Why is MLM considered a monster?

64 replies
Why do so many people hate MLM? The general public are against MLM...but why?

Most of the MLM companies offer a fairly solid compensation plan, plus they offer products which you can use along the way. There are so many out there to choose from. I just don't have the answer as to why MLM is a "dirty" word.

Is it because of the party plan style? People get sick and tired of being asked to go to someones house to watch a presentation and feel that they must buy products. Not all operate this way though so what is wrong with the rest. Am I defending them? No I am not not I am just trying to understand it better.

I have recently joined a MLM company, and yes I was told all the usual stuff. Its easy they say! Be your own boss they say! Create your own financial freedom they say! All of this is appealing to those looking for more ( including myself). I soon found out that this is not entirely true. It is far from easy and I still am working my 9-5 monday to friday, which mind you isn't all that bad. Am I making money? Yes a little but nothing to gloat about. Are the products good? Yes they appear to be but they are very pricey. This is why it is a tough gig. The early days you don't make any money but must buy the products or a certain amount to maintain your account levels.

So why? Why is it that everyone hates it. If the majority of people bought into it then we would all make money wouldn't we? Or maybe not.

The company I have joined has only been operating for a short period of time and is climbing the MLM charts rapidly. Could this be the reason I am seeing so many involved having a lot of success?

Personally I don't like to put all my eggs in the one basket so I run a few little extra income projects all the time. Right now one of them is MLM. My wife loves the products but hates the concept of selling them to people we know. So what is so bad about MLM?

Fire away, I'm looking forward to reading the feedback....good and bad!

Cheers
#considered #mlm #monster
  • Profile picture of the author Iale
    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."
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    • Profile picture of the author shka2789
      Originally Posted by Iale View Post

      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."
      Thanks for your explanation.
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    • Profile picture of the author mondayitis
      Great explanation and it makes sense. At some point we have all either been asked to join a MLM company or have joined and give it away due to all the negativity.

      I wonder if this common opinion will ever change? It is a tough world out there and the cost of living is becoming more and more. I take my hat off to those that do succeed at MLM as I tend to like the business model. It's a simple case of each to their own and in the case of MLM those that agree with it seem to be the minority.

      It is also tough to market MLM online because of all the haters and people that think its a scam. Most times its not a scam but the sales pitch never displays the actual reality. I believe it is a great platform for people who are unemployed and want to actually earn some money. For one they have the time spare, they may not have the funds so this is where it is tricky for them. Some offer free start ups which I am not so sure about. Nothing is free.

      A lot of the more successful people in the world claim that MLM is the way to go and its the new age of business. I still have doubts but time will tell I guess.

      Peoples opinions are hard to change. It seems the negative side of any opinion seems to gather more followers.

      Cheers
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  • Profile picture of the author DubDubDubDot
    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.
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    • Profile picture of the author hannahlist
      Originally Posted by DubDubDubDot View Post

      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.
      Yep.

      The focus is primarily on the REGISTRATION fee or the recurring fee.

      That's where the money is made NOT the actual product itself.

      Considering how people get desperate and try to sell to their social networks, it's easy to see why people are skeptical of MLM.
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    • Profile picture of the author paulie888
      This doesn't apply to every MLM, but it does apply to quite a few of them.

      It'll be pretty obvious to you because when you attend any of the company events you'll find that the focus is almost solely on the amount of money you'll make with the opportunity, with the product itself being almost an afterthought.

      The product is relegated to the background, and typically in order for a company to be able to make big payouts to its members the products themselves have to be grossly overpriced by necessity.

