Why is MLM considered a monster?

It's the false promises and false pretenses that give a bad stigma to the industry.

It's NOT that their claims of "fortune" are lies... but rather the way some "unknowing" newbie in the industry presents it to others... claiming that it's like "push button easy".

It's not their fault because they don't know any better... and that's probably because it's how others "recruited" them in the first place.

And when they're "in", expecting money to just come flowing... the "majority" finds out that it's not that easy after all... and in a sense, they "rage quit"... and that's where the badmouthing begins.

There will always be a small percentage who will do the actual work, and be successful. I was a shy college boy when I joined my first MLM company. In the span of 6mos, I earned my first six figures (in our local currency)... just before the company decided to change compensation plan and do a major overhaul (they're still operating though... after 7yrs since I left).

I learned a lot from joining an MLM company. It taught me how to sell face-to-face, and speak to a large audience.

Just like other people who try MLM, I did get "rejections" and "sarcastic laughter" from my friends and family too... but that did not stop me from enjoying the ride (where otherwise those "badmouthers" would already quit).

MLM is actually a young industry (about 40-50yrs + -, if I'm not mistaken)... and the tools, methodologies, and industry culture is still evolving. And I think it's getting better.

So, what gives the bad impression in the industry again?

"A sour taste left in the mouth, from wrong expectations... after being involved in one of the hardest but at the same time one of the easiest way to make good income."

MLM gets a bad name because MLM is about selling the MLM itself. It's an endless loop. Someone sold you on joining the MLM and you will in turn sell someone else on joining the MLM.

Sure, they might pad it out with some training materials or hosting that you have to buy, but the average person is smart enough to see through it.

I never thought MLM was bad, but many of my colleagues think it's a joke.



The truth is that it is what it is; I look at it as a "sales funnel", it's a biz op opportunity to promote, no different than any Internet marketing, biz op, or a CPA offer.

Plus there's recurring commissions.

(I just know I'll get hatemail for saying this since there is indeed a quantity of MLM haters around here, so I'll end this notation specifying that at I'm not promoting any MLM nor do I partake).



With regards to *why* many end users think it's a scam - because many promote it under the false pretense that no work (or budget) is required in order to become successful.

There's no problem with a properly used MLM, in fact it is a smart way of getting commissions from selling a product. However, it can also be easily turned into SCAM (e.g. pyramid scam) and people have been abusing MLM as it provides an easy money but 'false hope/promise' to the unknowing latter recruits. Consequently, MLM has now a bad name due to these abusers/scammers.

My first MLM was in the early 1980's. The company was not even formed yet. Built an organization of 500 people within a month. They had to get approval from USPS. Could not get the approval and lost entire organization.
Worked about 8 more MLM companies. Insurance, securities, household goods, energy products, etc.

Some companies we left because it was hard to make money and recruit people. There was no help from our sponsor in the business. You purchased a business with inventory before you even sold a thing. I still have a closet full of products from MLM.

A couple of times we were forced to abandon our businesses because the higher up organization mismanaged their business and either shut down or was taken over by another company. In one case, we were owed back commissions in the thousands of dollars.

I also agree with others who have mentioned that it was hard to sell. Even recruiting people if you did not know how to do that. Yeah, trying to run a business and we have no expertise to run one nor did our sponsors. Seems funny now.

So, for me and my family? We do not have a good opinion or recommendation on MLM. Great concept for making money but in my experience not practical.

However, I would not trade the experience I gained from doing MLM. It helped me to be successful with my existing 6-figure hula dance business. The only drawback is that it is a glorified job. If I don't show up, I make no money. Therefore, working on mastering IM.

Thanks for letting me share.

Leilani

I think a lot of people talk bad about it because they failed at it or it was one of the bad companies inside MLM. There are a lot of MLM companies out there selling overpriced bad products. I have worked at 3 different ones now and 2 of them were the average MLM with high priced products that the person buys themselves. They start off in the hole and never even get their money back so they quit and bad mouth the company. Some of them are justified in their complaints some aren't. It takes a while to find a good company when it comes to MLM I believe. Took me a few years and now I am working at one where I am not trying to take money out of customers pockets, I am trying to put more money into them by lowering their utility bill.

So I think the general public is generally negative towards MLM as a whole because of two reasons. 1) They lost money and never even saw it back. 2) They actually worked at one of the bad MLM companies that are out there.

It seems that most MLM companies focus their compensation plan on the "recruiting" of others as opposed to the sales of the product.

