Multi-Level Marketing, also known as MLM, is a scam. Yeah, I said it.
Before I get started, I know this post is likely to ruffle a few
feathers. Hopefully if you are involved in MLM though, you can please
let your guard down so I can give you some perspective outside of the
“bubble”. Often times when you are involved in a group and everyone
thinks the same and acts the same, you don’t get any unique perspective.
Also, when you PAY for something you are instantly going to defend
your purchase. It is a stupid feeling when you realize that you have
been ripped off and in no way would I call anyone stupid or look at
anyone that way if they were part of an MLM. It is all part of the
journey to success and sometimes we need to find out what doesn’t work
before we can find out what works.
In this post, I am going to make some valid points that I think you
are going be able to appreciate on both sides of the fence. Those that
love or think they love MLM… as well as those that are bitter towards
the idea of MLM because of past experiences. Either way, these are
undeniable points that I am about to make.
MLM Makes You a Hustler, Whether You Like it or Not.
You are that pimp standing on the corner of the street. You are that
energy juice salesperson that solicits your “scheme” to people. You
are selling insurance programs that nobody has ever heard of, yet you do
so because there is opportunity getting others to do as you are.
Every MLM is based on the hustle. You are told, “get out there and
make some cold calls”, “call your friends and family”, “talk about it
every day”, “use social media to mention something about it every day”,
“check up on your downline”, “boast about how great the product is”.
This is called hustling and unfortunately it puts your reputation on
the line. There is nothing more annoying than listening to someone
pitch their MLM to you, often times a product they don’t even really use
or they are forced to use it because of the continuity aspect of the
program.
To make it in MLM, you have to hustle. You have to hustle others.
Unfortunately there is a systemic problem with MLM and that derives
in the business model itself. It relies on you getting other people
into the program and almost always if your goal is getting actual
customers, it is convincing people to spend way too much on products.
That leads me to…
Without Overcharging, There Would be NO Compensation.
There would be no feasible way to earn within an MLM if they didn’t
overcharge for their products/services. Your best interest
automatically has to be you “selling” people on overpriced junk most of
the time, and sometimes unsafe, untested and unproven programs.
AND more often than not, it has nothing to do with the actual
product. You are selling people into a scheme so they can do the same
to others. Most MLM’s have a fee to join. Most MLM’s require you to
purchase the product. Most MLM’s have products that are vastly
overpriced to support the compensation structure of the very program.
Without overcharging for their products and without having fees or
relying on recurring product orders (by the people within the program),
an MLM would die out very quickly. Unlike legitimate sales models,
they rarely rely on selling quality products at a good price to
customers. They rely on selling people on the scheme fees so they can
do so to others….and the endless chain continues until people wake up to
what is really going on.
It’s a P_R_M_D scheme.
Paying for the Stevie Award, BBB or Other Credentials. They Buy Trust.
One of the most common tactics is for an MLM to work to gain
authority for their product by getting “credentials” to put beside their
name. There are many “awards” that you can pay money for out there.
Lots of the MLM companies get so many complaints within online
platforms that they have entire teams dedicated to clearing their name.
This includes paying money to the BBB to get accredited and move up
their ratings. Yes, you can pay for ratings within the BBB
(even if you are a totally illegitimate company). Same goes for the
Stevie awards which are a completely unethical system for “awarding
status” to many unethical companies.
There are many companies that have been taken out by the FTC for
scamming that have also received awards of this nature. There is no
due diligence taken.
Making Money Off Your Friends, That Ain’t Cool.
The most common and sometimes the only way people make money in MLM programs is from recruiting others into the scheme.
I personally know, I have been involved in MLM’s and this was
unfortunately the only way I could promote it. I sold my Aunts and
Uncles, my Cousins, tried to sell my friends, and of course my parents
bought into my products because I thought I was an entrepreneur. I
think that they committed to a program they didn’t necessarily believe
in just because they felt bad for me.
You get real tired real quick of shameless promoting
products/services and the scheme itself to others you know. You get
tired of getting “denied” by people. And the unfortunate but natural
consequence of promoting MLM and “amazing” opportunity after opportunity
is that it gives them a perception of you that you probably don’t like.
A schemer and a swindler.
Seriously though, thinking logically how could anyone ever bring
themselves to spend $30 on a bottle of Acai juice (Monavie). The same
Acai juice, if not better quality, could be bought at Costco for less
than $10. Sure, you are paying a Premium…but the only reason you are is
because you have to fund the scheme itself and this is done through
inflated prices. By the way, Monavie has since gone out of business and
was deemed a scam.
You Are NOT Building a REAL Business With MLM.
You don’t own the business. You don’t own the website. You don’t
own anything other than “product” that you usually are required to buy
from the company (for way more than it is actually worth).