      Originally Posted by DubDubDubDot View Post

      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.
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  • Profile picture of the author Sarevok
    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.
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  • Profile picture of the author Jonathan S
    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.
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    • Profile picture of the author myob
      Very few people truly understand the concept and real power of MLM. It is perhaps the most leveraged and advanced marketing system ever devised. This industry has produced countless millionaires, but the failure rate is high because the low cost of entry seems to attract mostly those who are unprepared to run a business.
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      • Profile picture of the author Kay King
        I'd suggest you read a recent (very) thread:

        http://www.warriorforum.com/main-int...mlm-v-2-a.html

        MYOB is right - mlm can be quite powerful, can be profitable - but most people don't do well.
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  • Profile picture of the author leilani
    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
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    • Profile picture of the author Zodiax
      Because it is impossible for everyone to be successful at MLM.

      It is mathematically built on the failures of other people.

      That is why it has a bad name. It is a legal way to abuse people.
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  • Profile picture of the author duke22122
    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.
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  • Profile picture of the author professorrosado
    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.
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  • Profile picture of the author DubDubDubDot
    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.
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    • Profile picture of the author Zodiax
      Originally Posted by DubDubDubDot View Post

      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.
      I think delusion sums it up best.

      It's like the old I robbed a bank to support my family and it was the only way mantra.

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    • Profile picture of the author professorrosado
      Originally Posted by DubDubDubDot View Post

      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.
      I was called in by a friend of mine to help him decide on joining a MLM or not and after I heard the presenter's pitch I ask him a simple question: "what do I do with the products I have to buy (the only one the company produces)?" He said, "NOTHING - You just get another group of people to join you!"

      LOL!

      The company (still) sells worthless services you can't sell anyway due to the fact there are hundreds of free services people already use. The people are just interested in the comp plan that has a hefty price tag supporting the dreams and hopes of thousands! Let us pray!

      Needless to say my friend never joined.
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  • Profile picture of the author DRP
    Originally Posted by mondayitis View Post

    Why do so many people hate MLM? The general public are against MLM...but why?
    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)
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    I'd rather tell you an ugly truth than a pretty lie.
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  • Profile picture of the author stackman
    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.
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  • Profile picture of the author Jassen
    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.
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  • Profile picture of the author Chris30K
    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.)
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  • Profile picture of the author Joe Benjamin
    ...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.
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    • Profile picture of the author discrat
      The only MLM companies that have any legitimacy are the ones that have ACTUAL quality products that people would use and buy without any business opportunity involved.

      That disqualifies about 95 % of the MLMs out there.


      And thats why they have a bad name because most are just pyramid and ponzi schemes




      - Robert Andrew
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    • Profile picture of the author professorrosado
      Originally Posted by Joe Benjamin View Post

      "big, bad evil MLM marketing company that provides
      a viable, useful service or product to the public"
      Where? I just gave you one example of a company whose products you couldn't get your grandmother to use!

      Show us how EVERYONE can be successful in the MLM you're referring to?

      Then at least you'll have a point to stand on.
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    • Profile picture of the author Jennifer Hutson
      Originally Posted by Joe Benjamin View Post

      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"
      Except 99% of MLM companies only care about you reeling in your next recruit and not how their products are actually going to help people.

      Very large companies (Avon, Tupperware etc.) are usually the only truly legit opportunities. I personally wouldn't touch a single online MLM company.
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  • Profile picture of the author kimwillis
    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.
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  • Profile picture of the author Randall Magwood
    Originally Posted by mondayitis View Post

    Why do so many people hate MLM? The general public are against MLM...but why?
    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?
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  • Profile picture of the author Tsnyder
    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.
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    If you knew what I know you'd be doing what I do...
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    • Profile picture of the author bigballin6161
      Originally Posted by Tsnyder View Post

      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.
      Ya MLM would be the best business model ever if the people you recruited actually were able to duplicate the work and effort that you put in. They don't thats the problem. So no matter how hard you work you are still relying on other people for you to make it big.

      I would much rather put my efforts into my own business without having to worry about about a bunch of slackers, which mlm attracts like flies.

