Flickr image "Greed" by Muffet
I recently had lunch to catch up with ex-colleagues from my very first job. It was a pleasant lunch as we caught up with the developments with the organisation and how each of us were doing.
Towards the end of the lunch, one of the colleagues started to talk about a business opportunity. It turned out to be an multi-level marketing opportunity.
Immediately, the red flags and hazard lights in my mind flashed repeatedly!
*Warning* *Warning* *Bullshit filters ACTIVATED*.
The reality behind MLM is that most people do not make money from it. The ones that do are those at the top of the MLM chain who started the entire business so that their downlines are the ones working hard for them. There are many references about MLM and you should make up your own mind. But my personal experience has been horrible.
My spouse was once recruited by an MLM outfit and for the week that she was with them, she was a totally transformed person. She was even “brain-washed” to expect objections from family members to her involvement with such a business.
Thus, I view MLM opportunities with skepticism and cynicism. Most of the evidence I’ve seen points to it being exploitative and driven more by profits rather than genuine regard for customers.
After this experience, I now view my ex-colleague with a degree of suspicion in that does he want to meet up because of our relationship as ex-colleagues or does he see me as another potential recruit for his downline?
Have you ever been approached to join a MLM program?
What did you do and how did you feel?
Share with Panzer in the comments section.
musicwhiz says:
Hi Panzer,
Come to think of it, I have attended 3 (no wait, 4 !) MLM talks and have gone out from each one feeling more than a little disgusted. If money was so easy to make, who is going to do the REAL work to drive the economy ? Sounds like a case of money being passed around from one person to another, in this upline/downline system; but are the REAL products being sold and what benefits do they have for customers ? Some of the items look like poor quality imitations of existing products, while others look like overly expensive versions of products which no one really uses. I even attended a talk where they played Kiyosaki’s Cash Flow Boardgame and gave out “prizes” before sitting down to talk to people about running their own “business”. The problem is that everyone is always vague and evasive when asked if this is an MLM system, like as if there’s something to hide ? If it was so respectable and open, why keep it such a secret and not reveal it is an MLM talk until one actually arrives at the doorstep ? That is what I do not understand. A worthwhile business opportunity should be openly communicated and the costs and benefits articulated expressly.
It is a fact that I had to ask and dig much deeper before they would reveal their commission structure, and only after repeated attempts to find out more about the system did they fully explain it to me. And trust me it did not sound attractive when you knew how it really worked because as you mentioned the downlines are just “feeding” the uplines. It is an effort to even build up a network of people to be your downline as you go around offending and scaring lots of your friends/relatives whom you approach.
Suffice to say I did get pissed off with a friend when she introduced me to this, and we didn’t speak for a while. It was only after a period of time that we began talking online again, and she was careful to avoid the subject of MLM.
So I guess that sums up my thoughts on MLM – sorry no easy lunch at all. I would rather invest in equities…..haha.
Cheers,
Musicwhiz
wiseinvestor says:
Not really approached by MLMs but when looking for temp jobs before entering university last time, I noticed there is a list of job advertisements mentioning about earning $600 per week from part time work, if you look carefully enough at the telephone numbers of the few temp job advertisements of them(usually second last page of The Straits Times Classified), the beginning 4 numbers are the same, meaning to say that from the same company or around same locations, i.e. most probably MLMs.
As for products sold by MLMs, I don’t foresee that they will got any value. If I know of some niche products that got a good demand and exclusive knowledge of where to get/suppliers, I will most probably sell them on ebay, rather than recruiting an army of downlines and give commissions to them.
I heard from my friends that in MLMs, the person recruiting you into it will first persuade you to buy those MLMs products so as to recoup time and effort invested in persuading you to join.
If one is damned good in sales and establishing rapport and leadership qualities, then it is better that he/she joined Prudential, at least Prudential is there 10 years later. Most MLMs become non existent in less than 5 years time,all the downlines build up will be wasted.
Or that if he/she got stellar academic results, together with factors like excellent communications skills, then it is better that worked as investment banker to make first million and invest it well in various financial assets.
Anyway, download famous author of Rich Dad Poor Dad latest book for free at his own website, conspiracyoftherich.com.
Free reading of book ends on 07 July 2009, after which it will be published as hardcopy and selling for more than $20.
panzer says:
MLMs only work for those who are in the topline. Everyone else is mostly working as a slave at own costs. Not much different from being a salaried employee except that there is no salary!
What I dislike about some MLM’s operations is that deceit and deception is the name of the game. If it’s so legit, why aren’t people upfront about it?
Panzer says:
Hi Musicwhiz
I share your sentiments exactly.
It really changes those people who are involved in MLM.
I’ve learnt to keep a wide berth from people pushing such products/services.
Be well and prosper.
Panzer’s last blog post..NTUC Thrift Account Rates Decline
Joe says:
I attended one session
..few years back. Roughly remembered the company had the word “international” in it – obviously to sound grand.
I was brought there by an old school mate who only said he wanted to discuss some business opportunities.
