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Seriously, what is it about the whole Network Marketing Business mumbo jumbo… What is the network marketing business exactly?
Why is so appealing, that many people are willing to pay monthly dues just to work. You may be reading this still not sure if network marketing is a scam… The reason… well, it is and it isn’t a scam… all at the same time.
Well really slick sales presenters mixed with a hidden Ponzi scheme motives and some good ol fashioned peer pressure usually does the trick.
You have to sell and market products just to make money for only a few at the top.
The owner and early sign ups at the top make money from a pyramid of busy little worker bees.
To all those saying that Multi Level Marketing companies are not running a Ponzi/Pyramid scheme or even saying it’s not a scam, I can say yeah “technically” they’re not a scam, as they’re allowed to run by the FTC.
There’s A Huge But
MLM’s just create knockoff, No name, sub standard and overpriced products.
Then force people to buy, sell and recruit others into the mix.
Then “Voila,” a legit Network Marketing business is born.
The Legal Multi Million Dollar Opportunity Scheme That Flies Under Everybody’s Radar
The MLM/network marketing structure actually forces the distributors who join to create their own Ponzi scheme.
Usually they don’t find out the products are bad until later when it’s too late.
Typically at that point they’re already too invested in the business.
They say to themselves, it’s awesome and try to stay positive or else they will have lost money and time spent.
MLM’s Will Force A Percentage Of Distributors To Be Caught In A Dilemma With 2 Options:
Option #1 – To believe “ignorance is bliss” and sell average products for expensive prices to friends, family and people who trust you. You also have to make money off of the backs of others selling a fake dream to them.
Option #2 – You give up. Then be out the time and money you spent, which often times these MLM’s get you to spend a lot of both.
When you spend more, you have more “skin in the game” and is just more reason not to quit. This is good only if you’re doing something that is beneficial.
They use really strong psychological group peer pressure. Also hype up their products. Then use sales tactics to keep you doing what they want.
Special tactics used on the people signing up, are not the same generic sales techniques taught by the MLM’s training.
These are cult like secrets the owners of these MLM companies understand, that are used to deceive and sell millions.
They’re not just what the owners say but subtle actions they take, things they wear, how they talk. Also the images they show and the overall direction or path the community they’re cultivating, is headed towards.
If you don’t sell others the fake dream you have to cut loses and lose out on time and money.
The people who stay have to choose between the two options above later on down the road when the stakes are much higher.
All the members that pay monthly are essentially paying for the business.
The main revenue doesn’t come from the product sales it actually comes from the members drinking the koolaid.
Then the system gets loyally workers at the bottom of the proverbial pyramid buying in cases of products every month to support this .
MLM’s Are Worse Than Ponzi’s And Pyramids…They’re Actually Set Up Like Drug Cartels
Network marketing businesses make the owners of the MLM’s ( the drug lords ) a lot of money.
The recruiters ( The drug mules ) are set up for failure and expendable. But you could make good money… it’s survival of the fittest to make whatever scraps are left.
This is a dangerous risky job where you can strike it rich, but only for a little bit until the MLM fades out, losses steam or gets taken down.
Many know deep down what they’re doing feels wrong. Yet continue to do it cause at the time it feels as if there’s no other option.
The people who are unaware of how it works are typically at the bottom of the pyramid. Typically these people are still unaware this is a poor business decision, until they start investing more. By then it’s much harder.
Now the Top drug mules and the bosses will all make money at the top. This is typically easy come, easy go or hard come, easy go.
Soon they will most likely find themselves in a worse place then when they started. Then jump to the next scheme they can find.
With all MLM”s it’s the same as with drug cartel’s, their drug boss gets taken out (MLM goes out of business) and all the people go down with the boss.
Usually they start with the vibe they’re here to stay and a force to be reckoned with.
Then sooner or later they die out or worse get so well known that people run when they hear what you’re trying to offer. Then A new drug lord or cult leader is there to take their place with a brand new opportunity.
Don’t Let Yourself Get High On MLM!
You should think of MLM’s as basically narcotics.
Be extra careful that you don’t get “hooked on MLM” as it can be just like a “drug.” When your “high on MLM” you just don’t think clearly.
