MLM Misrepresentations & the Truth behind them

[jong_deleon]

MLM misrepresentation: MLM is the best option for owning your own business and attaining real economic independence.

The truth: MLM is not self-employment. 'Owning' an MLM distributorship is an illusion. Some MLM companies forbid distributors from carrying additional lines. Most MLM contracts make termination of the distributorship easy and immediate for the company. Short of termination, downlines can be taken away with a variety of means. Participation requires rigid adherence to the 'duplication' model, not independence and individuality. MLM distributors are not entrepreneurs but joiners in a complex hierarchical system over which they have little control.

[daniellejune]

What is the point in your topic?

nosebleed.. pde paki summarize ^_^.v..

[jong_deleon]

MLM is the direct descendant of classic, no-product pyramid schemes. With expansive pay plans and an endless chain of recruitment, MLM assumes both infinite and virgin markets – neither of which exists. MLM is therefore inherently flawed, uneconomic and deceptive.

MLM IS A LITANY OF MISREPRESENTATIONS!

[jong_deleon]

SUMMARY

MLM (multi-level marketing, network marketing, chain selling, product-based pyramid schemes, etc.) is a system that depends upon recruitment of an endless chain of new distributors to replace a continuously collapsing base of new participants in a pyramid of recruits. As such, it constitutes an endless chain scheme of marketing by recruitment of distributors as primary customers. It is a pseudo-business with no significant customer base and is dependent on a large network of distributors, approximately 99% of whom lose money from investing in products and services (including “success tools”) offered by the sponsoring MLM company - as well as normal operating expenses. The extremely high loss rate and aggregate losses make recruiting MLM’s, or product-based pyramid schemes, the worst of all types of pyramid schemes.

Thus, recruiting MLM’s are inherently flawed systems that promise ongoing residual income, but deliver very little except financial loss at the least, and loss of treasured relationships and values of honesty and integrity at the worst. They maintain themselves by continuous recruitment of new recruits, as investing participants give up or run out of funds and leave the system, seldom understanding what happened to them – even blaming themselves for their “failure”. Victims of MLM programs are seldom aware enough to file complaints with authorities and often fear consequences from or to those they recruited, so law enforcement rarely takes action.

To be successful in a recruiting MLM, one must first be deceived, then maintain a high level of self-deception, and finally go about deceiving others. They must also be in a state of denial about the losses suffered by the "downline" they recruited. Some would label this "theft by deception", except that few of those doing the deceiving are aware that they are deceiving and defrauding those they are recruiting. They may even put on a display of being "successful" by buying expensive cars and homes and inviting others to be like them. The SYSTEM is the culprit.

[calfism]

I understand you..stop crying na, Quitters only fail in MLM.

[jong_deleon]

Calfism - definitely not an entrepreneur. A con man, shill or a mark? Doesn't matter anyway... Here's more for you..

MLM misrepresentation: If you don't succeed, it is because you don't really BELIEVE in our system and what it can do for you. You attitude is all important - you attract what you really believe in. Think success, and you will be successful.

The truth: This idea that our success is determined by our attitude or belief system is a nice platitude and does have some applications, but only when doing something that has validity. Those at the bottom of the pyramid are “Believers,” and those at the top are “Supreme Believers.”

[jong_deleon]

“MLM has a 97% fail rate.” “Only 5% of people make any money in MLM.” “Only 10% of those who do network marketing achieve their goals.”

These kinds of statistics are thrown out all over the Internet and cited at MLM opportunity meetings. Almost none of them have any serious research to back up their figures. The reason this is important issue is that the inverse of loss rate is success rate. Actually, the loss rate is far worse than even MLM insiders suspect or admit to.

[cyberglen]

hello sir jong deleon.. i think po depende po sa product po.. sir thank you for this insight.. pero sir, i will ask anu po ba masabi mo about unigosyo (www.unigosyo.com).. thank you po.. para malamn ko po how much effort i need.. thank you po..

[jong_deleon]

Built on an endless chain of recruitment, MLM assumes both infinite and virgin markets, neither of which exists in the real world.

MLM is therefore inherently flawed, deceptive, and profitable only for founders and those at or near the top of a pyramid of participants – usually those at the beginning of the chain of recruitment. MLM is also extremely viral and predatory.

[audreygar86]

Nice posts! This is really a big help especially to people planning or considering to join a MLM company.

