Why Is MLM So Hated?

[Jerimi]

Speaking of this... The FTC is adjusting its rules here in the US well proposing to - in order to crack down on this stuff. Im not normally one who favors heavy regulation, but this is an area where I feel more regulation would do very well. Too many people are taken advantage of.

The rule among other things would :


Create new definitions of “business opportunity,” “business assistance” and “earnings claim"

Require that a detailed “disclosure statement” be given at least seven days before any prospective purchaser signs a contract or makes payment to the business assistance provider;

Require that the business opportunity “disclosure statement” include information such as previous lawsuits, the number of previous purchasers who have canceled within two years and a list of “references” i.e., purchasers of the opportunity in the previous three years;

Require business opportunity sellers who make earnings claims to provide an additional “Earnings Claim Statement” to prospective purchasers, which would include extensive earnings disclosures that would need to be frequently updated.

---

The full rule
http://www.ftc.gov/os/2006/04/R51199...Rulemaking.pdf

MLM Companies seem angry about this. I find it strange they feel a seven day waiting period will ruin someones enthusiasm (see link below). I mean anything I thought was a great idea, was still a great idea a week later. Unless I was being hard sold something that actually wasnt. I also would think that they would be excited to share proof of earnings!

http://www.mydswa.org/FTC.asp

[lisa1979]

With some mlm company's they even offer a 14 day money back trial. Imagine all the signups I had before the massive euromillion rollover last year, what a team to take a trial offer!

Lisa

[chadwick]

IMO- MLM yeah, it is a cheap first taste into the business world. I don't know one person who really "made it". I know many claiming they were and within 2 years after swearing by the long distance, the health products, the _____. They were doing something else. MLM is like a church, someone at the top makes the most!!!

I disagree entirely with you. This could have a lot to do with your own personal experience and perception of network marketing. There are a lot of people and especially "young people" who get very excited about a certain product and MLM business but they are usually lacking when it comes to putting the effort required to succeed. I know this because most of my friends are idiots when it comes to business -- but I love them to death as friends. Now it's true that a lot companies don't offer a viable way for the average person to make it, but to make blanket statements and disregard MLM as a legitimate way to do business is just downright irresponsible.

MLM has been able to afford me in months what a traditional JOB (Just Over Broke) would NEVER be able to offer me. It has also done the same for many people in my downline. The key is working hard, some people aren't willing to do what it takes to make it. But regardless of what people think, MLM owns every other form of business.

[JesseLear]

lol wow, and I thought the young entrepreneur crowd was more open minded than this.

You guys have got me crackin up over here.

Most mlm's are NOT scams. An mlm company is simply a company that has decided to market their products via a less expensive, more effective method. Word of mouth is the most effective way to advertise, and mlm companies know that. Most mlm companies are not little get-rich-quick schemes started by a couple of greedy guys. They are just like any other company...they have a product or service to market, and they chose a unique way to do it.

Look up some of the popular mlm's...if you've heard of it, it's probably in the better business bureau, popular business magazines, and even listed on the stock exchange. The company I work with is.

Even Rich Dad/Poor Dad author Robert Kiyosaki promotes the industry. How many of you would argue with him? Put "Robert Kiyosaki perfect business" in Google....he recently released an audio CD encouraging people to get involved with direct selling/mlm called The Perfect Business.

The reason a lot of people don't like mlm is because there are so many ignorant schmucks out there on the net and everywhere else giving you hyped up promises like "join my mlm and become a millionaire by tomorrow night with no work and no financial investment." Then other ignorant schmucks fall for it and join, and when they don't become a millionaire by tomorrow night with no work and no financial investment, guess what? They run around with their pathetic tails tucked between their legs screaming MLM IS A SCAM!!! This is what gives some people a bad impression of the mlm industry. Network marketing/mlm is a BUSINESS. And if you work an mlm business as hard as you would a traditional business, you WILL succeed. It's just that 99% of network marketers DON'T treat their business like a real business. They make a call here and there, talk to 1 or 2 people a week, go to a meeting, read a few self-help books, then quit and swear never to do mlm again.

If you bash mlm, either you're one of these people I described above, or else you haven't done your homework. Which is it?