What Is A Network Marketing Distributor That’s “High On MLM?”
Well it’s that neighbor, co-worker, friend, boss, preacher or relative that just will not take NO for an answer.
They will bug you every time they see you and always work their sales pitch into every conversation they can.
When your “high on MLM” you chase people and call everybody you know.
This is not business, but professional begging and pressuring.
You hound and track down everyone you can until you can be apart of the coveted NFL, “no friends left.”
Try to sell these products to businesses that could actually use that type of product or service.
See how much they want it.
The majority of people in MLM’s sell to their friends and family.
What if you’re selling overpriced low quality products to them.
Then teach them to recruit others to do the same thing…
how good of a friend or family member are you?
Just remember when you’re “high on MLM” you do things that you normally wouldn’t do.
When you get under the influence of the “MLM drug” it can be hard to quit.
If you’re still getting “high on MLM,” think of this article as your intervention.
Which MLM Machine or Network Marketing Cult Is Going To Try To Get You Next.
Below are some examples and reviews of a few different types of some more popular Network Marketing business scams.
What Is A Network Marketing Distributor
So a Network marketing distributor is a person that decides to join a company that is based on a Pyramid structure.
These pyramids then throw in a lack luster products and subconsciously force you to buy cases of these products every month, making the distributors also the main customer. They can get you to buy in cases cause they know that many need them to sell and give away demos.
Then it is up to you to try to sell, market and distribute a product that has no real market.
So the only option is to quit or recruit others to do the impossible, sell average products for three times the price.
A network marketing distributor also has to sign up and recruit new distributors. Then teach them to do the same thing as them… build a downline.
They’re also responsible for babysitting that downline so that they can keep those people.
People at the bottom are never going to really succeed. If the person does get lucky enough to place themselves high on the pyramid they will be completely aware of that. They will have to sell people a dream that is really more of a nightmare.
By then they’re in too deep and it’s too late they make themselves believe in miracles & magic. Then they try to recoup their investment and hopefully profit.
Seriously What is network marketing… a legit business idea?
For those who are not familiar with network marketing, this is the same as multi level marketing. They also have a sneaky name like direct selling.
This gets confused with direct marketing which is a totally different thing involving marketing to people directly through media, such as mobile phone texts, email, database marketing, fliers etc.
They change the name of it so many times, because so many people have learned what they’re and are turned off by the thought of them.
Close But No Cigar… MLM/Network Marketing Distributors ARE NOT AFFILIATES!
MLM/pyramid/network marketing companies also sometimes even try to call their distributors, affiliates.
MLM’s are not even close to affiliates and real affiliate marketing.
This is a huge misrepresentation of affiliate marketing.
An affiliate promotes a product or service, does not pay to get in or buy products of companies they’re affiliates for every month.
They also don’t just sell one product line from only one business.
You don’t have to recruit others to sell under you as you just promote products you actually believe in.
So MLM’s are rumored to have spawned from the popularity of the chain letters and then blended with the brilliance of Ponzi/pyramid schemes, MLM/Network marketing was born.
They found out early on that if you add a product to a pyramid scheme it becomes legal.
They have popped up like grasshoppers in a brush fire ever since.
These people are making millions and they’re recommending MLM as a good business?
There has even been people such as David Bach from “Start Late and Finish Rich” to Robert Kiyosaki in the book “The Business Of The 21st Century” they both talk about MLM’s and Network marketing like they’re a good thing. That they’re the way to go if you want to make some money.
I guarantee if you could get an honest answer out of either of them they would say how they did not get their start in network marketing, but rather they got rich and found a person about to start a MLM. Then had a inside track on a early sign up or got paid a lot of money to recommend it or endorse it. Then I’m sure anyone would say how great network marketing is.
Well I would say that unless your friends are the ones starting that network Marketing business or MLM I would stay away. You will most likely lose lots of money and time just depending on how long you do it.
If you’re interested in getting the truth about Network Marketing you will really want to watch the video below.
You can also find some good information here about the top 10 big MLM lies if your interested HERE.
If you have a rich friend that is about to start a MLM and knows how to hype it up and speak in front of a crowd then go for it.
