Multi-Level or Network Marketing

MLM stands for Multi-Level Marketing, also called Network Marketing. In the beginning they were a great idea. It gave a way for a small business to get their product out for little upfront money of their own or investing in expensive marketing, as MLM members took care of their own marketing. A number of people were actually able to make a decent income through these programs, but things changed. Today, people, namely people at the top of the so called network or corporation (pyramid) are the only ones making an income while many people near the bottom of this pyramid do not make enough to live on.

Let me first point out that these schemes or scams have never been made illegal, despite their abuses. These schemes will continue until people realize they are not what they promise and force legal changes, even making pyramid schemes illegal.

That said, Robert Kiyosaki (an author I do not recommend), author of 'Rich Dad, Poor Dad,' recommends Multi-Level or Network Marketing businesses as a strong step towards achieving financial freedom. But, be very careful of why some people make these claims as many are nothing more than pyramid schemes to be financially rewarding for the people at or near the top of the pyramid.

Here is what one website, Quatloos.com, and what is has to say about MLM's (this is not a direct quote as they have not given me permission to use their work):

Multi-Level or Network Marketing at one point was a legitimate form of business. It was a way for a new company with a unique products to reach farther than traditional forms of advertising. Today though and especially now with the Internet, these programs have become nothing more than money making schemes. There is no need for Multi-Level or Network Marketing (pyramid schemes) as online advertising is much cheaper and reaches more people than traditional forms of advertising, such as newspapers or magazines. Also, many of the products sold through these programs can be bogus or outright useless.

Many of the products sold through these types of programs are exceedingly overpriced and can often be found in local stores or online for much less money, even half or less than what these companies sell their items for. If you were to compare products, sometimes what is being sold through a Multi-Level or Network Marketing program is nothing more than maybe a slight reformulation or simple repackaging of the same product already found on the market. Take for instance a multi-vitamin. Some programs claim they sell the best available when in reality there are only a handful of vitamin manufacturers and many are exactly the same, only the product name and who sells it has changed.

Qualoos.com points out that these programs are nothing more than scams. These companies get you to sign up, pay a fee and have you continue to pay a monthly fee in order to collect a commission and earn an income. These programs are more about making money than the product itself. As a member you are required to sell more memberships if you would like to make back the money you have already, and continue, to spend. In many of the packages these programs send out strongly emphasize how much can be made by selling memberships rather than selling the product itself. Also, if someone were to search for similar products on the Internet would often find them for half to one third the price than sold by the Multi-Level or Network Marketer.

Many of the programs have come under the scrutiny of the Federal Trade Commission, FBI and other law enforcement agencies as questionable or even illegal. Some have even been shut down.

A Personal Experience

Over the years I have invested thousands of dollars in various MLM's, all ending up in failure, and not for the lack of trying. I was looking for companies who I could represent, selling their products, in order to make some a commission. But, that's how these companies work.

I would join a company, paying their upfront fee and agree to be charged monthly as a customer too. They would have a monthly requirement, volume, I had to buy in order to be considered qualified for an income.

The people who signed me up or the company itself, would talk a lot about the volume of money I could make if I sign up others underneath me, in pyramid format called levels. Mind you, this is not money that would be made from selling the companies product, but rather the money people signed up below me would be required to also pay on a monthly basis.

Selling the product to people outside the program, not interested in selling the products themselves, would make me very little income, and it was not reoccurring which they promoted very heavily. The volume levels were often also unrealistic, what one person or sometimes even two people could consume in a month. The companies answer, sell the extra or use it as a promotion to bring in other people into the program.

I learned very quickly that if I didn't buy the products sold at the required volume I wasn't going to make any money, even if I did sign up others underneath me. To make back what I had invested meant I had to sign up often more than a handful, often two handfuls, of new members. I have even been denied commission that was due me because my personal volume had slipped below their requirements.

Network or Multi-Level Marketing do not work for the vast majority of people. By the time you hear about a company it has already been around for some time and all the so called leaders have been placed near the top of this pyramid scheme to ensure they make as much money as possible.

If you do sign up, you become fully liable to every claim that is made through whatever marketing and advertising method you use. Also, many of these companies require that you buy their pre-printed material for distribution, which only ensures they make additional money off unsuspecting people. People who sign up will often find that markets are saturated and competition is very strong, leading some people to steal leads, or follow other unscrupulous methods.

By forcing you to do all your own marketing, you are spending your money and the only way to become successful is to act very quickly, push people hard to sign up under you and sign up as many people as possible, so you wont dig yourself into a deep hole of debt.

It is my personal point of view and opinion that you should never join a Multi-Level or Network Marketing company. They bleed you financially dry, until you either give up and quite and you just can't afford to buy their products any longer. For many people the profits people see barely pays for their own required volume and marketing efforts. These companies are over-hyped and should be condemned, made illegal as they are all pyramid schemes which exists to profit the people at the top of the pyramid scheme.

Some of these companies should not be put out of business, but rather be required to reorganize their business model. Memberships should cost much less or nothing at all, monthly purchase requirements need to be eliminated altogether and flat commissions paid on the products themselves. That way a person who signs up is actually able to make a real income without the pressure of signing up other members and the price of the product would come down dramatically. Also, the claims these companies make need to be realistic and honest, as some are extremely fantastic, such as with some health product claiming near miracles.

Some companies should be put out of businesses as the products they sell are scams and quite often worthless.

Don't join this type of company. You are better off either selling a product you made yourself with your own hand or someone else's which is trustworthy. At least then you know what you are selling and can honestly back it knowing you are not scamming anyone. This website covers a number businesses you can start at home, sometimes with little investment, and none of them are scams and you wont have to pay me an upfront fee to learn how to get started. (add link)

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