The MLM company rented one of the floors of Suntec. This is another typical strategy to impress you upfront with their office. It was a big area with many small tables. This is probably the optimal setup for their consultants (or whatever they call themselves) to talk to you on a one-on-one basis.
The topics covered include confidence building, financial freedom, making changes in your personal outlook, and tons of “real life examples”. “membership fees” and cost of goods were intentionally left out until they feel you’re psyched up enough to ignore the numbers. Payment machines were on standby to catch your impulse. I hadn’t got the patience so I interrupted the indoctrination to ask about the costs.
After I heard the numbers, I made it clear I wasn’t interested. That’s where the consultant’s “mentor” swoops in. He’s clearly more polished and confident. But that only served to irritate me.
Eventually I left with a warning to my friend – try this again and we won’t be friends anymore.
My personal take on MLM
My interpretation could be wrong but here goes…
The actual product is just an excuse to get people in to build a network of resellers. The bulk of the profit of the company doesn’t come from the sales of the product. It comes from the participation fees of the resellers and their resellers. But the company will never admit to it. In fact, they’ll keep insisting the focus is their product quality.
I would liken the situation as those sleazy health centres. The “girls” there are officially employed just to give customers massages. From top to bottom, the entire organization will always insist so. BUT, all the girls (and their customers) know the real dough comes from providing “special” services. Human nature then takes over and they’ll focus on “special” services.
Similarly, the real money in MLM is growing your down-line, as compared to simply selling the products to end customers. One reason I imagine is that it’s easier to prey on naive folk’s greed, compared to going door to door to sell a product without a big brand.
I mean, compare the sales pitch, “sir, this product makes you healthier” versus the pitch, “sir, join me and you can be rich”. Which one sounds like an easier sale?
Very quickly, the growth of the network overtakes the sales of products as the key provider of profits. I think it happens naturally, with little need for the company to openly tell the resellers. All you need is greed.
That’s my 2 cents.
~ Joe
Honda says:
To me, MLM is just feeding off the general behaviour of humans which is greed. If you notice, many of the MLMs will emphasize a lot on the expected returns if you join them, and not on the products itself.
I ever had a buddy whom joined a MLM company, and ‘worked’ his way to the senior management and told me that the company authorized him to start up a new MLM line. Very truthfully, he told me the products are nothing, if he wants, he can even sell dung as the product. The main focus of the MLM is just recruitment to get more downlines, nothing further.
One MLM product that amuses me so much is the famed magnetic mattress. The MLM promoter told the greatest lie ever without batting an eyelid, claiming the mattress can cure cancer just by sleeping on it. I was wondering, if the magnetic mattress can cure even cancer, why would the WHO not act on it and introduce the great product to the world? Why would biotech firms struggle so hard to come up with potential cancer cures? Something for the brainwashed MLM dudes to think about.
Honda
SKL says:
Hi Folks,
Not to give wet blankets with regards to why MLM ppl do not upfront say its MLM.
I’ve been 2 MLM last time and been cheated and lose quite a bit of $. I joined because I knew very clearly after 3 attempts of life and death escape that life is more than just what we can offer to our job. Try have narrow escape or be a witness if you have loved ones dying of crtical illness without financial support and you will know what I mean.
Like everone posted here, the moment I heard its MLM, I immediately shut my mind without even wanting to continue my conversations with friends.
The cruz is which company you are joining, the chairman, how open is their marketing plan at 1st visit, what is the system you are following, what are the costs involved, any maintenance required, how long in biz- poineer industry or what and so and forth, etc.
I shall end my comments as below:-
MLM has only in Singapore for the past 10 years and Malaysia for 40 years followed by Taiwan 30 years. There are many ” old eagles” in Malaysia and everyone is very open to MLM products including the old aunties and uncles. The top 20% income earners in Malaysia belong to the MLM group, Malaysia PM has also urged the fellow Malaysians to do MLM in times of economic tsunami.
US which is the mother of MLM industry has the following statistics given out by ex President Bill Clinton:-
Network Marketing:-
No of people in the biz worldwide
2002 47 mio
2003 49 mio
2004 54 mio
2005 58 mio
2006 61 mio
2007 67 mio
Direct Selling Sales Vol
2002 85 billion
2003 89 billion
2004 102 billion
2006 109 billion
2007 110 billion
I can be contactable at if there any discussion required.
SKL
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panzer says:
Hi SKL
MLM typically benefits those who join the business early when they start. Those downlines are just working hard like employees to make the uplines wealthy. I don’t see it as very much different from being an employee except you don’t get a steady income, health benefits and you have to risk your own capital.
The statistics just show that MLM business is growing. What is the average MLM biz “owner” or participant making? If you read the http://www.skepdic.com website, on average, most will make pathetic returns.
I’ve seen personally how MLM can change people’s behaviour and personalities so drastically due to greed and lust to make big money. Close to a cult in terms of brainwashing IMHO.
Be well and prosper.