You will probably be one of the rare few that make money with it but no matter how you slice it you will either be getting screwed or screwing others.
Typically those others are friends and family members that trust you. After you get them involved in a MLM they wont trust your judgement for long.
The lucky few at the top of the pyramid that joined at the beginning make pretty good money but Is it really worth it?
Well in my opinion I would say absolutely not. Below is another opinion to back it up.
I actually would go as far as to say that I think that all MLM’s even though they’re legal, they’re a scam. Ok, now that I have written this I’m sure that some distributors are going to read this and get their undies in a bunch.
My intention is not to make network marketers mad but rather explain the truth so that people can break free from the hype and lies of Multi-level marketing.
If you only listen to distributors you will be stuck in web of lies and hype before you know it. You will never get a different perspective if you don’t at least consider a few things outside of the MLM bubble.
Speaking Of Hearing A Few Things, Below You Can Find All The Info You Need On Making An Educated Decision About MLM’s, Network Marketing or sometimes Even Like To Use The Term Direct Selling Below…
What is the network marketing business exactly?
Does this sound familiar…
If I could just have a little of your time (an hour or more), I can explain or give you a trial or sample of an incredible, innovative & revolutionary new ( energy drink, magical mushroom coffee, acai juice, goji berry juice,essential oils, mangosteen etc.) business and trust me it’s the same business that warren buffet uses!
Also it helped my uncle’s V.D. and slowed down my cousin’s butt cancer and now he is twerkin on the dance floor like Bobby Brown In the 90’s full of cocaine… If you want I can come over and meet with you or you can come to a meeting with other entrepreneurs and learn about this amazing new (insert product name here) that’s taking America by storm. All you have to do is sign up and buy in products every month and get a bunch of others to do the same and next thing you know you get, A NEW CAR!!! (insert “The Price Is Right” jingle.)
Sounds Reasonable, So Whats The Problem?
So,The Problem Is, There Is No Real Value In the Products, Only Hot Air And Hype.
So how do MLM schemes make it so far, well by cleverly disguising them. They come in all shapes and sizes from financial services (like priamerica) to health drinks and supplements like (juice plus and Le-vel Thirve ) to real estate such as Nouveau Riche.
To be a legitimate Multi Level marketing company you’re supposed to make at least 70% of their money off product sales not recruiting. Many of the MLM’s are very close to being a pyramid scheme of recruiting and getting paid when others pay.
Now I have called network marketing a legal Ponzi scheme in the past but Ponzi schemes are a little different. A Ponzi will just take your money in and give some of that money to the level above them to make the people think that it works.The people below pay for the people who signed up before them.
What is a Network Marketing Company and how did they start?
When people started to figure out that you could add a product to a pyramid structure and it becomes a legal business, they have been very popular.
All of a sudden loads of garbage products started flooding the market and people are already seeing the MLM salesman coming a mile away.
The main majority of profit for most Network Marketing companies is earned from new distributors and not the sale of the products to consumers.
So when you bring in people and recruit you’re promised a future paycheck from the people you signed up called your downline.
Promoters and recruiters of pyramid schemes as well as network marketing stress that you need to recruit to get a much quicker return on your investment.
This is when many people who are members start focusing on saying and doing anything they can trying to get people to become distributors and not selling a product to real consumers.
Then at some point something has to give and the pyramid will die out or shut down. The sale of the products by themselves typically fail because they’re overpriced and no real market exists for these particular sub par average products.
All of the products are sold though hard closing and trench warfare like selling. Then many just get pity buys from friends and family.
The main intentions of all MLM’s is make money first and help people last. This is backwards to the new way of business which is providing a service or solution to a need or want.
It is typically not very easy to find numbers of actual sales as many network marketing businesses and pyramid schemes will claim that they sell tons of their products when in all actuality the people inside the pyramid or MLM structure are the main sales volume as they’re forced to buy in products to be a distributor. If they do not buy the products they can’t get commission on the product type thing.
When you pay for something you also will tend to defend your purchase. Many feel cheated when they realize that they have been ripped off and will either not tell anybody cause they’re embarrassed or they start hustling harder and believing more and more which can lead to losing a lot more.
