What's Wrong with Multi-Level Marketing Business?

MLM Business: Good Start and Bad End

     Multi level marketing may at first have a good business purpose. However, in its journey it often causes bad things for those involved.

MLM has two basic principles, there are products that are sold and product sales that depend on the efforts of members to find and recruit new members.

Multi-level marketing (MLM), also called network marketing is a marketing strategy for the sale of products or services, in which the company's revenue comes from the non-salaried workforce selling the company's products, while the participants' income comes from a pyramid-shaped compensation commission system. (wikipedia.org)

Since this business model first started in the United States in the 1930s, there have been many media reports that write about selling products by means of multi-level marketing.

Some say that if the MLM business is run properly, it will provide welfare to members. Many also believe that this is just a fraudulent business scheme, which is often abused by those who want to take shortcuts to become rich.

It often happens that in the MLM system, the products being sold are not important, even ignored. The main focus in the MLM business is focused on trying to recruit as many members as possible, because the possibility of getting a bigger commission. This income comes from the money that new members deposit.

Many people believe that MLM is a fraud. Several countries including Singapore, Australia, and the UK no longer allow MLM businesses through this recruitment model.

Because, when offering this MLM business to new members, some people use tactics to "trap" prospective buyers. For example inviting to an event whose name is totally different from the actual event.

From conversations with several people who felt they were victims of fraud, for example, they were invited to a dinner party, or just wanted to meet and have coffee, some were invited to watch cultural events.

Socialization activities like this are used to cover up that after people come, they will be immediately invited to join in, as well as a presentation about the business and the products it sells.

Aren't Some People Making Money in MLM?

We're going to analyze the MLM "drive mechanism." We'll detail how they're intrinsically unstable, guaranteed by design to oversaturate the market without anyone even noticing it.

We'll see why MLM can never equate profits the way a normal company does. When this happens, the only money generated is not from product sales, but from contributions from people lower in the organization.

MLM organizations have become exploitative, and many high-ranking MLM promoters have been shut down, and "executives" jailed, for selling "success gimmicks" to others.

Yes, money can indeed be generated with MLM. The question is whether the money made is legitimate by selling the product, or is it "generated" through sophisticated fraudulent schemes.

Some are Victims, Some are not

Not everyone who is courted, approached, and offered to become a member of a multi-level marketing business feels they are victims.

There are those who voluntarily become members, who then follow the sales of products with an agreed pattern of recruitment. Many also decide not to become members, because they see no benefit in joining the MLM business, if the focus is only to find as many people as possible.

Here are some things that you need to pay attention to if you are offered a multi-level marketing business.

1. You are paying to become a member or start a business.

If the business goal is to sell a product, no initial costs are actually required. Usually they use the excuse that there is 'money to join' for training and self-development, even though the form is just some cheap brochures.

2. You are promised to make a lot of money with a little effort.

Indeed, it is possible that you can be rich without working too hard. However, this may not happen to everyone who participates in a kind of multi-level marketing business.

Earning a lot of money requires hard work, not just recruiting people.

3. Product purchases are often referred to as 'investments' and those who purchase products are referred to as 'business owners'

Many MLM companies have repeatedly convinced a lot of money to be generated. But does not explain how you can get it.

Most multi level marketing companies can only provide side income, not main income.

A number of MLM companies encourage their members to look for new members instead of making their members fully understand the product they are selling.

A company filled with lots of members but no products to sell, just being a collection of people, not a company that will make you successful.