Business Opportunities

Is Multi-Level Marketing A Scam?

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Is Multi-Level Marketing A Scam?

Maybe???? What???? Let me explain.

Let me start out by saying that I have always been a major skeptic of any M.L.M. (Multi-Level Marketing) company. As far as I was concerned they were scams. I was first introduced to M.L.M. in my early 20’s to a company that you have probably heard of, Amway. Amway was the big thing back then and if you joined you were going to make a million dollars. The skeptics, like myself, said it’s a scam and they will be out of business in a few years. Guess what, they are not out of business and as a matter of fact, they are an 8.6 billion dollar company that is more stable than most any company out there today. I thought the same thing about Mary Kay, Avon, and Herbalife…lol

M.L.M vs Corporations

The thing is, for the most part, M.L.M is really no different from any other big company out there. In big corporations, you have different levels of titles from the C.E.O. and the fancy titled supervisors, all the way down to the entry-level worker. Each level performs their own job with the intention of bettering the company. If you’re a supervisor you recruit people to help out in your department with the intention to make the company more money. You train them and the better you perform your job, the more money you can potentially make. Maybe you will get yearly raises or maybe you won’t. It depends on the company.

Within an M.L.M. company, you also have a structure. The C.E.O would be the person(s) who originally founded the company. You will have a varying amount of “employees” under the C.E.O. Instead of supervisors and employees, they are called independent contractors. Within these independent contractors, there are different levels. Instead of higher-level employees being called supervisors, they are typically called your upline. Different companies will use different terminology for the levels such as bronze, gold or ambassador. Everyone else will just be called consultants (employees in a typical corporation).  Again, different companies will use different names for these levels.

The big difference between a typical corporation and being an independent contractor with an M.L.M. company is that you are NOT an employee, you’re a business owner. This means you will not have to wait until your company is good and ready to give you a raise to make more money. You will also not have to ever worry about being laid off!!! Your success or failure is directly related to you. Your upline is also not your supervisors per se. They are more like a mentor. They want you to succeed. If you succeed, they succeed. No one is stepping on you to climb the corporate ladder per se.

Since it is your business you will promote the products and try and recruit like-minded people into your business to help it grow. You could say they would be franchisees of sorts. So you see, there are not too many differences between a corporation and your M.L.M business structure.

If you are promoting the products for others to buy, it only makes sense you should be using them yourself. If you do not use the products because you don’t like or trust them, maybe you are promoting the wrong company. You must believe in the product you are selling.

Pyramid Scheme?

Many people think it’s a pyramid scheme. In a pyramid scheme you are just recruiting people to invest a certain dollar amount and the more people you get in the more you make. The last people in have to keep recruiting or they will make no money. It’s all money-based. Sometimes products or services are sold but generally, you are just investing your cold hard cash. There are usually no quality products sold.

The Difference

That’s where M.L.M.’s differ. You might invest a small amount to get started (you need money to start any business) but that is where the similarity stops. In an M.L.M. you get training, help, and ongoing support on how to build your business, and you have quality products. You can either recruit “workers”, sell products, or both to make money. The guy who just started can actually make more money than the guy who signed him up!!! The only determining factor in moving up and making money is you!!! The more motivated you are, the better you will do.

Let Me Make A Few Suggestions

That being said, for as many good M.L.M. companies that are out there, you have just as many scammers. I have a few suggestions if you are going to try an M.L.M. company:

  • Do your research!!! Try and go with an established company with a long track record. Start-ups could be the “in thing” at the moment but could fizzle out in a couple of years leaving you high and dry.
  • Believe in the products that you will be selling. If you are joining a company but can’t stand the products they sell, you will not do well. If you believe in the products or services you are selling, you will be excited when you talk to people about them. They will pick up on that excitement. If you don’t use the products, why should they?
  • Do not listen to anyone that tells you that you will be a millionaire in 6 months. a good solid business takes years to build. M.L.M. is not a get rich quick business. If you are promised a million dollars in 6 months run do not walk away from them.
  • Be wary of any company that wants you to spend hundreds of dollars a month to keep your membership. It’s one thing to buy and use the products but another to have a closet full of “widgets” that you will never use just to remain a member.

The Bottom Line

The bottom line is M.L.M. is not a scam but as with other business ventures, you must be very careful and do your research. Many people who try this type of business will fail. It could be because of faulty or inferior products, a large number of products to buy monthly, or the company goes out of business. The biggest reason people fail though is themselves. They believe they will become a millionaire and travel the world within 6 months. When this does not happen they quit. They also think it will happen with no work done on their part. Make sure you research the company you will join.

The best part of these types of businesses is that they are location independent and can be done from anywhere. If the idea of having your own business and you’re willing to put in the hard work, give it a try. Just remember to do extensive research on any company you are looking into.

Have you tried an MLM business? Did it work for you? Do you have any questions about this article? Feel free to leave them in the comment section below

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