I've seen the best people try to do this type of business and (like IMers) don't get it - you need targeted traffic! If you do not know how to find people and influence them, they you're not going to succeed (not at MLM nor IM).

The wise thing to do before any of this, is to learn how to find and influence people to your offer #1. This is to be a leader. If you do not have a way to do this you shouldn't be in MLM or IM for that matter.

Where you see that your main source of income is derived from recruiting and not product sales - that's what is no good with MLM (also the problem with Bloggers they want to get traffic but they don't make sales). In that case, it doesn't matter what the product is, it's only the recruiting plan that is paramount (they can be selling their own hot air for that matter).

The recruiting is where most people fail - it has to fail because most people are followers and not leaders (yet you want to recruit leaders - but you're not one). Well, here's the news: leaders are already doing their own thing!

What leaders you do get, realize (as any sales manager knows) that most of the sales (recruiting) come from a few recruits and all the rest cycle in and out. That's part of any people based business.

You really think that these companies want to help you make money - really? They're looking for your group of friends and family to sell product to and recruitment kits. They could care less if you stay or go.

Bottom line is that if you do not have a large circle of people you influence, then MLM is probably not for you until they discover a product that sells itself and people latch on to he program naturally (where you sell the product and don't worry about recruiting at all).

The present state of MLM requires the following realization:
The best MLMer is one that realizes he/she is running a washing machine and during the wash they identify leaders who can run their own washing machines and help them do that, the others go out in the rinse cycle. Hence, "Rinse & Repeat".

If you're not up to what I just said - regular MLM is not for you - plain and simple.

Literally the only legit MLM is one in which you pay nothing to join and get paid after your referrals sell actual product. But that kind of MLM is rarely even called MLM. The people usually involved in "MLM" as it is widely defined are not capable of recruiting actual sellers, so they lean towards the illegitimate MLM world and sell air instead.

If everyone involved in stereotypical MLM understands that (and I think most of them do), then there really is no victim. Just a bunch of idiots pretending among one another to have a real business.

Because anyone that *truly* understands MLM/network marketing has nothing but contempt for such a repugnant business model. This isn't opinion. It's fact. Do your own *objective* research into it and you'll see for yourself.

The only people that believe MLM is a sustainable business model, and ground-floor opportunity for anyone "strong" enough to take advantage of it - are silly - who either don't understand it, or are just zealots eager to make the system "work for them". Once you "get it", you'll laugh at anyone that praises MLM.

This forum isn't a good place to talk about MLM. There are a few zealots here that will cry and complain. But if you are looking for excuses as to why you *should* do MLM, look for it in an MLM forum.

Here are some resources for you if you are curious about *actually* learning about MLM objectively. Without the woo woo and the glitter...

About BehindMLM (non-affiliated)

The 10 Big Lies of Multi-Level Marketing (non-affiliated)

In my experience, and that of friends and family, the illusion of success faded when we realized that once we sold to and recruited a few family members, there wasn't much opportunity remaining. The only people who made money were the founders and a handful of early members, which only lasted for a short time until the organization fell apart. Those people would then jump into another MLM, then another.

Everybody else has already summed up the lameness of MLM quite well. I'm a veteran of several MLM companies, including being on the ground floor (and subsequent crash and burn) of two (a health juice company and an early NetFlix competitor).

Here's what I'll tell you that's different: Take the exact same marketing strategies that an MLM will teach you, and apply it to YOUR own business. MLM companies often have some of the best sales training programs that exist, and that training comes dirt cheap, often just for the price of the intro/signup kit.

Take that training and apply it to your own business. Don't recruit for the MLM or sell whatever overpriced crap they're peddling. Rather, use that exact same skill set to grow YOUR business. Whether you're dog walking, cleaning carpets, or have an information marketing biz, the exact same sales strategies apply.

The reason why MLM sucks is because you're building a business that you do not own. It's just like a job, but at least a job gives you a 401K and benefits. (Hopefully.)

...people bad mouth MLM, largely, because of their
personal failures.

It's difficult for any human being to suck in his pride
and *admit* HE or (she) is at fault for lack of success.

Someone has to take the blame, may as well be the
"big, bad evil MLM marketing company that provides
a viable, useful service or product to the public"

Are companies perfect?

No.

Any entity ran by humans is less than perfection,
but people within the entity don't want to admit
THEY are part of the problem.

Everyone should join one mlm program and work it for 6 months. Their motivation should NOT be to make money from it, but rather to acquire communication, presentation and leadership skills.

Although I was an abject failure at mlm in terms of making a lot of money, the lessons I learnt were absolutely priceless because I subsequently leveraged these newly acquired skills into more traditional ways of making money, quite successfully.