Monthly Auto Ship & Inventory Loading
Every network marketing scheme relies on making the bulk of their money from a monthly auto-ship that they force you to sign up with if you want to make money being a distributor.
It’s mandatory that you give them a credit or debit card where they can charge every month to buy products so you can them make commission if you sell something.
If you do not sign up for the auto ship every month and buy in products you will not be eligible to make commissions if you sell or recruit.
People then get stuck “inventory loading” that not only costs them money every month but also forces you to sell or you will just get tons of worthless products building up every month until you either sell them or give them alway or quit.
When people are forced to make purchases of products so they can get commissions on that product, lead distributors to give away excess unneeded products that they purchased while chasing the dream of easy riches, which by the way is not easy.
Often times the expenses of participation far surpass the money that is actually made in network marketing.
Suggested retail prices for MLM products are usually too expensive to be competitive. Big margins are added in to allow commissions to be paid to down lines without cutting into the companies astronomical profits.
So Why Do People Still Join MLM Network Marketing Schemes?
MLM promoters are masters of group phycology and really should be selling that as a product. At conventions they create an energetic, enthusiastic atmosphere where group peer pressure and easy money claims, play with people’s heads. This makes them feel that this is a great opportunity and they may miss out on a chance to get rich without a lot of work.
Also the people who did not make it and lost money or barely broke even after years of promotion and hustling rarely advertise the truth of their mistake, and the myth of success gets shown and glorified by the tiny few showing off their big checks with each new MLM that gets started.
It’s actually very hard to resist MLM influence unless you recognize and become aware early on that the odds are against you.
People who research MLM’s have reported that pyramid schemes and MLM’s tend to come in waves of three to six years and rise during economic booms.
The Problem With The Pyramids
So as I briefly mentioned above, the product that is incorporated into all network marketing businesses is just a cover for the real profit and to hide the fact that it’s truly just a pyramid with a fancy lipstick. Product price marked up with high prices is so that the Ponzi scheme can work, that is it.
Anything said is just to sell people as they cannot just say were just a Ponzi, so put your money in a hope for the best.
Network marketing companies have been said to be doomed by design as the more they grow, the closer they get to market saturation and this makes it very hard for people legitimately trying to sell the products like they claim you can do when really the only money to be made is with recruiting…”A Ten Hut, soldiers ! “
This is typically why you see big network marketing companies like Amway and Herbal-Life branching out into different countries.
As many veteran MLM distributors have PTSD from daily MLM combat in their past and there have been many casualties involved with MLM, so many here are jaded and want nothing to do with it…Then that is why MLM’s then do the opposite of the T.V. Show “Cheers” theme song.
“Cause sometimes you only want to go…. where everybody (DOESEN’T) know your name…Cause their always mad you came.”
When a network marketing business hits market saturation it’s like you signing up and recruiting people to sell hamburgers that are worse quality than McDonald’s for double or triple the price.
When McDonald’s are already selling a product that is better for half the price, it doesn’t seem reasonable that you will sell a lot.
Sure you could sell a couple hamburgers to your friends and family and get pity sales but that is no way to build a real business.
The main problem is that you’re not selling products as they’re just added so the company does not get shut down by the FTC for being a complete pyramid scheme. The main thing that you realize is that your selling others on the fake MLM dream.
The Math Does Not Seem To Add Up
Network Marketing businesses work by geometric expansion, where if you get 10 people to sponsor 10 more people and they then sponsor 10 more. This is shown as a pyramid with different payouts and kickbacks at different levels.
At just 3 levels deep would be 1,000 people.
At 6 levels deep it would be 1 million people
1 million people selling and marketing the same thing! That’s just getting started.
If ten more people signed up at the same time you did and did the same thing that would be 10 million people
10 million people selling the same thing, talk about over saturation. Not to mention they’re also selling a product without a real market or demand and there is no one really left to recruit. That is just your downline and the pyramid is just getting started.
Who Are You Going To Sell To When The Town You Live In Has Loads Of Distributors
By the time you start making money there will be no one to sell your average sub par products to, as everybody that you know and all your friends and family will be recruiters and will not want to buy products from you and there will be no one really left to recruit.
There is hardly any market left to buy the products and the exponential expanding nature of the pyramid structure makes imploding and collapsing of the pyramid basically inevitable.
