Your thoughts on MLM.

I have come across many offers and have seen some really interesting business models of some clearly clever but devious people.

There was this one that caught my interest but I honestly don't intend on ever promoting them. But here's a brief description of their business model.

Members are asked to join for a fee of $49 once off. You are entitled to a 21 step training program with a personal coach who will guide you along the way as you go. The trick here is as you reach step 6, you need to request the rest of the training from your coach for each step which seem like a good marketing ploy to keep member in suspense. However the company does not have competent coaches that respond on time or help new members with the fairly easy task.

And the best part of this is i read all these reviews on the net after doing my due diligence on the company and its offer. I always read up first so see others experience with the offers available online.

Then if you are lucky enough to get through the 21 step program, you need to pay $2000 to start promoting the company. You can just use an affiliate link but you commission is very little to almost nothing.

So what does $2000 get you. Just a means to promote the company to anyone interested in earning $1000, $3000 or $5000 in commission like clock work.

So I tried to understand how does this business model achieve these types of commissions. Lets take an example. MR X joins ABC Company and pays his $2000 joining fee. The individual who signed him up earns $1000 in commission. If Mr X himself gets people to join the company and pay the $2000 joining fee then he will receive a $1000 for every person that pays the $2000 joining fee. The typical MLM business model.

But this company has taken it a bit further. They offer their members an opportunity to upgrade their membership at any given time if they want to earn $3000 and $5000 like clockwork. Meaning if a member upgrades then the individual who signed him up will receive a commission for that upgrade provided that the member has also upgraded. So upgrades are I think are $6000 and $10 000. Alot of money if you ask me. So members are forced to upgrade at some point to avoid losing out commission if their down-line upgrades and they don't.

So you get the picture how they manipulated the system for people to earn the commission like clockwork with upgrades taking place all the time.

What is the company selling? Nothing basically. Just recruiting people to recruit more people and so on and so on.

So what do you think about companies who use this business model?

 

Hi Greg,

I am not going to give you a long explanation for this as these type of companies are a BIG FRAUD!!! You pay them just to promote them? They will earn from you and not you.

 

MLM has been around loooooong before the Internet was even a thought in an engineer's head. The only people who benefit financially from such an endeavor are the scamsters that set them up from the beginning. Everyone else, moving forward, is a dupe who will soon be parted with his or her money. Many scamsters try to hide their phony business scheme by making it complicated to understand and comprised of many steps that will cost money and promise big returns at the end of the process. The capitalize on greedy, naïve people who think that they are thisclose to great riches without working for it.

Here is the ultimate acid test for any such business proposal: if it is such a great business that is making money hand over fist, why are they willing to sell the concept and the means to the business for such small upfront payments? If an honest businessperson had a fantastic business model that was producing significant income, s/he would never offer it to someone else to do the same thing for a small amount of money.

By the way, this test also works for people selling books, videos, training, etc., that promise to show you how to make money fast and easy. If they really had a great formula for such a business, why would they really share it and not just keep it a secret and do it themselves?

 

I think the idea of becoming rich drives alot of people to give up their hard earned money in the hope of becoming rich. The cycle just keeps going on and on and on.

 

As Dave Ramsey says: "Being a good MLMer you have to, first and foremost, be a good sales person. If you hate being a sales person, MLM isn't for you kiddo". Or something to that extent.

 

No one I know has ever made money by joining an MLM. I would strongly discourage anyone from joining an MLM.

 

This is so true. People I know personally have not made any money. People I don't know claim to make so much money. The circle of life.

 

MLM can work, but only around 3% of the members make any money. Real MLM's that aren't a scam will state their earnings report for members promoting their product.

It's definitely not for everyone and most people make nothing with it.

 

Everyone is correct, I have been part of many, they charge you for training in form of DVDs or books. It wind up costing me lots of money.