      I hate MLM if you cant tell.
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      • Profile picture of the author Tsnyder
        Originally Posted by bigballin6161 View Post

        Ya MLM would be the best business model ever if the people you recruited actually were able to duplicate the work and effort that you put in. They don't thats the problem. So no matter how hard you work you are still relying on other people for you to make it big.

        I would much rather put my efforts into my own business without having to worry about about a bunch of slackers, which mlm attracts like flies.

        I hate MLM if you cant tell.
        Perhaps you tried and failed to develop duplication in your organization... that
        hasn't been my experience. I love MLM if you can't tell.

        MLM doesn't attract slackers. Slackers who are in MLM attract others slackers.
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        If you knew what I know you'd be doing what I do...
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  • Profile picture of the author tiffanymika
    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
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    Tiffany Mika

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  • Profile picture of the author Trey Morgan
    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.
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    • Profile picture of the author myob
      The failure rate in most "businesses" such as IM and affiliate marketing is estimated to be 95%, primarily because people in general have no idea what they're doing and are too lazy to learn. We can see so much of that right here on the WF. There are claims that the success rate for breaking even or even making money in MLM are far worse than other type of business. In my not so humble opinion, the allure of easy money and low cost of entry is what attracts large masses of the unprepared, uninformed, and feeble-willed who later are the quiters, complainers, and whiners.

      The fact is, MLM is the most advanced leveraged marketing system ever devised. Some of the best marketers I know are in MLM. There is a built-in mentoring system, and the smart ones know their success is largely dependent on the success of their recruits and downlines. In my own experience, the best recruits are those who are goal-oriented such as business executives, small business owners, professionals, single mothers, teachers, and influencers within religious and social organizations. The main problem seems to be is that most people just do not have the mindset or discipline needed for running a successful business.
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  • Profile picture of the author Raydal
    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
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    • Profile picture of the author DURABLEOILCOM
      Originally Posted by Raydal View Post

      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
      Best post of this whole thread.

      MLM is Connsidered a Monster Money maker with the correct MLM Company.

      What do I mean by the correct MLM Company?
      +A company that has been around for 15+ Years
      +A company that has a Premium Quality Product or Service that actually adds value to the customers life.(You should try the product yourself prior to joining any company and determine if it is something that is of Premium Quality and that you would be proud to be involved with.)
      +A company that has a structured Training/Education system infrastructure.
      +A company with a concrete Commission/Bonus Payment system.

      Alot of people replying in anger here have most likely been burned by some garbage wannabe MLM company which was based on RECRUITMENT of others into the business.

      MLM should be built by selling a Premium Product or Service FIRST, Recruitment should not be the primary goal nor the only method of earning.

      People fail in every kind of business imaginable, to sit here and alienate one kind of Business vs all others is asinine.

      The bottom line is there is no other business model like MLM that allows you to have your Own Legit Business for extremely low startup cost most being under $100.

      Everyone expects to sign up for an MLM company and have the money start coming in.

      MLM Works IF YOU WORK. Just like any other business in the World.

      You Reap what you Sow.
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    • Profile picture of the author discrat
      Originally Posted by Raydal View Post

      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
      The end all be all Post in this Thread.

      The most important questions or doubts about MLM can be answered and summed up in Ray's analyses located right above

      In bold, I highlighted a a few of his assertions that really standout


      - Robert Andrew
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      • Profile picture of the author myob
        Originally Posted by Humbee360 View Post

        @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.
        You are right that I have a "dog in the hunt", but I don't see where I've been "splitting hairs" or "hypocritical". Lucid erudition is one of my specialities. And the MLM business model has been adjudicated, proven, and an accepted practice worldwide for over 70 years.

        Originally Posted by Humbee360 View Post

        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.
        Due to my wide publicity, I never mention specific MLM companies in any of my public comments, but there are very few companies in general (non-MLM) that meet all such criteria you listed.

        Originally Posted by Humbee360 View Post

        (Before you try to Bull crap us and or me) be aware that I never ask a question I don't already know the answer to.
        It looks like you've been to quite a few disappointing MLM business opportunity events.