So...who am I to talk? I'm a 19 year old college kid and I've ran network marketing businesses since I was 15. I'm no "guy at the top". I don't even know anyone who's anywhere near "the top". I have no experience, no big database of contacts, and nobody holding my hand. Yet my MLM business is paying for my 26K/year college education. It's paying for me to study abroad in Ireland next spring. It's paying for me to move to the San Diego beachfront when I graduate. It's allowing me to prevent my future spouse and family from ever having to worry about paying bills or having enough to eat. It's allowing me to pay for my parents to receive proper health care when they're old and can't work anymore. It's allowing me to give money and time to worthy causes. And it's allowing me to improve the health and financial situations of people I know and love...in several states, all around the US.

So if you're going to argue with me about the legitimacy of MLM, you'd better be able to back your shit up, because I can.

Get the facts, man. Don't be naive.

And those of you running an mlm business? No matter what, always assume that people are going to love the idea of your business. The people who have negative perceptions of the industry are usually the kind of people who can be swayed by any kind of "peer pressure". If you tell them about it with sincerity and complete confidence, a lot of them wont' even attach those negative connotations they've heard to what you're telling them.

And if they do, and aren't willing to keep an open mind, they aren't worth your time. NEXT!

__________________________________________________ ___-

6 Figures by Age 23? See how I'm doing it: http://www.jesselear.com

While you're here, check out my latest project! Young Wealth Weekly is a cool, revolutionary e-zine with practical tips for young entrepreneurs. Subscribe now for free at http://www.youngwealthweekly.com.

[myorganicfamily]

I am just curious .. I got alot to speak about on this subject but seems most of this board hates the idea of Network Marketing and MLM.

So I want to raise a discussion on MLM.

Good or bad, everyone give me your thoughts and opinions on it.

---
MLM has its good & bad like any other business in this world.
It's what ONE CHOOSES to do with one's life is what's IMPORTANT.

The industry has changed enough in recent years to be worth a second look. What used to be a fly-by-night business of scammers now boasts a fair share of publically traded multinational giants and well-established privatly held companies with revenues in the billions. As a result, direct selling now deserves serious consideration as a possible way to create a second, home based income stream for yourself.

Direct Selling is...

Direct selling, network marketing, multilevel marketin, party-plan marketing, and one-to-one marketing are all variations of the same theme. Direct selling is the sale of a consumer product or service, person to person away from a fixed retail location. Generally speaking, the person doing the selling is an independent contractor.

In addition to selling your product, you also recruit others to sell products for you. These so-called "downstream" distributors pay you a percentage of their sales - just as you pay a percentage of your sales upstream to the person who recruited you. The idea is to recruit so many people that an increasing amount of your income comes from their efforts, not your own. Indeed, in network and multilevel marketing, recruiting others is often a primary point of business.

The reason you recruit othere is so that you can earn passive income from their sales and obtain new customers for your products or services. In truth, the best passive income in direct selling or network marketing comes from satisfied customers reordering products or services you previously sold to them. If the entire business is focused on the recruitment of more sales representatives - and NOT on the selling or consumption of services or products - something is amiss.

What Direct Selling is NOT!

-not about getting you to buy a ton of products up front - which is pyramiding and is illegal.
-not a get-rich-quick business.
-not expensive to get into. (usually less than $300)
-not for the lazy.
-it's not necessarily about roping in your family and friends. If your supplier seems to focus more on getting you to recruit buddies and relatives rather than on sellling and introducing the quality products or services it is providing, you're in the wrong company.

...
Ryan
MyOrganicFamily.com
ONE Group, Independent Representative

[Aletheides]

Let's look at MLM companies from an owners perspective....MLM companies are great to OWN because:

1. All selling is done by the members. This means reduced advertising costs for your MLM company, but the products still get sold. What a great combination.

2. The typical overhead of recruiting and training employees is non-existent. Like selling, the members do this for you, too. No costly middle level managers here!

3. You only pay your employees when they make sales. If you don't make money, they don't make money. Great deal!

4. Oh yea, don't forget the $300.00 start up fee!! Wa-hoo! (When was the last time you were hired at a new job and they asked you to pay them?)

