I know I am opening myself up to criticism for this post, but it\’s been on my mind and I really just want to put it out there.
I dislike the way multi-level marketing has been done by many companies.
I don\’t dislike multi-level marketers, mind you (well, most of them anyway). I just think that business model has proven destructive to many individuals and families.
Have I dabbled in MLM?
Yes. I had my first exposure to MLM in college when I saw a \”Lose weight now, ask me how\” button.
Then I tried drinking the aloe vera beverage that the company was selling and wanted to puke. I decided perhaps another line of work would be more appropriate.
As an adult, I got into an organization called Global Biblbe Network. Some dear friends told me about this wonderful many who was running the company whose primary goal was to send bibles to Russia. They choose MLM as the mechanism for recruiting people who would then multiply these efforts… all while earning a profit.
The man? Phil Piccollo.
Go ahead. Google him. It\’s quite entertaining.
Being young and naive, I signed up as a distributor. As in many MLM schemes, you are encouraged to purchase product in order to reach a certain level, thereby entitling you to increased commissions. Yes, I bought the product.
I then went about working with my upline to schedule meetings and recruit new distributors, so that they too could enjoy the benefits of the greatest thing since sliced bread.
And I was good. REAL good.
It was at that time that my wife noticed my natural gift for public speaking. I just knew I had the attention of the crowd and was able to sign up plenty of new recruits.
When Bibles didn\’t work, Phil turned to offering a shopping club as a new feature that distributors would be able to sell. This has been repeated so many times in MLM that it is a joke.
Needless to say, the company went up in flames and relationships were severely damaged. Interestingly enough, the one time my wife met Phil, she told me afterward that she didn\’t trust him.
I learned two very important things through this experience.
1) I should listen to my wife.
2) Even if the company is legitimate and the people behind it are filled with good intentions, MLM can be destructive and bring out the worst in people.
Here are some of the reasons I suggest people be careful before getting involved in MLM. Please note that I have participated in some internet-only MLM programs that do not require me to personally sell or solicit people. It\’s a completely hands-off participation, with the best ones not requiring any money. You can read more about my MLM experiences online here and here
First of all, MLM can be a breeding ground for scam artists and thieves. Since Multi-level marketing is often all about the lure of easy money, it\’s natural that unethical people would gravitate towards the opportunity to make a quick buck on the backs of those who can\’t necessarily afford it. It\’s just human nature.
This is bad for the unsuspecting individual who just wants to earn an extra $1000/month to get out of debt or who catches the vision of owning a fast car, a boat or a second home. There\’s nothing wrong with dreaming big and working to attain those goals. It\’s just that most people don\’t realize the sacrifices they will have to make in time, money and relationships to make it happen.
Next, many MLM companies require an up-front investment. They say that you should expect to invest in any business, and I agree with that. In fact, I preach that. But new distributors are often told to make an investment (eg: purchase the company\’s product) in order to qualify for a higher level in the food chain. How many garages are there still stocked with cleansers, vitamins, water filtration devices, makeup and other product that people purchased at high prices and were unable to sell at any price? Just check ebay. Look for companies that don\’t require big up-front investments!
In my business, and most traditional businesses, if you aren\’t happy with a product or service, you can appeal for a refund. I don\’t have many unhappy customers, but I guarantee you that when I do we bend over backwards to make sure all is made right.
That doesn\’t happen with MLM. You bought it? You own it.
Finally, the greatest reason that I am opposed to MLM in just about every form is that it destroys relationships. In many companies, new distributors are taught to first sell to their \”warm market.\” That means the person who has been your mother, father, brother, sister, aunt, uncle, nephew, niece, employer, employee, friend or aquaintance has now become someone who sees you through the lense of dollar signs. The relationship that you have had can change dramatically as they seek to recruit you for the life-changing program they have gotten themselves into.
Of course, MLM depends on people using and manipulating their existing relationships in order to grow the pyramid. Why wouldn\’t you talk to the people you already know before you talk to strangers? Why wouldn\’t they want to experience the financial freedom that your program has to offer?
Unfortunately, MLM turns on greed in many people unlike anything I\’ve ever seen. There is no greater way to destroy a relationship than to get in a bad business deal with someone. (ok, having an affair can also destroy a relationship quickly.)
I\’ve seen it happen time and again. I\’ve even seen it happen in the church, where well-meaning people seize an opportunity to do business (in the name of God, of course), and end up worshipping the almighty dollar. This is not a criticism of the church. On the contrary, I believe it is the same spirit that caused Jesus to turn over the tables and chew out the merchants who were selling in the Temple.
MLM breeds a cult-like mentality. People who used to engage in other relationships and activities no longer pursue those relationships. Instead, they give 100% of their time and efforts to their distributorship, attending meetings and always on the lookout for new suckers, er, recruits, to sign up under them.
Bottom line? I believe MLM can bring out the worst people, and the worst in good people. Good people get hurt time and again.
Can you make money in a multi-level organization?
Absolutely.
Do many people succeed?
No. The system is not set up for the majority to succeed. Because it is pyramid in nature, those at the top will generate the most money while depending on those at the bottom to foot the bill.
Want to research MLM some more? Here\’s a site with great articles and links to resources.
Are there a handful of solid multi-level marketing companies with ethical people at the helm? Yes, I believe there may be a few. In fact, I am involved in some organizations that do not require me to put up money for inventory on product and that don\’t require I sign up my friends and family to be considered successful.
Are there well-intentioned MLMers who really believe in their business and the good that they are doing? Certainly.
I don\’t mean to paint any one person in a bad light (except Phil Piccollo, who manages to do his own painting…) There are always exceptions.
What are your thoughts? Flame on!