When I hear of people falling for multi-level marketing programs it’s so disappointing to me. There’s so much money destroyed (from people that need it) in the process that inevitably all goes back to a scamster.
I won’t even name an MLM program. Just see if this song and dance sounds familiar.
How to Tell if You’re in an MLM Program
You hear a pitch and join a program that promises all these great incentives and payouts.
You decide to sign up because everyone’s pushing it so hard and you’d like to be in business for yourself. And you don’t mind paying for the program starter kit. After all, you’ve got to invest if you’re serious.
You post on Facebook how happy you are to be in the program and how great it’s going to be while casually slipping in that if anybody wants to buy any of this marvelous product or is thinking about joining themselves, to let you know.
Then you start pitching to family and friends in person. Several family members buy from you with a coerced smile on their face. And a few friends even sign up as your referral.
And let’s go ahead and mention that you’re actually helping them out. The product really works and is life changing because it does X better than anything else on the market. As far as your friends, who wouldn’t want to be their own boss and maybe even quit their job?
Things are going great after the first month of selling and recruiting. You get a nice check in the mail and you’ve really got to hand it to yourself, you had a good feeling about this program.
Beforehand, you had read the negative reviews online but those were just haters and people with sour grapes. And let’s face it, all companies get a bad review at some point.
The second month is a little more challenging. Your family is politely refusing more product and you’ve signed up all your friends that will listen to you.
You go back to the course materials and start looking in the advanced marketing pamphlets. Network in your community they say. Build a website. Wear the gear. Put some decals on your car.
Nobody said this was going to be easy but it can certainly be rewarding.
You pound out a few more product purchases and one more referral by rolling up your sleeves but things are still down in the second month. You get another check but it’s smaller.
By month three, you get no one. Nobody wants product refills. You don’t know anyone else interested in your MLM program. And the writing’s on the wall: You’re going to have to get a job to get some income flowing in.
Were the haters really just people saying the truth?
Welcome to MLM hell. Here’s what’s going on:
Someone came up with a product line, let’s say it’s a nutritional supplement.
What they do is private label some supplement – could just be something generic made in China – and say it’s awesome to the full extent the law will allow them.
You might hear the words proprietary blend or trademarked thrown around to lend more credibility but what you’ve got is a private label product. It’s not special.
They need a way to promote that supplement to make money.
What they do is come up with a multi level marketing scheme to make money for themselves in various ways.
First, they overprice the product by about 1.5x. Let’s say you can buy the same protein powder at Wal-Mart for $20. They’ll charge $29.99.
Second, they’ll make you pay for the privilege of selling their overpriced products. Let’s say the starter kit is $149.95 for you to get in the game.
Third, they’ll enlist you to sell for them. None of your family and friends would ever buy the product from the company but they will from you if you come to them with your hopes up.
Fourth, you’re also enlisted to get more people working for them to repeat the process so they can reach even more family and friends in different circles.
Of course, they’re happy to give you a cut of all the sales you make for them because you’re doing all the hard work, you’re the rainmaker bringing in money.
But, as is always the case, the cash is always flowing towards them. In fact, they might even have you paying a monthly fee just to continue to be in the program. It might also be a fee in the form of a required subscription purchase. Or you might be buying product from yourself just to meet the monthly minimums.
Whatever the case, they’re going to milk you until you have no more money and quit.
Never join an MLM program. They’re designed to fail.
People are always coming up with ways to blur the lines and change up the script so they don’t come across as MLM but the basics from above will always stay the same.
Contrast something legitimate like affiliate marketing: In affiliate marketing, you get paid a commission if you refer a sale.
One last thing to remember: Never ever pay someone to sell their product for them.