Why is mlm unpopular? Well I guess it's to do with the nature of the work. Approaching friends, family and strangers about a money making scheme (or even pitching the products) is distasteful to most people. Most people are not so called 'sales types' and will run a mile when faced with the prospect of doing that type of work. That said the mlm industry in terms of sales volume is vastly more successful than the IM industry - there is no contest.

The marketing strategy required with most MLM companies are awful.

You will more than likely have to go to a mall/flea market/face-to-face/etc and try to pitch someone on your MLM opportunity. Then after 1 hour of wasting your life pitching the offer to someone, they will more than likely say, "no thanks".

How many times would you do this until you realized that this way to get sales SUCK?

The smart people who understand business and the power of leverage,
and take the time to investigate and learn before jumping into any business
venture don't think it's bad, at all.

They understand that it is, in fact, the most powerful business model
on the planet... bar none.

It's funny people fear things they don't know much about.

Most people who think about MLM or network marketing, the first thing that comes in their mind is Amway. Wouldn't you agree?

It's just a different model... at school we are not trained or taught to be entrepreneurs... we are taught to get a good education and a good job. You know work for someone.

When a different method of how you can make money like MLM comes along it freaks people out.

There are a few reason why as well.

Most are done with the house party thing... people don't like to be sold to. People like to make up their own mind about what they want and if they feel the business model and the products will work for them.

I have always been entrepreneurial have had my own businesses... but MLM I struggled with.

It is really the form of training I believe that they teach you. You are taught to speak to friends and family who are not really your target market... and you feel that you have to convince people to take up your offer.

There will be many different opinions about MLM I am sure...

But what MLM doesn't teach you is how to build your business, how to find your target market and what you then do with your target market once you have established who they are.. and then what you do next. There are a few grey areas there.

If you can work it that you are educating people and not selling to them... you can have more success. But you can do it all both online and offline.

Cheers

Tiff

I'm not a hater but I've never been a big fan of MLM. With the right guidance and training you can make a lot of money with MLM, but if I'm going to start a business (and truly commit to the amount of effort required to make it successful) I want it to be my own business where I'm in control of everything.

A critical key to any network marketing company’s survival is that their business must be product driven. If a company spends 99% of its recruiting time flashing the impressive compensation plan and the income potential, then you know right away that you are in a danger zone.

A product-driven company simply means that the money that pays the distributors comes from the sale of the product. If this money comes from some fee that the new recruits pay to join the company then this borders on the illegal.

The FTC is more that happy to investigate such companies and shut them down as ‘pyramid schemes’. This is the problem faced by the so-called ‘gifting programs’. Money is only passed from one person to the next and some people will eventually lose their shirt—those who were last to join.

If you take a brief look at all the MLM companies that have survived over 5 years you can clearly see that they sell high quality products. It’s not sufficient for the products to be unique but they should also work. If these products cannot live up to their claims then neither will the company.

That is why whenever I’m investigating a new network marketing opportunity I always try the products or at least verify that these claims made by the company can stand scrutiny.

If this product didn’t hold up to its claims, then the new excitement created by the thousands of new distributors that signed up just in the first month of launch will soon dissipate. Excitement alone cannot keep a company afloat unless it’s the entertainment industry.

Now I think that the most unverifiable claims come from the health industry. Often a new health product will hit the marketing making claims that it can cure every disease from cancer to the common cold. Because these companies cannot make claims about curing diseases for these ‘natural’ products, these claims are only implied.

Now I’m not hitting this sector of the MLM industry, but just reporting that this is the area that hyped claims usually come from.

But these claims are not exclusive to that market segment. Just a few years ago, for example, a company promoted a special ‘laundry disc’. These plastics disc were supposed to change the molecular structure of the water, which made the waster ‘soapy’ so that you can wash without needing detergent. A few people made a windfall of cash but the company soon went under because the product didn’t work as advertised.

A simple test you may want to apply to any product is to ask yourself the question, “Would I buy this product at this price if there wasn’t a compensation plan attached to it?” If you can answer ‘yes’ to that questions then you know that you have a great product.

Network marketing companies should be able to produce superior products because they are not subjected to the high advertising cost of the traditional business model. Using word-of-mouth advertising means that the millions that would have been spent on a TV ad, can now be fed into producing a quality product. Less wasted on advertising means more available for product research and development.

In choosing a MLM company to work with, ensure that the company follows a product driven model. In selling your opportunity, you will have to show the compensation plan at some stage since people go into business to make money. But the money only keeps flowing if the products are of a high quality.