Now on the positive side, the format can turn people into salespeople for your product, just spent 6 months studying how to have a legit program, selling a weight loss product, lose weight with no exercise, not joking, tested, that people that use the product could make money from getting their friends and relatives to buy it and use it. The Gov, says the US is really obese. What we found is there is a way for people to make some real money by selling this product online. You get your own website. Right now NO COSTS to you to promote and sell the product. PM if you want the link and information.

If you know people in the fitness business or alot of obese people, this would be perfect for you.

 

It was always strange for me to see people going from one MLM company to another, praising their products and constantly pumping up theirselves with unnatural positive attitude. They don't earn money as I know, but believe in money dream, again and again.
It seems to me to have much common with religion. What is it I wonder?

 

The famous circus entrepreneur, PT Barnum, once said, "There's a sucker born every minute." What he did not expound on is the fact that many of these suckers simply never learn and go through life being taken by scamsters again and again. And, you are right, it becomes a matter of faith for them because the facts sure don't back up their thinking. Einstein is supposed to have said that the definition of insanity is to keep doing the same thing over and over while expecting a different result each time.

 

So true. I remember I was at an MLM-related meeting of the well-known nutrition and weight management company. When they started singing, clapping and praising their business and products, for a moment I thought I was at a church or something. It was a very eerie experience.

 

What gregs82 is talking about is a pure ponzi scheme. There are a lot of good companies with MLM affiliate programs out there.

Although I agree it's not for everyone.

 

Yes, I remember one of these for selling products, Amway and some Insurance selling company, they both did that. As I look at it now it seems why grown adults would do this.

 

So just from the sounds of it, you are describing a classic Ponzi scheme. Unfortunately, many Ponzi schemes or pyramid schemes have, over time, masqueraded as legitimate multi-level or network marketing companies. In turn, they have tarnished the name of legitimate MLM/NM business opportunities.

Unfortunately, the industry is fraught with examples such as the one you have shared. I have been fortunate to find a couple of legitimate MLM companies over the past 10 years that have been honest companies. What I mean by this is that they pay commissions for products or services sold - not for fees paid by others to join the business. In essence, a legitimate MLM opportunity is nothing more than a multi-tier affiliate program, where the commission is split among many instead of just one. Of course, we are all familiar with affiliate programs and we know they are legitimate (in general). The unfortunate thing about it is that, unlike in affiliate marketing, there are not too many legitimate MLM opportunities out there.

So to answer your question in regards to what I think about MLM --->>> I think pure MLM is a great business model! Unfortunately, too many try to pervert it and it can be a tough sell these days. Is it something I would do? Absolutely! As I mentioned, I am involved in a couple of MLM opportunities now. Do I recommend it for everyone? Of course not, just like I would not recommend any type of business to everyone.

 

I totally agree with you. I once attended a MLM meeting which i didn't know about as it was fairly new at the time. Everyone was dancing and singing and I was like WTF!!! Oh well these people make crazy money from doing this shit, I might as well get on board. Eventually got duped into paying the joining fee but never made a cent. My brother on the other hand made some good cash cos he introduced all the family members to it so I was glad at least someone I knew benefited from it.

 

I totally agree with you. The problem is not in the MLM model. The problem is people believing it is for everybody.

 

I work for a MLM company where you can make a LOT of money with your skills. Please message me for information. Affiliate marketers are thriving on my team with our product which was just featured on Inside Edition last night

 

Hardwork & Determination are the two key factors.

Don't scam, no cheat and free from exaggeration - you'll do better in the long run when referrals all come..

Likewise, if the company defaults or frauds, certainly wish you all the best instead!

 

I remember answering an ad on craigslist a while back that stated "new career opportunity plus free lunch". I went for it and met the guy at a restaurant and next thing I knew there were about 20 to 30 more people that showed up. It was like a big conference. While we were all eating burgers and fries, one guy was up front explaining, or should I say "preaching" to the crowd about how great this product was. It was a product about legal insurance. The product was very inexpensive but to sign up for the program was around $600 and whoever brought me there would get a commission. So all I had to do was put ads on craigslist, invite people for free lunches and tell them about the company. Of course I didn't sign up because I knew it was all a scam but that burger was pretty damn good.