MLM, Trick or Treat?

Many folks want to insulate themselves from the low wages and insecurity of employment that is “at will.” Some people want to do this in a way that gives them the most freedom and income while minimizing some of the negatives of working for someone else. Further still are enterprising individuals with no original idea or invention. They may not even have a product or service that has been vetted to sell. But they still want to work for themselves.

The multi-level marketing entrepreneur enters the scene. It could be a family member, friend or acquaintance. They may whisper to you about how they can help you find a “great opportunity.” For me, this has happened on more than one occasion after I have asked for introductions to hiring managers or positions at companies where I would like to work.

You may know the spiel. All you have to do is buy the introductory salesman package of some juice, pill, shake or doodad then you will be well on your way to making tens of thousands (or even hundreds of thousands) of dollars a year…simply by introducing the great product/service to the people in your circle. The MLMs I remember the most are: the negative ion mats, Melaleuca, MonaVie, and Pampered Chef (bigger list is here). There may be others but let’s press on shall we?

When are participate in multi-level marketing or direct marketing you are tasked to approach everyone you know and tell them about this great fill in the blank and convince them to be part of your down line. All this person has to do is buy in and get their own down line and so on and so on (Remember the Faberge commercial?) The trick with any MLM is to get in early because even though it is legal, it seems to exhibit similarities to a Ponzi (pyramid) scheme which is illegal.

Mlm-piramide-nl

Some of the latest MLMs are smart credit cards that earn you travel rewards just by “buying what you already buy”. Often these MLMs are operating so close to the fringe of legality, class action lawsuits are grow out of the seed of deceit. For example, LuLaroe is on the chopping block as the latest “MLM” to join the ranks of alleged scammer. LuLaroe allegedly told their distributers to carry $20,000 of inventory. Distributors of LuLaroe also [allegedly] told to leverage pretty much everything they had. This makes me wonder how all these women were suckered into this “business model.” How is it that grown fully developed humans fall into such a fallacy?

Some MLMs are legit (meaning legal but not necessarily money makers). Some MLMers get offended when I tell them I do not like the business model and that I am not interested. Some of them then shift to the seedy used car salesman persona…trying to overcome the objection to such an extent that I must forego my concern for their feelings and release my verbal restraint.

Are MLMs a trick or a treat? I can tell you that the track record is not particularly favorable. Direct sales in general are legal. MLMs are legal in general. But it is hard work with long hours spent on prospecting. Wouldn’t you rather be spending that time selling your idea, product or service?


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