        Originally Posted by Humbee360 View Post

        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.
        There are no blue chip corporations that practice "Pyramid" marketing. Pyramid marketing is illegal, but I do agree with you on this point {sigh} that Pyramid marketing is a failed business model. Not so for MLM, however. In fact, there are several dozen very successful MLM companies on the NYSE, NASDAQ, and other stock exchanges. One such MLM company on the NYSE was mentioned right here in this thread. Companies with failed business models don't last long on stock exchanges.

        Originally Posted by Humbee360 View Post

        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.
        MLM is not for everyone, but that has nothing to do with the fact that it works for millions of people worldwide. Affiliate marketing does not work for everyone either, but that doesn't mean it's a failed business model. Nearly everyone (95%) fails in IM as well, but again it's not a faulty business model.

        The concept of MLM is similar to a franchise - without the huge cost of entry. As in MLM, a proven business plan is replicated to the franchisees. And by the way, most franchisees fail within the first five years, but that is hardly ever due to the business model itself. Are you beginning to see some kind of a pattern here? Success is not an entitlement, despite what you seem to believe.
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  • Profile picture of the author TheZafraGroup
    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.
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    • Profile picture of the author professorrosado
      Apparently, no one READS posts in this thread!

      If you read my previous post you'll understand why people with a brain do not like MLM.

      I can't speak for everyone else, but companies like the one I described, THEY are the ones who give MLM a bad name.

      The efforts of warriors on this forum is, at minimum, to wake people up from their make money quick "stupor" and educate them enough for them to take a step back, turn down the hype and look carefully at what is the "business" being presented.

      In the majority of cases, they are ill prepared for the "business" and , thus, are disillusioned by it sooner or later.

      Just chalking it up to failure is easy for you to do - but when "business" lies to its recruits and hides behind a facade of being a real business driven by a real product, then that my friend is deception, scammy and has no place amongst an audience of free and thinking minds!
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  • 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.
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  • Profile picture of the author Rickeydt
    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
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  • Profile picture of the author troy23
    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.
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  • Profile picture of the author Jeff Schuman
    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/
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  • Profile picture of the author Tim Franklin
    MLM,
    Multi-Level Marketing (MLM) is a marketing strategy in which the sales force is compensated not only for sales they generate, but also for the sales of the other salespeople that they recruit. This recruited sales force is referred to as the participant's "downline", and can provide multiple levels of compensation.[1] Other terms used for MLM include pyramid selling,network marketing and referral marketing. According to the US FTC, some MLM companies constitute illegal pyramid schemes which exploit members of the organization.
    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.
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    • Profile picture of the author myob
      Originally Posted by Tim Franklin View Post


      That is the rub, that is why the business model is a failure.
      The failure rate in MLM has much more to do with factors other than this particular business model itself. Over half of all new businesses fail within the first five years. The leading causes of failure are incompetence, lack of management experience, and lack of knowledge in the product line.

      There is a much higher rate of failure in home businesses including IM, affiliate marketing and MLM for the same reasons as above, in addition to unreasonably high expectations, the low cost of entry, low commitment levels, low business acumen, and a general deficit in core marketing skills.
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      • Profile picture of the author Tim Franklin
        Originally Posted by myob View Post

        The failure rate in MLM has much more to do with factors other than this particular business model itself. Over half of all new businesses fail within the first five years. The leading causes of failure are incompetence, lack of management experience, and lack of knowledge in the product line.