MLM recruiters can become very aggressive and persuasive in their recruitment. For most potential recruits, they have no time to make an informed decision because they only here the side of the recruiters. I hope that through this, those who plan or consider joining a MLM company will be able to see the other side of the coin.

[GF2bluz]

Here's a new one:

[jong_deleon]

MLMs claim to “bypass the middle man,” when in fact with their endless chain of recruitment, they create thousands of middle men – all hoping for a share of commissions!

[kimerran]

have you personally tried joining MLM business?

[paul3306]

this jong_deleon guy really hates MLM so much, cant blame him though, after all he is right on some points.

MLMs claim to “bypass the middle man,” when in fact with their endless chain of recruitment, they create thousands of middle men – all hoping for a share of commissions!
this is true

Built on an endless chain of recruitment, MLM assumes both infinite and virgin markets, neither of which exists in the real world.
absolutely right

“MLM has a 97% fail rate.” “Only 5% of people make any money in MLM.” “Only 10% of those who do network marketing achieve their goals.”
i dont know about the exact number, but id say about 97-99percent fails, probably about 40-50% makes some money (1 peso is money) 10% achieve their goals, I'd say it depends on their goal.
some of my downlines goal is to make just a hundred pesos a week. (malaking tulong sa mahirap na buhay)
some just wants to make a couple thousand a month, pandagdag sa budget ng family.



MLM IS A LITANY OF MISREPRESENTATIONS!
i couldnt agree more, there are thousands of distributors who would scam people just for the sake of it.


The truth: Fair? Most MLM compensation plans are weighted heavily towards those who got in early or scrambled to get to the top of a pyramid of participants. MLM is the epitome of an unfair and deceptive practice.
this is right too. only a small percentage would really qualify for all the bonuses


The truth: Holding up top earners as examples of what others can do is deceptive.
this is also right, not everyone will make that 5-6 or even 7 digit mark.
potentially you can, if your country has about 99zillion population


here is whats also right, Philippines, being a third world country.
i dont think earning an extra 1 thousand pesos a month would hurt. sa hirap ng buhay dito. madami talagang magiging scammers, madaming magiging magnanakaw at magiging criminal. had you watched TV patrol lately. some "holdapers" admits the crime because they needed food to survive.

there are other opportunities available, (franchising, sales, service, buy and sell etc.) these are not all available to everyone. and so is MLM.

there are high end MLM company that has a 35k entry fee (dang) 35k, with that money in the philippines, i'd have a small food cart franchise down the street. and there are MLMs that are free (example: AVON, asialink etc...)
avon is not just direct selling, they will require you to build a network, so you can earn more

asialink is not just a bank, you can apply as a loan consultant and refer your friends to apply and be a loan consultants themselves, in the process , they became your downline, and when someone takes a loan from your friends, you as their upline earns a commission from that loan.

the Philippines is now a call center haven, but just like MLM, 95% of the call center agents wont reach their goals. they'll be working hard as well for a lousy 7-9k salary per cutoff.
there would be a hundred agents but there wuold only be 5-8 supervisor, and only 1 manager

IMO, earning a couple thousand from any business opportunity wont be bad.
I'm not sure if this jong_deleon is in the Philippines (or understands the situation of the "pinoys"
(BTW around 70% of pinoys concider themselves poor, infact more than 97% cannot afford to buy a brand new car, and almost everyone who is employed earns just enough to make it till their next payday)

but i would agree and disagree with jong_deleon
P.S.
for all we know he may just be so bitter about MLM because someone scammed him or something.
all businesses (not just MLM) vary depending on how you look at it

[jong_deleon]

Only few people have the sophistication to identify the features in the compensation plan that assure the money goes mostly to top-of-the-pyramid participants and that the company coffers are enriched at the expense of a continual supply of new recruits who buy products to attempt to move forward, only to quit and be replaced by others who are similarly misled.

[jong_deleon]

The truth about these scams needs to be presented as an antidote for the lies of illusive riches which only appeal to ones baser nature. I feel these scams harm financially, relationally and morally to individuals and society as a whole. It seems the cancer is growing and spreading to developing world which can ill afford to slow their economic progress.

[jong_deleon]

The very people who are being victimized are often its promoters – until they run out of money and quit. They seldom complain to regulators, having been taught that any failure is their fault. They may also fear self-incrimination for their own recruiting efforts – or retaliation from or to their upline or downline, which may include close friends and relatives.