Outside of this your success will be short lived.

-Ray Edwards

From what I've learned, people hate on MLM not because of the company or the structure. It's either they were harassed by MLM'ers before who had no idea how to market a product or company or they themselves joined an MLM, failed and instantly came to the conclusion that it's an industry full of scammers. Most of the time, the people hating on the industry are people who don't even understand or take time to understand what it's all about.

My advice, just let those haters keep ranting. Choose who you associate with wisely, keep working and let your results and success shut those people up. You'll be surprised as to how haters and whiners can take a full 180 degree turn and all of a sudden act like they're on your side. lol

MLM is all about having the right mentorship, proper training and most importantly, the drive and passion to make it work. It's not an success story, it's hard work but once it works, it's totally worth it.

In most countries, or at least in my countries, pyramid scheme selling or MLMs is generally illegal. It is bad because the person at the top collapses for whatever reason, there goes your entire earnings. The pyramid of people under the main person upsell can only grow so far before it falls down. Bit like a real pyramid, you can only build it high so much before it topples over. MLM is bad because it is bad business practice because basically it is not a sustainable way of earning income for years to come. It is good in principle but in practice it normally does not work. If you think you are going to make millions from MLM - be mistaken, because it is often the owners who do or if something goes wrong, the owners run away.

Because there have been and still are some mlm companies out that do not provide an actual product... all they are selling is a dream.
Basically give me money and ill teach you how to get other people to give you money.
Also a lot of hype and false promises that completely turn off, and some companies even recommend traditional marketing techniques(not that effective depending on actual method), which personal I don't agree with considering the internet will allow you to tap large groups of people who are actually interested...
And when you are making money friends and family will be curious and they can decide to join you or not

These type of schemes are a hard sell.
The people who make the money are generally the ones at the top.
In order to make money you are totally dependent on the people you recruit actually recruiting themselves.

I think I have a good perspective to answer this question from. I have been in several MLM opportunities and was only mildly successful in one of them.

My parents were full time profit sharing direct distributors in Amway in a small town in Nebraska for several years. My Aunt and uncle were Emerald directs in Amway in Denver for almost 20 years. They were successful because they ran their MLM business as a business with real customers, both retail and wholesale.

Today I see many successful MLM distributors who know how to set up a sales funnel for prospecting, follow-up, sales, and training. The average person never gets to this point and they never will because it is way to much work. So you end up with another failed MLM business and people who blame that on the opportunity or MLM business model in general/

MLM, The most Simple Reality of why MLM has a bad reputation is that it is a bad business model.

Simple as that... I know some will disagree...

but most of the time they drank the cooled and its too late for them to see the flowers or smell the coffee.

The only evidence that matter with regard to MLM is the fact that a huge number of these businesses have failed.

Left the country with boat loads of cash that never got to the Members.

What percentage of MLM companies fail?

No one can be sure, but its likely around 78 percent or higher.

With that kind of a record it is just a fact that this business model is not a good one to rely on for any kind of long term success.

Like most people here, I have tried the MLM thing, (back in the day, around 1997 and found that these businesses just are not able to perform because of the debt load.

What is really interesting here is that if they told the truth, most people would not bother with trying MLM, they end up promising riches and wealth but the fact is almost no one actually succeeds in these programs and for every one that does, it requires the funds from hundreds of participating members that loose money in order to pay one successful salesman.

That is the rub, that is why the business model is a failure.

The short answer is that the MLM model ends up hurting about 95% of the people who join into it. Usually, not always, but most of the time... The only people who make any money with MLM are the 1 or 2 folks sitting at the top of the pyramid. Yes pyramid (like scheme). People can disagree with me all they like, but it is what it is.

@Myob, I think your splitting hairs and also just a little bit hypocritical, obviously you have a dog in the hunt as most rednecks will understand easily, ))) I think that it is easily proven and I also believe that you are completely wrong on the idea that its not a failure of a business model.

Name one MLM company that has continually done business, without filing for bankruptcy, without being charged with a felony, without being investigated by the FTC, all the while paying out what it promises to those that participated.

Conversely, compared to blue chip ordinary corporations out there that do not practice Pyramid type marketing and you will see why its a failed business model.

Pure and simple, it is what it is, you might want to defend MLM, but the fact is MLM does not work for everyone or even 12 percent of those that participate. Its just the truth, most people that are here on this forum now are people that have seen this and understand it, that is why they are here and not on an MLM site trying to make a buck from the misery of people who have hope to make that money.

