MLM Misrepresentations & the Truth behind them

[PlankingDonut]

If you aspire like the people in MLM who makes millions every pay cheque then that's not gonna happen. They say it's a copy business but not all opinions of other people can easily be answered.

If you're a true salesman, entrepreneur and a marketing specialist. Irregardless if you're on a Networking, binary or pyramiding scheme, you must know the product from A to Z. Technical stuffs and of course your sales pitch why do they need it. However, nsa customer pa rin un final say if they will buy or not. Pero wag ka nang mag aadlib, na kesyo magbbago buhay mo pag nag join ka, yayaman ka or something. Lahat **** tayo gusto umangat ang buhay at umasenso eh. Just make a good presentation how the product works and how the business works.

[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]

To be successful in MLM, one must not only work hard, but one must also –
1. Be deceived
2. Maintain a high level of self-deception
3. Go about deceiving others
4. Maintain denial of the harm done to those recruited into the chain or pyramid of participants.

[jong_deleon]

MLM Misrepresentation: MLM is a new way of life that offers happiness and fulfillment. It is a means to attain all the good things in life.

The truth: The most prominent motivating appeal of the MLM industry as shown in industry literature and presented at recruitment meetings is the crassest form of materialism.

Fortune 100 companies would blush at the excess of promises of wealth and luxury put forth by MLM solicitors. These promises are presented as the ticket to personal fulfillment. MLM's overreaching appeal to wealth and luxury conflicts with most people's true desire for meaningful and fulfilling work in something in which they have special talent or interest.

In short, the culture of this business side tracks many people from their personal values and desires to express their unique talents and aspirations.

[jnbetonio]

I dont know what to say...But I will agree on some points that in busniness you should be open minded, even if it contradicts what you always believe in...

jong_deleon, i want to thank you for the enlightening post. Yung debate about sa mlm, nagiging question na lang if u try i or not eh

[jong_deleon]

When I discovered how unfair, and deceptive this industry is and how few people – including regulators – understand the consequences of MLM participation, it seemed appropriate to challenge the industry and to provide guidance to prevent consumers from being victimized.

[jnbetonio]

@jong_deleon

based on your post, you are against the continious recruit of people in MLM, right? But what about the distribution of the goods? and let say, the products are in reasonable price? what are your opinions?

[jong_deleon]

MLM products can't have reasonable prices. Why?

Thousands of middlemen (and women).
If MLM were involved in standard retail markets, they would of course have to price products low enough to compete with the competition. In order to avoid operating as an illegal pyramid scheme, they need to sell most of their products to customers who are not involved in the network of participants. To do this, one would think that MLM products would be priced competitively. But typically they are not. So why not?

The obvious reason is that they must pay multiple levels of participants – far more than is the case in a standard retail market. So again, the claim by MLM promoters that they cut out the middleman is patently false. MLMs can create thousands of middlemen in the form of downline participants.

[jnbetonio]

how about those with e-loading products like vmobile and the like? It seems their products is profitable (well, minus the competition, that is)

[jong_deleon]

Each person recruited is empowered and given incentives to recruit other participants, who are empowered and motivated to recruit still other participants, etc. – in an endless chain of empowered and motivated recruiters recruiting recruiters – without regard to market saturation.

At any point in an endless chain selling scheme, all those on the bottom of the pyramid are left in a losing position, which is the vast majority of participants. MLM is a mathematical trick played on the unwary.

[jong_deleon]

“MLM” is a generic acronym for any type of multi-level or endless chain product distribution program. THE FIVE RED FLAGS of product-based pyramid schemes, or recruiting MLMs:

1. Each person recruited is empowered and given incentives to recruit other participants, who are empowered and motivated to recruit still other participants, etc. – in an endless chain of empowered and motivated recruiters recruiting recruiters – without regard to market saturation.
Demonstrates primary income is from recruiting, especially with the features of unlimited recruitment and such powerful incentives to recruit – vs. meager profits from retailing over-priced products. Hyper growth inevitably leads to perceived saturation, which often is followed by a Ponzi move to other markets to repay early investors.

2. Advancement to your place or level in a hierarchy of multiple levels of “distributors” is achieved by recruitment and/or by purchase amounts, rather than by appointment.
Demonstrates primary income is from recruiting, since that is the only way to advance in the scheme and to realize major profits. In recruiting MLMs, most recruits are doomed to failure.