MLM companies are not smart to work for because:

1. The MLM companies get all of the great benefits listed above and then some. What do they give you? The short end of the stick: Weak compensation.

Conclusion: If you are thinking about joining an MLM, don't. Go start your own biz. Remember, companies exist to make big profits. When you work for a company you can be sure they are getting a better return on your time than you are.

[BOG]

MLM always crumbles. Some 3rd world countries have tried to run their economy on it and it crushed everyone.

[AGEL4U]

You know, I have to say...

With all the illegal pyramid schemes, money games and get-rich-quick scams out there, I'm not surprised that so many people feel the way they do about Network Marketing. AND, I can tell you... those that feel that way about it, do so because they got involved in one of the above at some point, without realising what they got involved in at first... and of course, became yet another casualty of MLM.

On the other hand, there are many legitimate and great MLM companies out there, without a doubt (Robert Kiyosaki and Warren Buffett aren't stupid)! But, there are those that also got involved in one of these companies, but due to lack of support and lack of SYSTEMS... they had no hope of success! The result? More casualties!

What makes the perfect MLM? There are a number of factors to look for... Great products, Well funded company, Experienced Executive team, Great Compensation Plan, SYSTEMS that are second to none, great mentoring and support... and if you can find one that is in its Early stages (but well funded)... you're on your way! And that's what I found with AGEL.

But hey! It ain't for everyone! Can we just agree with that... and leave it at that!

That's MLM in a nutshell. I don't expect everyone to agree. Just those with big dreams and the drive to make a difference in their lives and those of their families.

JD

[chadwick]

lol wow, and I thought the young entrepreneur crowd was more open minded than this.

You guys have got me crackin up over here.

Most mlm's are NOT scams. An mlm company is simply a company that has decided to market their products via a less expensive, more effective method. Word of mouth is the most effective way to advertise, and mlm companies know that. Most mlm companies are not little get-rich-quick schemes started by a couple of greedy guys. They are just like any other company...they have a product or service to market, and they chose a unique way to do it.

Look up some of the popular mlm's...if you've heard of it, it's probably in the better business bureau, popular business magazines, and even listed on the stock exchange. The company I work with is.

Even Rich Dad/Poor Dad author Robert Kiyosaki promotes the industry. How many of you would argue with him? Put "Robert Kiyosaki perfect business" in Google....he recently released an audio CD encouraging people to get involved with direct selling/mlm called The Perfect Business.

The reason a lot of people don't like mlm is because there are so many ignorant schmucks out there on the net and everywhere else giving you hyped up promises like "join my mlm and become a millionaire by tomorrow night with no work and no financial investment." Then other ignorant schmucks fall for it and join, and when they don't become a millionaire by tomorrow night with no work and no financial investment, guess what? They run around with their pathetic tails tucked between their legs screaming MLM IS A SCAM!!! This is what gives some people a bad impression of the mlm industry. Network marketing/mlm is a BUSINESS. And if you work an mlm business as hard as you would a traditional business, you WILL succeed. It's just that 99% of network marketers DON'T treat their business like a real business. They make a call here and there, talk to 1 or 2 people a week, go to a meeting, read a few self-help books, then quit and swear never to do mlm again.

If you bash mlm, either you're one of these people I described above, or else you haven't done your homework. Which is it?

So...who am I to talk? I'm a 19 year old college kid and I've ran network marketing businesses since I was 15. I'm no "guy at the top". I don't even know anyone who's anywhere near "the top". I have no experience, no big database of contacts, and nobody holding my hand. Yet my MLM business is paying for my 26K/year college education. It's paying for me to study abroad in Ireland next spring. It's paying for me to move to the San Diego beachfront when I graduate. It's allowing me to prevent my future spouse and family from ever having to worry about paying bills or having enough to eat. It's allowing me to pay for my parents to receive proper health care when they're old and can't work anymore. It's allowing me to give money and time to worthy causes. And it's allowing me to improve the health and financial situations of people I know and love...in several states, all around the US.

So if you're going to argue with me about the legitimacy of MLM, you'd better be able to back your shit up, because I can.

Get the facts, man. Don't be naive.

