

Selling a MLM Downline

People buy and sell downlines more often than you think. It’s actually quite common in our industry, even if you don’t hear about it much publicly. People die. Divorce happens. People lose interest in their business. People move or change careers. Or hundreds of other factors.

Should you sell your MLM Downline?

Should you sell your MLM Downline? That is a personal decision; however, in most cases, it doesn’t make much sense to me. If your team is producing a consistent residual income, month after month, and it doesn’t require much of your effort, why sell it? If your business is generating $1,000 or more per month, why not just use that money to buy other investments, pay off debt, or start a different business?

If you’re going through a divorce, you might HAVE to sell it as part of your divorce terms. In most other cases, I personally don’t believe it makes sense to sell your network marketing business, especially if it is earning $1,000 per month or more.

How much is your downline worth?

Keep in mind I am not a CPA or lawyer. My answer to this question is simply my personal opinion. Most “downlines” are worth 12 to 24 times your monthly earnings, in my opinion. If your business is generating $5k per month, every month, you should expect to get $60k to $120k for it. However, you still must find a buyer who wants to buy it and has the resources to do so. That can be the challenge.

Other things that might affect the value of your business include the reputation of your company, the trend of your team (is it stagnant, growing, or declining) and how much time you must invest in your business each week.

There are a couple other things to consider. If your business is not making ANY money each month, don’t expect to find someone who would want to buy it. Also, if you are in a binary, and you have a power leg, but don’t have anyone in your “other leg” don’t think your business is worth anything. It’s not!

How to sell your MLM downline

You can sell your downline on your own. I’d start out by reading your company’s terms and conditions to see if it is allowed. If it is allowed, I’d start out by talking with several of the “leaders” in your team to see if they might be interested in buying your position. You could also ask your immediate “successful” upline. Another option is to talk with your corporate office and see if they might know someone who would be interested. Or, you could connect with a broker and let them do the majority of the work for you.

buy or sell a mlm business

Buying a MLM Downline

Here are my thoughts on buying a MLM Downline.

Should you buy a MLM Downline?

That depends. If you are a talented network marketer, you can probably “get a deal” with a company. They might put you in a good position if you ask. I’d ask first, before I forked over money to buy a team. Even if you can’t get a deal, you can get to work, put on your blinders, and build a large team in 12 to 24 months without spending a dime!

Next, if you are inexperienced or unsuccessful network marketer, I would not recommend buying a team. Why? You would probably mess it up and destroy it. If you don’t have the proper mindset and skills, it is highly unlikely you would buy a large team and maintain it.

The third consideration is this. Why not just use the money to buy a traditional business? That might be a better return on your investment.

How much should you pay for a downline?

A downline is worth what someone will pay for it. Just like a house can be appraised for X amount of money, it could sell for more or could sell for less.

From what I’ve seen, most downlines are sold for 12 to 24 times the monthly income. A team generating $3k per month, might sell for $36k to $72k, and possibly more.

What you want to look at are the current trends. Is the team growing or declining? Are new members joining every month? Is volume consistent? Is the company in good financial health?

The Process

If you are ready to BUY or SELL a MLM Downline, get everything in writing. As a buyer, you should evaluate their 1099s for the past three to five years. You should also look at their monthly statements for the past three to five years. You should research the company online. You should ask the seller why they are selling their business.

As a seller, you should escrow the money, and use a third party CPA or broker, to transact the deal. Get everything in writing. Do everything by the book. Both the buyer and seller should have their own attorney present to represent them.

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Final Thoughts

In conclusion, buying and selling MLM Downlines is “big” business. It’s quite common in our industry. Before you decide to buy or sell a downline, do your due diligence. Hire a professional. Get everything in writing. Trust your instincts. Evaluate your different options and do what is best for you and your family.

If you have experience as a MLM Broker, or with buying or selling a MLM Downline, I would love to hear from you. Please leave a comment below to share your story and advice. Thanks for stopping by. Have a fantastic day.

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Sincerely,

Chuck Holmes
Network Marketing Professional
mrchuckholmes@gmail.com

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