3. “Pay to play” requirements are met by ongoing “incentivized purchases,” with participants the primary buyers.
Raises breakeven bar, assuring losses for most participants. May place MLM in category of a security or business opportunity – or a de facto investment in a pyramid scheme. Encourages hyper-consumption of products by participants – who are the primary buyers.

4. Company payout (in commissions & bonuses) per sale for the total of all upline participants equals or exceeds that for the person selling the product – resulting in inadequate incentive to retail and excessive incentive to recruit.
Removes incentive to do direct selling, since recruiting is potentially many times more profitable.

5. The MLM company pays commissions and bonuses on more “distributor” levels than are functionally justified; i.e., five or more levels.
Demonstrates primary income is from recruiting, not retailing. Enhances leverage for top participants who profit hugely, while assuring high loss rate for lower levels. Virtually eliminates retail option, due to high wholesale prices that make direct sales with retail markup difficult. Primary retail target is new recruits – which are making de facto pyramid investments.

1-5: Combining all five characteristics:
Results in high loss rates (close to 99.9%) – much higher than for no-product pyramid schemes (87.5% to 93.3%). Strong emphasis on recruiting as the primary source of income, satisfying most statutory definitions of a pyramid scheme. Demonstrates extreme leverage, necessitating fraud and misrepresentation in order to survive and grow.

[jong_deleon]

MLM Misrepresentation: You may know someone who had a bad experience in MLM, or had a bad experience yourself. But THIS one is different. No other MLM has products that can compete with these, and people are improving their lives by using it. The compensation plan is more generous and fair than the others. Those who get on board with this program now are going to make a killing.

The truth: This acknowledgement that other MLMs have not worked can sometimes disarm the resistance of prospects who don't have a favorable impression of MLM. However, though each MLM may have some unique features, 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 (TOPPs) 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.

[raymondhuerto]

nasayo naman yan kung mag papa-uto ka sa company
syempre kung mag M-MLM ka na rin naman. Make sure na tama ang company na pinapasukan mo.

[tennisace]

nasayo naman yan kung mag papa-uto ka sa company
syempre kung mag M-MLM ka na rin naman. Make sure na tama ang company na pinapasukan mo.

"... a rose by any other name would smell as sweet ..."
--- William Shakespeare's "Romeo and Juliet"


"... an MLM scheme by any other name would stink just as bad ..."
--- tennisace

Amigos, after all the discourse about this wonderful profiteering scheme, when will you realize that it's not about the company but about the MLM modus operandi?

[jong_deleon]

With unlimited recruiting in MLMs, new recruits find it increasingly difficult to recruit more participants into the program. This leads to perceived or market saturation, which is often reached very quickly. The program would collapse without constant recruitment to replace dropouts.

So while total saturation is never reached, when enough people are brought into the scheme that prospects perceive little remaining opportunity to sell or recruit, market saturation has taken place. Typically, MLM promoters then expand to other geographical areas or set up new product divisions in order to survive and grow.

[jong_deleon]

Unlimited recruiting in MLMs also changes the marketing nature of the system from one of a network of “distributors” to a network of buyers. Any clear distinction between buyers and sellers is blurred – even evaporating. The sellers are the buyers, and the buyers are the sellers – to themselves and their families. Also, we see the fallacy of the claim of MLM promoters that they are removing the “middle man” in their marketing system. Actually, in an MLM, middlemen may be multiplied hundreds or thousands of times.

New MLM recruits buy products mainly to qualify for profits from recruiting others, rather than from any real need for the products or from any expectation of profit from retailing. And as people tire of being solicited, the perceived opportunity to find willing buyers eventually diminishes to a trickle. Since the retail market is a phantom one, in order to increase the base of recruiting prospects who will pay retail to “play the game,” we see promoters introducing new product divisions or opening up new markets to recruit in other areas.

[jong_deleon]

MLM organizations have been described as cults, pyramid schemes, or organizations rife with misleading, deceptive, and unethical behavior, such as the questionable use of evangelical discourse to promote the business, and the exploitation of personal relationships for financial gain.

[rodelvargas]

NO CONFIDENCE TO WORK ONLINE? E sa De La Salle University Manila, nag open na sila ng short courses. Bakit? Kasi alam nila na sa DIRECT SELLING AND NETWORK MARKETING matutupad lahat ang pangarap ng bawat pilipino.

pls try my thread:
http://www.pinoyexchange.com/forums/...postcount=2102

[Bigot3AtBalbas]

^ sabay banat ng ganito

[jong_deleon]

MLM is the perfect con game. Participants: Con men/artists or grifters, shills & marks...