If you believe MLM is just a scam, we have your thoughts answered here!
It’s been a while since I’ve written something online related to the industry I work in. So, finally, when I realized it, I decided to look up the results for the keyword ‘MLM’. I was bewildered. 90 percent of the results were like…
‘How MLM could ruin your life…’
‘Why joining an MLM business is suicidal…’
‘How I lost a million dollars in a pyramid MLM business..’
The search results are never-ending. Interestingly, the other 10 percent included results of the kind:-
‘How MLM turned a jobless uneducated man into a billionaire in just 3 months…’
‘ Why you should do away with your 9–5 job for a lucrative MLM career…’
Although we have already elaborated on this topic in one of our blogs, where we pinpointed the difference between legitimate MLM and pyramid schemes, I think it’s more of a responsibility to talk interactively about this.
In spite of being a technically perfect and viable business model, why MLM is portrayed as a scam seems patently absurd to me. I did massive research then. In the end, I realized something very, very interesting.
The reason for the 90 percent posts that pour scorn on MLM is those 10 percent posts that glorify the MLM business with unrealistic offers.
People who fall prey to such illogical success stories end up joining the scam programs, put in all their hard-earned money, and keep dreaming about leading a luxurious life with the immense wealth that comes in from the so-called make-you-a-billionaire business.
What happens next? These pyramid schemes, where the majority of the bonus comes from mere recruiting of new members into the business, slowly start to show its true face. People reach their limits in recruiting. Their contact databases dry up. Eventually, they lose all the money they have poured in. Hopes fade. Emotions kick in.
Now what? The easiest way to react and have some sort of relief from the pain inflicted is to write about it online. With the intention that no other person should again be lured into these scams, they title the post with something similar to the ones I mentioned earlier with words like ‘ruin’, ‘destroy’, ‘destruct’ included to show their affliction.
This story repeats. Every single time.
I guess things make a bit more sense now.
It’s not the MLM scheme that snatches money from you. It’s that the fraudsters exploit this business model to fool people with fake success stories and trick them to invest in their business.
Having said that, I feel it’s a responsibility to guide you in understanding the real potential of this successful business model. I will try to explain the most common misconceptions that people have about this industry and will elucidate how to get things done legitimately to our advantage. I will answer the 90 percent first, followed by the remaining 10 percent. Here we go!
1. “Money is made merely by recruiting new members to the network and making them work for you.”
If it’s so, then it’s not MLM. It’s the pyramid swindle.
To understand this better, you have to know how the real MLM business works. For every business model, the product price is inclusive of the commissions that have to be paid to the distributors and the retailers, right? Similarly, every product in the MLM business model is priced inclusive of the commissions to the down line members according to the compensation plans.
Along with the earnings you make from the sales, a part of additional income comes from the sales (not recruiting) made by your down line members. This is very similar to the traditional business model, except for the advantage that MLM opens up a possibility for unlimited growth.
2. “The MLM schemes prey on low-income groups and take advantage of their lack of knowledge.”
Okay, think for a second. Is it the problem of the business model or the people exploiting it to take advantage of it? Isn’t it the same with every other business where scammers enter in?
It goes without saying that before you put your hard-earned money into any business; it is important to have a piece of thorough knowledge about its operations and profitability. It applies to MLM as well.
If you have good networking and communication skills and can sell products effectively, then education wouldn’t be a barrier to excel in the MLM industry. But that doesn’t mean you can be unaware of the business and the compensation plans. Be wise and earn in size.
3. “You have no control over the product you sell in MLM. You are forced to sell what they ask you to.”
This is another vague argument made by people who lost their money. When you are into an MLM business, you would be knowing beforehand what you are going to sell. And obviously, most of them are into it to make a good passive source of income. So, it’s already an established fact that you are in for the income, and you are well aware of the product you are selling.
If it’s like you wish to sell a product of your choice, you always have the freedom to initiate your own MLM business with the help of MLM software which can be set up within a few days. Things are as easy as that. So, this argument provides no validity to discard the business model.
4. “You are compelled to ignore criticisms.”
Again, this is one of the first signs that the particular MLM scheme is a scam. If you are asked to preach for them when somebody criticizes it, something is wrong with the company.
Not alone MLM, but any business that asks you to do so is a scam, and it won’t be so long before they have to shut down their operation. If you are into an MLM network, you should be doing exhaustive research on the company’s business and people’s opinions about it. And ask all those questions people have about the credibility of that company to your sponsor. See to it that each of your questions gets answered genuinely. In this way, you eliminate the possibility of having to ignore criticisms because you got all such queries cleared in the first place.
These were some of the most common statements made by people to criticize the MLM business. There are still a lot more such arguments (you know them better), which is practically impossible to answer in a single article.
Now comes the next category. The 10 percent. People who try to lure you into their pyramid scheme with flashy lifestyle stories and pictures. Let’s take a look into the claims they make:-
1. “MLM gives you overnight success and makes you a millionaire.”
When combined with a fake flashy life story, this claim can trick you easily. Most people fall prey to such marketing tactics by these fraudsters.
The basic theory of MLM business is that when you sell through a large network of distributors, it becomes easy to make sales and grow your business. Very simple. But that doesn’t by any way mean it brings in easy money. Not at all. Be realistic with your approach and for sure, MLM will have an edge over the conventional business models.
So next time when somebody comes to you with such claims, simply stay away from them. Those are the people who gave this industry the shady image and will try in every possible way to deceive you with pretense. Stay alert to such people.
2. “Attending paid training sessions is the only way by which you can earn plenty in MLM business.”
Another manipulated thought that pyramid scheme companies circulate. Paid training sessions are the ones in which they make most of their revenue. It's easy money for them. Once they inject such a belief into their distributor’s minds, they introduce over-priced training sessions for which people pay thousands of dollars.
Bear in mind that any business requires skill to excel and make a fortune from it. But if the company emphasizes more on signing up for a training program than guiding you to make better sales, you must be vigilant and keep track of the company’s activities.
3. “Fire your boss and earn double your salary right now.”
It’s the most empty-headed decision you could make to begin a career in the MLM industry. If you are jumping into the MLM business by doing away with your job right now, you have to be extremely skillful and experienced in that field. Else, you are just blindly buying yourself into a scam.
The ideal way to set about a career in MLM is to start it as a side hustle, slowly make progress and review your performance. If you are able to consistently make an income greater than what your job pays you for at least a year, then you are good to go. You can set out for a full-time career in MLM.
I guess I have answered almost all of the important concerns related to the MLM industry. After you finish reading this, you will obviously have a clearer idea about figuring out what is legit and what is not, when it comes to the MLM industry. That was the sole purpose of this article, after all.
It’s very hard to survive in this industry where, for every positive thing that happens, there will be at least two negative arguments. Being a company that provides software solutions to MLM business, we have tried to bring up a trustworthy community in the industry who does legitimate business. We have discarded every single project with an inherent shady scheme that comes to us. Our sustenance in the industry itself is solid proof of the possibility of building and maintaining a successful MLM network.
Take your time and think over these points before you sign up for an MLM plan next time. Your hard-earned money should find its value in the right business. Educate yourself, take the right decision, and be a part of transfiguring this omnipotent business model.