This is just a hypothetical thought as there will never be a MLM that will be able to get that many people to join, as there will always be a percentage of people like me that will never join a network marketing scheme.
This is why pulling the wool over people’s eyes is typically the only way to sucker someone into becoming a network marketing recruiter.
The only way to get people is to flat-out lie or else most people will not see the benefit.
This is why Network marketers are always dodging questions and changing subjects and just quoting famous people.
They know their product sucks but by the time they figure it out they’re usually in too deep and it’s too late or they have to just quit, admit defeat and lose out on their investment and time they spent already.
It makes you wonder are network marketing businesses really trying to recruit winners to succeed
Are they really just setting you up for failure and hoping that they can profit off of the losers who buy into the hype?
Just the fact that network marketing companies are in such a hurry to recruit and over saturate and over-supply distributors with products is just poor business ethics.
All good MLM salesmen are quick to switch the subject with a fake testimony, joke or parable that they will use to hopefully change subjects and direct your focus elsewhere.
What Is A Network Marketing Business In The Eyes Of The FTC
Well the FTC actually tried to end Network Marketing right when it began in the 70’s about a decade after one of the first network marketing business Nutrilite, turned into Amway and after noticing a few others coming out of the woodwork the FTC started trying to crack down.
They claimed that any business that offers rewards for future expansion is deceptive and unsustainable which is basically saying that they’re liars and cheats.
They were not successful with Amway as they the judge rejected the argument and under specified conditions allowed Amway to stay in business.
The main condition is that sales of products must be at least 30% of the revenue and only 70% or less can be revenue from recruiting. Well rumor has it that many MLM’s out there are more like 10-20% of sales are products and 80-90% are from recruiting.
No Overpriced Products = No Compensation
There would be no way to really earn with MLM’s if they did not overcharge for their products and services. Then if you sign up your stuck with selling overpriced junk that can anywhere from not potent to potentially unsafe and untested products.
Not only do the products suck in general but the business has nothing to do with selling them. You’re selling other people on recruiting other people, so they can go out and do the same.
Most Network Marketing businesses have a fee to join and I have not come across one of them that doesn’t force you to buy the product.
Like I have stated above they’re overpriced so they can support the compensation structure. They typically rely on signing up distributors and getting them to pay the monthly fees, and not selling a real product that people actually want.
And The Award For Best MLM Goes To…The Higest Bidder?
Many of these Network marketing businesses have been known to buy trust. These companies must have taken a page right out of the politicians playbook.
For years MLM/network marketing companies have paid for better BBB ratings which is weird that you can actual pay for better ranking with the BBB, I guess it is time to stop trusting what they say. They have bought awards like the Stevie award or (DSA) Direct Selling Association awards.
They also pay people to do reputation management when they get negative reviews and drive down the negative reviews off of the first page of search engines.
One of the most common tactics for MLMs to gain authority in the market is getting accolades and putting their name beside it. They’re many awards that you can pay for that are out there and Network marketing companies really use them to the fullest.
There have been many network marketing businesses that have actually received multiple awards and then got taken down by the FTC so there is really no research done when these awards are given.
You’re Not Building A Real Business With Network Marketing Only A Temporary House Of Cards
With Network Marketing/MLM’s you do not own the business and you do not own your own website. You do not own anything besides overpriced products that you wish you did not own. One of the biggest myths about MLM’s is that your building a real business.
Unlike building a real business like with an affiliate website about your own interests where you own it and are creating a brand and a following, in MLM’s you’re just constantly trying to get people in your downline and order in products yourself every month. This is just so you can stay a part of the MLM and their compensation plan.
You get super-duper neat titles like double diamond, emerald or ruby member level etc. All these levels and names mean nothing and are just there to distract you from what you really are, which is just another space in the huge pyramid.
This serves only the top members and the owners as the top block is always supported and that is why the owners of the companies are making millions, while the struggling recruiter at the bottom barely makes enough to support just the costs of being a member in the pyramid.
What About The FTC, They Will Come In And Save The Day… Won’t They?
The FTC actually does not seem like they’re going to be doing too much about Network Marketing companies any time soon, so you just have to know what to look out for.
