The Truth About Multi-Level Marketing Programs
Multi-level marketing is a fancy name currently being used by some companies in an effort to do two things:
The first objective is to move products from their warehouses, and thus increase their sales volume The second objective is to recruit "an army" of commission-only sales people.
Make no mistake about it! After you've stripped all the hoopla away from these "super money-making opportunities", the bottom line remains the same - you make money from commissions allowed from the sale of products.
Generally speaking, very few people have any "real" sales experience, and thus, if offered the opportunity to take a job as a commission-only sales person, they'd run from it like the devil.
At the same time, most commission-only sales positions are "direct selling" opportunities. And, the definition of direct selling begins with an explanation of what a door-to-door sales person does.
Don't get me wrong. A lot of personal fortunes have been amassed by commission-only sales people. For sure, when you attempt to sell by mail, you're almost always involved in commission selling and direct selling.
What I'm saying is that most people are "duped" into joining multi-level marketing programs without understanding that it is commission sales and at least a form of door-to-door selling.
Worse than "duping" you into joining their programs... many so-called multi-level marketing companies subtly encourage you to break the law, and run the risk of huge monetary fines, long terms in prison, or both! This is done by at least, "inferring" that if you will find a number of people to duplicate what you're doing, and in turn encourage each new enrolled to keep the system going, everybody will get rich!
Not so, my friend! That's a "Ponzi Scheme", and if you don't really understand what a Ponzi Scheme is - allow me a moment to explain. Such a scheme is any kind of money-making opportunity where you get paid by recruiting, enlisting, or soliciting other people to follow your lead and continue a chain of events. In other words, you'll be paid a commission from the people you recruit - (1) from the people they recruit (2) from the people they recruit (3) and into infinity.
This is the "secret" impact that most multi-level marketing companies use to induce you to buy into their program. Such practices are illegal, and subject to federal laws which could destroy you. So called, bi-level marketing plans are the same thing, as chain letters, and people helping people clubs. They're based upon the Ponzi Scheme. If you have any doubts, take your money-making opportunity and sit down with your local postmaster and discuss its legality.
These things are illegal because if - as in a dream world - they really worked, by the time one person had attained level number five, he would have "signed" everybody on earth with only the first two levels receiving any of the money. There would be nobody left for the third, fourth and fifth levels to sell to.
Multi-level marketing companies get around the law by stating within their by-laws that it is strictly forbidden to promote or attempt to sell the program by mail. Then, when the postal inspectors come calling on the little guy, the MLM company says: "He did it - we don't do such things - here, look at our by-laws".
The bottom line is as old as the hills: you can do anything you want - legal or illegal - so long as you don't get caught - but when you do get caught, you'd better be prepared to pay the price.
Besides the terrible mess multi-level marketing has gotten a lot of normally law-abiding and moral people into, it has "foisted" upon these people personality changes that many of them do not like.
To make any money selling a product or service on a commission-only basis, you have to have the ability to sell like the proverbial "used car salesman". It's all hard sell, and more often than not, involves "forcing" the prospect to buy whether its good for him or not.
Anyone who has ever attempted to succeed in commission sales, knows that it takes a product in great demand - a great deal of sales calls, advertising and persistence, and a little bit of failure and a tremendous amount of "total business moxie" to make any money at it.
There's nothing wrong with commission selling - and if you're good at it, you can make a lot of money in this kind of selling. But remember that multi-level marketing is commission selling, the way "distributors" are recruited is very illegal, with the authorities closing down more MLM companies everyday - and it takes a special kind of person, with the right kind of personality to succeed at it.
On a Shoe String Budget at Home
Just what are all those thousands of programs and solicitations spreading a swath across the country...called "Multi-Level Marketing"? Well a good portion of them are nothing but chain or pyramid schemes, some completely illegal.
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After 7 years in business I still read almost every piece of mail I get. (I guess that shoots down those rumors and detailed instructions from people on how to get your envelope opened since I open them all.)