[jong_deleon]

Some MLM proponents argue that if it were a pyramid scheme, the programs would be destined to collapse. While this may be true for classic, no-product schemes, MLM promoters have found ways to survive and even grow. They do so by constant recruitment of new recruits to replace those dropping out, a process called churning. They move to new areas to start the process all over again - a technique that I call "re-pyramiding." So they don't collapse, but are in a state of continuous collapse - or churning through a revolving door of new recruits.

The more resourceful MLMs survive for years and even decades by doing the following:

* hugely rewarding top recruiters for constant recruitment of purchasing participants to replace those who dropped out,
* duping law enforcement, media, and consumers about the MLM's legitimacy,
* requiring ongoing (subscription) investments by participants to qualify for commissions and advancement in the pay plan,
* recycling through new markets or countries and then with new product offerings,
* feigning compliance with “retail rules” and by staying below the radar of law enforcement ,
* convincing victims that failure is their “fault,”
* and by a host of other deceptive and creative measures.

Thus, MLMs, or product-based pyramid schemes, are able to continue indefinitely where no-product pyramid schemes soon collapse.

[jong_deleon]

Most MLM companies sell “potions and lotions” with little scientific evidence supporting their claims that they will cure or prevent nearly every disease under the sun. Actually, some MLM products are very good, but the emphasis on the “great products” offered by MLMs is often merely a diversion from a flawed business model and a ruse for getting people involved in the chain of recruitment. And if you are gullible enough to be a "customer" and pay the premium prices charged by these MLMs, you are more likely to be fattening the wallets of those at the top of the MLM recruitment chain than you are to be benefiting yourself.

[jong_deleon]

Ways YOU Can Make more Money* than in MLM/Network Marketing (at least a profit)

*With the possible exception of those at or near the top of a pyramidal hierarchy of tens of thousands of participants – or at the beginning of an endless chain of participants

Some people who get into MLM want to make more money, to secure a more “passive” or “residual” income, or to have more independence or freedom to use their talents than a typical job offers. Many people just need the extra income to support a family, pay for an education, etc. MLM/network marketing is appealing for many reasons. But is MLM the only game in town? Are there better alternatives than MLM/network marketing to meet these varied needs?

For many individuals, nothing in their experience promises so much for so little investment as MLM (multi-level marketing). For a variety of reasons, people needing income seek alternatives to the standard job market. I believe that many people are drawn into MLM simply because they have been approached by someone – and are unaware of the vast array of other income opportunities that are available to them outside the standard job market. These are explored below and in the pages linked at the bottom.

For starters, read the general options listed below. Then read some time-tested guidelines for anyone seeking to start or buy a new business.

To see why we can safely say that so many income opportunities beat the odds of profiting in MLM/network marketing , read on.

Experienced entrepreneurs know that the best opportunities don’t come seeking you – you must search them out. In doing so, consider not only your interests and passions, but also what you have to offer in skills, natural talents, certification, and how these factors fit with real needs in the marketplace. Books on small business opportunities are full of write-ups of the latest “hot” businesses of the 90’s. And small business “opportunity” web sites abound. But you will have to research them for yourself. A detailed discussion of the thousands of income options would require a massive research team many years to process – and it would never be finished because entrepreneurs are dreaming up new businesses daily.

Below are some categorical alternatives to the standard job market, which are fairly easy to get into, even from home. Some require a modest investment, and some require specialized training or licenses.

Computer services. Anyone who is technically proficient and willing to do some market research can usually find a niche that can be filled in this growing and futuristic field. Hundreds of opportunities present themselves to programmers, systems engineers, networking experts, repair and upgrade specialists – you name it. And of course, anyone can do data entry or word processing from home.

Internet sales and services. The Internet opened up the world to entrepreneurs and home workers like nothing before. Online clearing houses of information, specialized product outlets, auctions, and you-name-it are exploding on the Web. It really pays to gain expertise in web technology and resources –coupled with whatever specialized field interests you.

Home manufacturing. If you have developed a product that can be manufactured from home, such as clothing or gift items, calls to prospective retail outlets or attendance at a gift or craft show may get you started in business.
Agriculture-related. Resourceful growers specialize in niche markets overlooked by major farmers and ranchers, such as mushrooms, exotic fruits, organically grown vegetables, or unusual plants and flowers. Some start in back yards and grow to sizable businesses.