        There is a much higher rate of failure in home businesses including IM, affiliate marketing and MLM for the same reasons as above, in addition to unreasonably high expectations, the low cost of entry, low commitment levels, low business acumen, and a general deficit in core marketing skills.
        I think you just agreed with me on everything I said, worded differently but the same result, its a failure because of the things you mentioned and its a failure because it makes promises that are not realistic, just like many of the products you see online today, that say " Make millions without doing anything" just have a quick look at the market place and you will see it all over the place.

        its a failure because it does not work and its a failure because it does not last.
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        • Profile picture of the author myob
          Originally Posted by Tim Franklin View Post

          ...its a failure because it makes promises that are not realistic, just like many of the products you see online today, that say " Make millions without doing anything" just have a quick look at the market place and you will see it all over the place.
          I partially agree with you on that point, but I think you're twisting my words around a bit. You have failed to acknowledge the fundamental reasons of failure. A better look (ie "due diligence") will show that ignorance, personal irresponsibility, laziness and dishonesty are not a reflection on the effectiveness of the MLM business model itself.

          Success begins at the intersection of a solid company, products, education, leadership, training, focus, and ongoing personal development. Using a systematic approach, it generally takes 3-5 years of hard work to reach a sustainable 6-figure income. The unfortunate reality as I mentioned is most people are not prepared or don't have the right mindset to start a business.

          Originally Posted by Tim Franklin View Post

          its a failure because it does not work and its a failure because it does not last.
          I personally know about 22,000 people who strongly disagree with you, and there are perhaps 65 million others.
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        • Profile picture of the author Matt Fulger
          Originally Posted by Tim Franklin View Post

          its a failure because it does not work and its a failure because it does not last.
          But what about companies like Avon? Which has been around for 130 years? Claims to be the first Direct Marketing company and is currently the #1 Direct Marketing company in the world (operating in over 30 countries)? Seems like 130 years is lasting quite awhile to me. I don't personally know for a fact how long they have been around, but I know they have been around my entire life. And according to Avon they have been around since 1886, originating as The California Perfume Company.

          They do have real products, but they definitely encourage you to get other people to sign up under you and then train them to get people to sign up under them, etc., etc., etc. That is Multi-Level Marketing, is it not?

          I personally don't care for MLM overall because the vast majority of them that I have looked into are pyramid schemes with no real products, that requires you to sucker other people into the "opportunity" and/or have insane "qualifiers" that requires you to spend more money than you earn and have an overly complex compensation plan that no one really understands. On top of that, they recruit people through flat out lies. You can't tell people that you are trying to recruit that there is no work, no overhead, no selling, no recruiting, etc., when in fact, there is all of those things involved.
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          • Profile picture of the author Andre Slater
            Because they think it's Magic to it and by just getting 5 people they will be rich...

            Then they get in and they find out it's not that easy and it's a business that takes more work then what they expected and then they scream SCAM...

            Then they go online and bash the industry because they invested 100-500 bucks and didn't make 100k in a month.

            It's crazy because they spend a ton of energy on telling the world its a scam instead of spending their time and effort to make it work.

            They don't realize that it can't be a scam if people are making money from it and it actually works and the product actually works and helps people...

            How can that be a SCAM?
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  • Profile picture of the author expressg
    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.
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  • Profile picture of the author Humbee360
    @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.

    (Before you try to Bull crap us and or me) be aware that I never ask a question I don't already know the answer to.
    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.
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  • Profile picture of the author felisitie
    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.
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  • Profile picture of the author thereikid
    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.
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  • Profile picture of the author safrasolutions
    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.
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  • Profile picture of the author kakah
    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
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  • Profile picture of the author Mehdib
    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.
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  • Profile picture of the author mapasm2003
    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.
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  • Profile picture of the author itos
    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.
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  • Profile picture of the author Nisip
    Banned
    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
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  • Profile picture of the author Curtis2011
    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.
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  • Profile picture of the author Tim Franklin
    Sure for every one good MLM, there are 200 Thousand Bad ones, but in my experience, I have never seen the mythical unicorn yet.
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    Software Development | Applications | OSX | iOS | Android | Cloud Software Engineering |
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  • Profile picture of the author Tsnyder
    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.
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    If you knew what I know you'd be doing what I do...
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