I think succeeding in MLM is harder than is advertised by the companies that is why once you join and you find out the truth you feel cheated especially when you have spent a substantial amount of money to join. To succeed you have to eat sleep drink mlm from my own personal experience. I joined one that seemed very easy and i stuck it out for 2 years paying their monthly subscriptions without any success. I realized that there are a lot of things that one needs in order to succeed in mlm and personal development is the largest. You need to a huge change in your mind set in order to persist long enough to see any substantial results.

It is because the world is conditioned to think like employees, however I really think this is changing a lot as people are tired of not being in control of their lives so they are looking for freedom.

In our society business offers this at the highest level possible. However, people first must change their inner dialogue so it matches their desired state. You post, and most of the people on this forum, have mastered their thoughts mainly because we´re so feed up with what our senses and the world was telling you is possible.

Now we have real examples of people succeeding so I think more and more people will "see the light" and focus on developing their skills to best serve the world.

Back in the late 90's early 2000s, I spent much of my time focusing on MLM. At least for me, I had very low self-esteem at the time, I didn't have many contacts, and indeed wasn't even that sociable. I never had success with MLM, but that doesn't mean it was MLMs fault. In fact, the fault lay with me. Having said that, I don't think people like direct sales in general. We don't have a problem giving a friendly recommendation to people when it's warranted, but to constantly be looking for sales wears on people. More to the point, people don't like being sold to.

Ignorance and outright misinformation fuels this notion and misconception about MLM.

And to be clear, every industry has its own negatives and bad publicity

MLM has been a blessing to millions all around the world. Created more millionaires than many other industry

if you are thinking of going MLM, make sure you study the industry, be thoroughly informed about the company and be sure the products are truly life changing.

MLM rocks

First I must say I am not a big fan of MLM but if it works in some cases then good for you.
Most of the MLM schemes are scams, but most not all.There are MLM companies which are working just fine and have been for quiet sometimes. The biggest issue is that people think and get the impression that MLM is easy. Just like any other job or business it needs tons of attention and time and hard work. Also they give you this feeling that it is easy, just get two people and then they get two and .... see how fast it grows, but that is total bull crap. Getting people interested and actually spending money on a product is not as easy, and if you only take care of the very first couple of layers and then get an attitude that I am the king so f*&@ it, then you are in a dumpster.
Finally if the MLM is based on a pyramid scheme, there is 99.999% chance of failure, statistically these plan fail and don't last.

I am a member of a good MLM program, or at least good in my opinion, i dont think they are bad programs, you just have to recruit alot to get any benefits, but then it is the same as list building as you still have to recruit to get people to sign up - i suppose it is down to experience with these programs and whether you have been successful or not.

I don't think that MLM per se is bad. It just has a bad reputation because all the scams that have happened before.

In my honest opinion, it all depends on the product. If there is a real product that have value and people love it then MLM is great. Since they are real buyers of that product. But if the product itself is getting all your friends and family to sell those products then eventually you will end the chain and have no more people to sell. And everyone will be left with a bunch of useless products that can't sell to anyone. Just the people that started the business are the ones that win.

MLM has a bad smell surrounding it because in the normal world, you go and buy products from supermarket
and that's it. But MLM charges you extra if you buy from their MLM system, and the same if you sell.

In real world, if you sell products, you get yourself a large commission or a large profit

In MLM , you must pay an intro fee for buying products from them...

And if you sell MLM products, first you must pay an intro fee to them,
and then in time you will get a tiny tiny commission, up to 4%... which is laughable

Because MLM is very close to a pyramid scheme style of business and is used by many shady and some outright illegal businesses.

Many of the biggest MLM schemes online don't even operate in a first world country because their pyramid schemes are illegal in most first world countries.

Another reason people hate them is because they encourage you to sell to your friends. So occasionally one of your friends will start trying to push you to buy something you don't want from them which is annoying.

And frankly, most MLM schemes are just a bad deal for their participants. Any company that forces you to buy a product from them before you are allowed to resell it to others for a commission is not actually interested in you "being your own boss" and making money for yourself. They are interested in you giving money to their company because you are a sucker.

Sure for every one good MLM, there are 200 Thousand Bad ones, but in my experience, I have never seen the mythical unicorn yet.

The topic of MLM on this forum is pretty much a non starter. I swear I've never seen so many people who claim to be knowledgeable marketers and business people who are so ignorant about a particular subject yet insist on offering their unfounded opinions as facts.

It's laughable. If you want to know something about network marketing... MLM... ask someone who actually knows something about it. There are precious few of those people on this particular forum.