Repair and maintenance. While we are moving towards an increasingly high-tech society, persons who are skilled in keeping our computers and other gadgets in working order will always be in demand. Also, more routine maintenance of homes, yards, vehicles, and equipment will always be needed.
Teaching and consulting. Anyone who can teach skills or useful information on virtually any subject can sell that information in a variety of formats. Also, experts in a variety of fields offer consulting services on a fee basis. Many teachers and consultants leverage their time by teaching classes or consulting in groups.

Insurance. This field is particularly good for persons who want the independence of working their own hours—often from their homes. Successful insurance agents or brokers build up enough commissions from renewals year after year to provide a base of income much more secure than a salaried job can offer.

Real estate. While you can work from home, agents are always on call, since buyers tend to look when they are in the mood. The income of agents fluctuates widely, since they are essentially “unemployed” between sales. So two or three major commissions in one month may be followed b y no commissions for a couple of months. But hard work and persistence can fill the pipeline of prospects and even out the income stream considerably.

Other agency/broker/finder arrangements. Arrangements vary all over the map, but usually involve representing a company or a client for a fee or commission. Examples would include management search firms, travel agencies, domestic help agencies, collection agencies, contractor referrals, investigative services, and temporary help agencies.

Manufacturers representative. This is a person who can represent manufacturers to prospective retailers and can draw commissions for repeat business from the same customers year after year. Print sales reps also work this way.

Miscellaneous independent sales arrangements. Anyone who can learn to sell will always have work opportunities, regardless of economic class, race, education, age, or sex. The classified ads sections of newspapers are full of ads for people to sell a variety of goods and services. True, many are not very solid and most are for commissions only, but if you talk to enough of them, you might find something that appeals to you. Many sales people work successfully from their homes.

Telemarketing. This field has been dealt a major setback with recent FTC restrictions, but there are still pockets of opportunity within the new rules. But be careful – telemarketing scams abound. So programs sponsored by others, including fund-raising promoters, should be checked out very carefully.

Writing and other creative freelancing. Good writers, artists, and others with creative skills often work at home on a free-lance basis. Not only must you work on your writing skills, but you must develop marketing savvy and nourish contacts that will be vital to your success.

Mail order. Many people are more comfortable buying through the mail than going down to a busy shopping center. Mail order is a lot like fishing – you send out flyers or catalogs and wait to see who will bite. If your returns are good, you use the same bait. Otherwise, you try something else until you find what works. A big advantage of mail order is that it can be operated from home, and the whole family can be involved.

Internet marketing. With the rapid growth of web-based products and services, many are now earning a full-time income selling on the Internet. Ebay is a particularly popular web site for buying and selling products of all types. And with a little research online, one can find other avenues of niche marketing of specialized items on the Web.

Importing and exporting. Anyone who likes to travel (and preferably speaks a foreign language) can find opportunities to bring products to and from the United States or other countries. This field promises to grow in the coming years as we move towards a world economy.

Job, career, and entrepreneurial services. Frequent layoffs, corporate downsizing, and the move toward temporary hiring and contract work have created new opportunities for some. These include career consultants, outplacement centers, self-marketing coaches, temporary help agencies, resume services, re-training centers, executive and technical search firms and clearinghouses, and services for entrepreneurs.

Child or adult day care. With the growth in number of mothers in the workforce, the demand remains high for day care services. And with the increase in the aging population, adult day care services and home health care is on the rise.

Construction. Persons skilled in a variety of building trades can usually find work on a subcontract basis. Some go on to become general contractors and coordinate the work of many subcontractors to complete both major and minor projects.

Franchisee or franchiser. Any of a large variety of products and services are offered on a franchise basis. Franchises offer an increased likelihood of success because the franchise package has been proven elsewhere, often in hundreds of places. If you are resourceful enough to develop a successful business that could be duplicated elsewhere, such as a novel restaurant, you can package it and franchise it to others.

Buying an existing business. This option removes a great deal of uncertainty for inexperienced persons seeking to get into a business of their own. Sometimes the seller will stay with the buyer long enough to train the buyer thoroughly in all aspects of the business, substantially reducing the risk of failure.

Other. Our list of income alternatives could go on and on – wholesaling and retailing, vending machines and services, pet care and grooming, health care and other professional services, advertising and public relations, catering, decorating, etc.

Actually, your odds are far better gambling in casinos – and without squandering your social capital!