One of the biggest fallacies with an MLM program is that you are
actually building a business. Unlike Affiliate Marketing, where you
are creating a website, a brand and a following (which is a business),
in MLM you are undergoing a constant “hustle” cycle that requires you to
always suck in that next person to your downline,
shamelessly promoting the products and services to your family and
friends, or even worse, have to buy the product yourself in order to
remain part of the MLM…which can get very expensive.
You are assigned names like “sponsor”, “distributor”, “presidential
level” (and many others) which serve as nothing more than a facade as to
what you actually are when you are involved in MLM. A block in the
pyramid.
Think about it. A pyramid will always stand high and the top block
will always be supported if there is always MORE blocks underneath
the upper level. That is why the CEO of the companies tend to make 10’s
of millions and the average person within the program will never be
able to support the actual fees of getting involved in it.
And if you are like most, when you end up hanging up your MLM boots,
you are left with drawers and boxes of “extra” product that you never
used. This more than validates that you were part of the program not
for the quality of the product, rather the potential opportunity if you
got other people involved in the product. A backwards way of trying to
do business and fundamentally, with MLM you are not creating a business.
MLM is NOT Affiliate Marketing, Period.
This is an apple vs. oranges comparison. MLM is nothing like
Affiliate Marketing. Affiliate Marketing gives you the freedom to
promote whatever products/services that you want, within any niche, in
fact, it can quite often be the segway for you creating and selling you
own products/services.
MLM locks you to ONE program. You by no means have the best interest
of your audience in mind because you are always required to sell the
same, overpriced, and often times unproven product to people.
Affiliate marketing is the act of promoting products to customers.
It it is not the act of promoting an opportunity to others with
“products” hidden inside of the scheme somewhere.
It is very easy to determine whether or not you are an affiliate or
an MLM’er. If you are promoting products to others, then you are an
affiliate. If you are recruiting people into your program in your
downline, you are involved in MLM.
Don’t confuse the two because at the core of it, one is an ethical
way to promote products in exchange for a commission (affiliate
marketing) whereas the other is an unethical way to promote a product
in exchange for “recruitment” fees for getting others involved in the
very same scheme (MLM).
Some of the Most Epic MLM’s Are Still Alive and Well…for NOW.
There are many MLM”s out there, in fact, 1,000’s of them. There is a
reason they will continue to be popular, because “some” people make
money with them (mostly the company and a very small handful of people).
Here are some of the most popular MLM programs:
- Herbalife (under huge pressure by authorities)
- NuSkin (under huge pressure by authorities)
- Pampered Chef
- Mary Kay
- Avon
- Young Living Essential Oils
- Beachbody
- Origami Owl
- Stella and Dot
- Isagenix
- Nerium International
- Rodan & Fields
- Karat Bars
- 7 Minute Workout
And then there are the many MLM’s that have succumb to the very fact
that they were unethical from the get go. Departures (because of legal
issues) are an all too common thing within the MLM world, which sucks as
the marketer because when a company goes, so does your entire business.
Recent Multi-level Marketing Schemes Shut Down By Law Enforcement
Recent Multi-level Marketing Schemes Shut Down By Law Enforcement
- Vemma (read post)
- Mona Vie
- Wake Up Now
- ZeekRewards (read post)
- BurnLounge
- Fortune High-Tech Marketing (FHTM)
- Global Information Alliance
- TrekAlliance
- TelexFree
My Conclusion, You Are Not a Bad Person if You Are Involved in MLM
One thing I have learned over the years is that people seeking any
form of opportunity have different reasons for doing so. Money is
obviously a major motivating factor and that is why it seems OK to
promote MLM’s a lot of the time. If your neighbours and friends are
doing it, then it must be OK. Unfortunately, there is nobody there to
tell you otherwise and it takes something like this post to give you
perspective.
If you are involved in an MLM, you are not a bad person. If you have
been involved in many, you are not a bad person. We are defined often
times in life by what we achieve and what “material” stuff we have, that
is why a lot of us have an internal motivation to make money, make it
fast, and make it just like the people at the top of these pyramids
(whos success stories they are alway sold on).
You are a good person, with motives I respect. I also know that there are opportunities out there
for you that can carry you far beyond any MLM program could ever,
affiliate marketing being one of them. I encourage you to think outside
of the box and think outside of the bubble if you have been wrapped up
in one or more MLM’s and are having a tough time getting it off the
ground.
There comes a time where the hustle is not worth it and the
realization that 95% of people fail with multi-level marketing schemes
simply because their motivation is based on recruitment of others (which
is a constant and tireless hustle) versus offering a quality product to
people that are already interested in that very product (like affiliate marketing).
I would be happy to entertain all comments, questions, and
experiences here within my comment thread. I know a lot of you will
have some awesome insights to share along with some opinions. I would
love to hear them and I promise to get back to you!
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