What is the Problem with MLM and Network Marketing?

the Problem with MLM and Network marketing

It never ceases to amaze me how people think there is a problem with network marketing and MLM.

Some people are extremely passionate about it.

And then there are even top celebrity authors like Robert Allen, Mark Victor Hansen, and Robert Kiyosaki who are doing it and advocating it.

Yet, in many circles, you might as well declare yourself a leper if you admit to that you are in network marketing.

So, what is the problem with MLM and network marketing?

Maybe it’s the pyramid structure?

But you can’t really take issue with the tiered compensation structure.

Almost every large sales organization in the world has that.

Salespeople get commission and sales managers get overrides or bonuses on top of that, and sales directors on top of that, and VPs on top of that.

Or maybe it’s the fact that you have to pay to participate in it?

But that can’t be it.

That’s a standard franchising model.

And I assure you, the franchise fee of most traditional franchises dwarf the sign-up cost of any MLM program by comparison.

Now certainly, there are illegal pyramid, or “Ponzi”, schemes.

This is where the money is all being made off of signing up other people, with little or no real product ever being delivered.

But in spite of whatever perceptions people may have, the fact is that Amway, Avon, Herblife, PrePaid Legal, USANA, and many others have sold millions upon millions of dollars of products to happy customers, many of whom are NOT also reps.

So, there may be a perception problem here, but if so, the perception is out of line with the reality.

But surely the bad reputation MLM’ers has some more basis in fact than the occasional illegal pyramid scheme?

The real problem with MLM is not MLM itself, but some of the people it attracts. 

Network marketing is just a business model, and it really amounts to “micro-franchising”.

Its upside is that it has a very low cost of entry, with the potential for exceptional revenue, and there are those who achieve that.

But those same things that make it attractive to many who are NOT really qualified or prepared to become business owners.

The obvious characteristics of MLM make it attractive to people who:

  • have not done well in their business or profession and have little money saved up to invest
  • have no previous experience owning or running a business
  • have no previous experience in sales
  • have little or no experience developing business relationships other than that of employer/employee/co-worker
  • are not satisfied with their current level of income
  • have unrealistic expectations of the amount of work involved compared to the revenue realized

Don’t get me wrong…

I’m not saying that there’s anything wrong with any of these things.

Or that this describes even a majority of network marketers…

Only that it describes a disproportionate number of network marketers and that many of them never do anything about it.

Robert Kiyosaki

As a result, many network marketers end up:

  • over-selling the opportunity
  • inappropriately discussing business in social situations
  • coming across as desperate
  • over-focused on new recruits and neglecting existing customers as a result
  • being either inaccurate or deceptive when talking about their business

Again, I’m certainly not saying that this describes a majority of network marketers…

But it does describe enough of them to tarnish the reputation of the rest.

To pre-judge someone based on the basis of a small minority of people in that group is horribly unfair…

But we must realize that most prejudices have some basis in reality, even if it has been distorted.

So what’s the solution?

There’s a first time for everything.

And network marketing/MLM is a great opportunity for people to have their first business, their first sales role, etc.

My point is this…

Recognize it for what it is: 

It’s a business and you are a business owner. 

And if you have never owned a business before…

If you have never done sales before…

If you have never networked before…

You need to learn about how to do so and not just from the network marketing/MLM experts, but from established experts in those fields.

Network marketers who are serious about building a business:

  • should be reading and learning about business fundamentals
  • the latest sales and marketing techniques
  • strategies for networking and business development

Not just swapping tips at your team’s weekly or monthly meeting.

Act like a small business owner and people will treat you like one.

Pyramid Scam

If you’re considering an MLM, CDM, or network marketing opportunity then ask these six questions to determine whether a network, multi-level, or consumer direct marketing is worth your while and your money.

Who is your upline? 

Take it all the way to the top.

What do you know about the person who introduced you to the opportunity?

Can you trust what they tell you?

Are they willing to divulge exactly how much they have been making?

And what about the founders of the company (assuming it’s a newer company)?

Have they been successful and reputable in their previous businesses?

Investigate your entire upline just like you would a business partner you have never met before.

What is the product?

Is it something that would sell well in a retail store or via other traditional marketing and distribution channels?

What’s the competition like?

How convincing are you going to have to be in order to sign up customers?

If you are not an experienced salesperson, don’t expect to become one overnight.

You are going to have to become an evangelist for the product, so make sure you believe in it.

When will you start actually making money?  

Don’t fall for the line that it takes months or even years to show a profit.

You should be able to recoup any investment and start earning income within just a few weeks if there’s really demand for the product.

Making a living at it is another story.

You need to be able to work it part-time in addition to other steadier income sources.

Will you realistically be able to do that with this company?

network marketing

Where is the product being promoted and where can you promote it?

Is the company doing advertising and publicity of its own to help create demand for the product?

And what restrictions are there on where and how you can promote it (advertising, web sites, etc.).

There’s not a right or wrong answer to that question.

A wide open policy is more flexible for you, but for everyone else, too.

If you are prepared to be highly competitive, that’s fine, but if not, you may prefer to work with a company whose policy is more restrictive.

How were you recruited?

Were you recruited primarily as a customer, with just a mention of “income opportunity”, or was the primary pitch about the business opportunity?

The ethical way to build a downline is to sign people up as customers first, and then if they like the product, they will be drawn to become a rep.

A hard-sell on signing up as a rep right at the outset should send up a red flag for you.

Why are you doing this?

This is perhaps the most important question of all.

If you are doing it because you think it’s going to help you out of a cash crunch, forget it.

If you are doing it because you think you are going to be rich in a year, well, it’s fine to have a vision, but don’t bank on it.

On the other hand, if you really believe in the product, that gives you the best likelihood of success with it.

There are no absolute right and wrong answers to these questions.

The point is to make sure that you are going into it with your eyes wide open.

Many people have made a lot of money in network marketing, MLM, and consumer direct marketing…

But many more have ended up wasting a whole lot of time and money chasing a pipe dream.

You can ensure your success best by being sure you are getting into the right opportunity in the first place.

Now with that being said…

You might be a little scared to take action.

Would you like to have a step by step system and a coach that with guide you through the process?

Your coach earns 6 to 7 figure monthly and is happy to guide you to your path to success.

Now how would you like having sales team close all your deals for you while you are learning your business.

You will also get access to your very own traffic coach.

Now see how she did 7K in a day using this system.

Her 7K Day

So what is your Problem with MLM and Network marketing?

I’d love to hear it in the comments below…

Here is another good blog to read: What is a Ponzi Scheme – How Do Ponzi Schemes Work

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About Maria Barina

Maria Barina is a mother and grandmother who worked for the NYC Board of Education as Laboratory Specialist Bio/GS for 26yrs till the age of 56. Her husband, after 37 of marriage, passed away from Lung Cancer. She came to myEmpirePRO to seek guidance on how to get freedom that an online business can provide. Freedom to her is being able to do what she wants, when she wants to and to show others they can do the same to. Since she done that she is able to do this by working anywhere she goes and became a mobile-prenuer

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