And those of you running an mlm business? No matter what, always assume that people are going to love the idea of your business. The people who have negative perceptions of the industry are usually the kind of people who can be swayed by any kind of "peer pressure". If you tell them about it with sincerity and complete confidence, a lot of them wont' even attach those negative connotations they've heard to what you're telling them.

And if they do, and aren't willing to keep an open mind, they aren't worth your time. NEXT!

__________________________________________________ ___-

6 Figures by Age 23? See how I'm doing it: http://www.jesselear.com

While you're here, check out my latest project! Young Wealth Weekly is a cool, revolutionary e-zine with practical tips for young entrepreneurs. Subscribe now for free at http://www.youngwealthweekly.com.

Awesome post Jesse! I couldn't agree more!

[MpyreDzirez]

Wow what a great post jesse. I'd like to throw in my two cents.

Everyone is throwing around terms like network marketing, mlm, and pyramid like they are all the same.

Robert Kiyosaki endorses Network Marketing not necessarily MLM's.

MLM is a "form" of network marketing. (the most failed form)

MLM means Multi-Level-Marketing...usually depending mostly on sponsoring many others yourself - to do a minimum effort.

Network Marketing is the act of building relationships, selling a product so good it can move on word of mouth alone, and teaching others how to do what you do. So that you don't have to spend your time recruiting people. (which is not financially rewarding)

There is no business or society that does not fit the description of a pyramid ranking or architecture system. (EVERY business is a pyramid "scheme")

If you have a disrespect for the Network Marketing Industry, you have not researched it and should not be allowed to further impune a Trillion dollar industry.

Everyone loves the word FRANCHISE. Although franchising is just a stronger regulated, more popular, and more expensive form of Network Marketing.

If you can't take a strong run at Network Marketing, you are not the type that will ever make it huge in any form of business. (If you think that, that is not true, you have either not done your research or you are that person that will never make it huge because you make excuses and cannot persevere)

If you are serious about business, I urge you to research the network marketing industry, just research it. Any true business man could not possibly knock the power of true network marketing.

When its all said and done its not the industry everyone is mad at. It is the lack of initial research before the venture, and then you get a payplan you were not ready for. All because you forgot the first step of business..."Do Your Research" Any business would fail if you never researched or learned about what you were doing! like duh...hehe

I am currently running a blend of both a Network Marketing system and a Traditional business. One compliments the other and vice versa. I am able to offer 10 times the service of another company my size because I alligned myself with a much more superior service and network.


I am an experienced, well researched, faithful business man who uses the power of network marketing on a daily basis. So I am allowed to say if you're in an MLM (defined above) start researching other payplans or you better be one insanely disciplined individual.

[New billionaire]

Make sense.

[itime2]

Here's a great article that everyone should read about MLM. It's written by Jon M. Taylor, PH.D President of the Consumer Awareness Intitute a non-profit corporation.

The highlights are below, but if you view the full report you'll see how well researched it is and that it's backed up by facts (including tax returns) and not based upon opinion.

Read the full report here
TOP TEN Things I Learned from Ten Years' Research on Network Marketing or MLM*

1. MLM promoters work hard to make their programs appear innocent, but most MLM’s result in loss rates exceeding 99%.

2. Almost all MLM’s are “recruiting MLM’s,” or product-based pyramid schemes.

3. A fair and profitable “retail MLM” would not look at all like the typical MLM.

4. Properly understood, even leading MLM’s are likely to be fraudulent and technically illegal.

5. MLM victims seldom file complaints – which contributes to the problem.

6. Law enforcement officials generally lack both the will and the resources to protect consumers by enforcing laws applying to MLM’s.

7. MLM promoters are very clever at rationalizing MLM fraud, even to themselves.

8. The villain in MLM abuse is the compensation and recruitment system – or “system fraud.”

9. Though most are scams, MLM’s can display remarkable endurance – often expanding Ponzi-style to foreign countries to keep the chain of recruitment going.

10. MLM compensation plans reward recruiting over direct selling, and are therefore not legitimate direct sales programs, as they claim to be.

[New billionaire]

Good point itime2. MLM is really tough to work out nowadays.

[chadwick]

Success in any business capacity is tough. But some people prefer to blame an industry for their own incompetence.

[kozuch82]

I hate pyramid schemes and other crap. Its an abuse.