At least once you figure out what to look for spotting an MLM/network marketing business will be as easy as pointing out a red stain on a white shirt.
Some Try To Blur The Lines Of An Affiliate Business And Network Marketing And They’re Not Even Close.
MLM’s are absolutely nothing like Affiliate Marketing. Affiliate Marketing gives you the control and power to promote whatever products you want within any niche and is typically the gateway to selling your own product or services.
Network Marketing locks you into putting all your eggs in one basket. With MLM’s you don’t have the best intentions for your audience as you’re always required to recruit and sell others the same overpriced garbage that is typically untested and unnecessary.
Affiliate Marketing is simply promoting products for businesses with a website that you own. This is not promoting an opportunity with overpriced garbage products hidden inside a bunch of hype and confusion.
So basically if you’re promoting a product to others then you’re an affiliate. If you’re recruiting people into your downline and have to pay monthly dues and fees and buy in products every month, then you’re involved in a network marketing scam and should cut bait and run the other way.
So Is Network Marketing A Scam? Well only a very small few get positioned lucky enough and basically win the lottery as the odds are about that good and when they do they show them to everyone so people believe it is possible for them but it’s just like looking at lottery winners or casino gamblers and thinking “If they can do it so can I.”
This business is more about timing and luck then it is about hard work and skill, this is the myth that MLM owners do not want you to know.
They always blame the person that joined for not working hard enough but never find fault or blame in the system that led them there. Just be careful that you don’t “get hooked on MLM” as when your “on MLM” you just do not think clearly.
Well I will say flat-out that the network marketing business is a scam in my opinion and if you do not want to lose years of your time and loads of your money I would stay away from them.
MLM’s are really just a small percentage of people who are at the top.
Once just a few fake positive testimonials surface that is all the proof some need to go jump in with both feet. There will always be someone at the top making good money and showing the others, typically friends of the owners or close acquaintances.
These “Triple Platinum Double Dickydoo members” all serve a purpose, just like showing the winner of the lottery or winners in casinos. The same goes for the people who get sucked into the myriad of Pyramid/Ponzi/MLM schemes that are out there.
It looks like a lot of winners when you see them lined up, so you think that you could be one of them when really, 100 times more people are failing losing money or barely breaking even, 99% to be exact. if you saw those statistics you would not want to join.
Dedicated motivated members of MLM’s don’t typically question their purchases and often times become defensive of them because nobody wants to feel like they have made a stupid decision.
Unfortunately MLM’s as far as I have seen always are a bad decision and it takes a lot of losses and a lot of time before people eventually wake up to it.
So when faced with a person who wont stop hounding you about an MLM opportunity ask them a couple of hard questions.
Some More Indicators
OK….OK….OK I Just Want To Say I Don’t Think People That Join The Network Marketing Business Are Bad
Some people just don’t see Network Marketing as a scam no matter what you say and I’m fine with that. I just want to educated others who may be stuck and have not thought about it through a different perspective.
This could possibly help someone out there save some money and put it towards building a much more solid business, like owning your own affiliate marketing websites.
The MLM system turns people into defensive and typically angry distributors that act much like a person selling typewriters in a computer age saying the internet is a joke but deep down inside they know they made a mistake, they just do not want to admit it. They already went all in and they’re in too deep.
With Network Marketing unless you want to scam people you start to find out that the struggle is not really worth the payoff that you get. If you think about the statistics of around 95% of people who join Network Marketing fail.
They fail due to constantly having to sign up and recruit new members and baby sit a downline, and not just selling a quality product that people want and promoting things that you and others are already interested in, like with affiliate marketing. Products from Network Marketing companies are not even quality enough to sell by themselves typically.
Interested In Actually Running Your Own Full Time Business Doing REAL Affiliate Marketing & Not MLM Marketing???
Please Let Me Know What You Think
I may seem like a A$$h*!# but I’m really not that bad… I’m willing to entertain all comments, questions and suggestions you may have in the comment section. I know everyone has an opinion to share. I welcome all different points of view.
So what do you think about Network Marketing?
Do you feel it’s a scam or a legitimate business and why?
Please add your two cents in the comments below.
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