Does this describe YOUR Multilevel Marketing Company?

Its no secret that I'm not a fan of multilevel marketing programs, and I even created a huge MLM thread based on some of my previous experiences with multilevel marketing companies. You can read about my experiences and thoughts in general about MLMs here:

http://www.work-at-home-forum.com/mlm-5/does-she-like-you-does-she-want-you-to-join-her-mlm-29 44.html

Now, I'm not writing this particular thread to put any specific multilevel marketing companies on the spot. However, I'm attempting to educate those who are either involved with a multilevel marketing program, or are considering joining a specific MLM company. Before I continue, please check out the following article from ESPN, about a former college football coach who got involved with a MLM company, earned millions, then found out it was all a big scam:

http://espn.go.com/espn/otl/story/_/id/6774323/jim-donnan-former-georgia-bulldog-coach-accused -ponzi-scheme

Now, there is no doubt in my mind that Jim Donnan, former head coach of the Georgia Bulldogs football team, intended to scam or rip anyone off. I simply think he got involved with the wrong company without knowing it. Truthfully, that's what happens to a lot of people who join MLMs.

When I read the ESPN article, there is one thing in particular that stood out about it, and I think this holds true for many multilevel marketing companies today. Quoting from the ESPN article:

"According to court documents, investors sank nearly $82 million dollars into GLC Enterprises, but less than $12 million was spent on inventory and at least $13 million in investor money remains unaccounted for. With dwindling revenues, GLC eventually used money from new investors to pay old investors, which, according to the court documents, constituted a Ponzi scheme."

This is why I find this so interesting, and why I literally HATE being involved in multilevel marketing companies. As you will see later in this thread, I'm not entirely against multilevel marketing companies, I'm only against those that do business a certain way.

I actually hope this information will HELP many people reading this choose a good multilevel marketing company, and also help avoid investing big bucks in a BAD multilevel marketing company.
Here is what I'm getting at...

Many multilevel marketing companies have one MAIN goal in mind: to get you and as many of your friends as possible to sign up for the MLM company, and pay huge sign up fees in doing so.

Many multilevel marketing companies that have this one main goal in mind also have a secondary goal in mind: to get you and to friends to buy as much of their product as possible.

In short, many multilevel marketing companies make most of their money in sign up fees for bringing in new members, and when their members buy their overpriced products.

Did you notice the figures above from the ESPN article? Only $12 million of $82 million was spent on actual inventory! That's what ponzi schemes are all about!

Ponzi scams are not about delivering a quality product. They are about how many people you can get to join! Watch out for similar multilevel marketing company's that have this philosophy, but hide behind a "miracle" product!

Does this mean that all multilevel marketing companies are scams? Not at all. That's like saying all spoons are bad because Rosie O'Donell got fat using spoons to eat too much ice cream!

Here are some thoughts about identifing a good multilevel marketing company:

1. A good multilevel marketing company will have a real product to sell that there is a real demand for, that can stand on its own.

Take Beachbody for example. Anyone heard of P-90X? Tony Horton?

People actually recognize the name - compare that to something like a "Mego Supplement" MLM company with some strange ingredient you never heard of, that will make you fight like Bruce Lee within 10 days...IF you pay $100 to join the MLM company to promote it, plus another $100 for your 10 day supply of fighting pills!

So, before joining a MLM, ask yourself if the product is something that the average Joe would use, and wouldn't take too much persuading to buy the product. Remember, if you joing the MLM, YOU become the salesperson for that product, and you are basically PAYING MONEY to become a salesperson.

2. A good multilevel marketing company will have a product that pays enough on their own without having to recruit new members.

Technically speaking, you should be able to earn enough money from the MLM company's product alone to make a living. If your MLM company only offers, say, $3 a sale until you reach 30 members, what does that tell you about the company? You should be able to make a good income by just selling the product alone, rather than on recruiting new members.

So, before joining any multilevel marketing company, find out how much your commission will be for each sale of the product BEFORE you bring anyone else into the company.

3. A good multilevel marketing company will have a product you are interested in buying if you NEVER join the MLM company.

Whether you promote Beachbody's P-90X or not, everyone knows its a good product, and few people who actually purchase it try to make money from it.

Contrast that with what some multilvel maketing companies are selling. Don't believe it when you hear something like the product that the MLM company wants you to sell has a "essential rare ingredient" that is made by Earthworms that only live on top of active errupting volcanoes. I mean, if its so "essential" and so "rare", how in the world have humans been living without it for thousands of years?

4. A good multilevel marketing company will have low fees to join and zero to low monthly maintenance fees.

Yes, there are usually some basic startup costs to join most MLMs, like $50 or so, but why pay $500 to become a vitamin salesperson? Is it worth it? If your MLM has a montly fee, like $15 a month, remember, you are going to have to make enough sales to cover that cost.

And DON'T BELIEVE THE HYPE! The failure rate for is HUGE...most people never recover their startup fee, let alone earn enough to cover monthly fees.

5. A good multilevel marketing company doesn't encourage you spend too much money on their own products.

Ok, so this one is a challenge, because almost all MLM companies encourage you to buy their products, even the good ones. But here is the deal. If you spend money to join the company, and spend even more money to buy the product, are you really making money?

Can you get similar products at the store for less without the "special" ingredient? I was once involved with a MLM I'll just call, "Big Giant Soap Company", and their philosophy was that you shouldn't purchase any "negative" products, which meant anything that they didn't sell that competed with them. So, if you used a name brand shampoo that not only worked better than their own product, but cost HALF AS MUCH at the grocery store, you were using "negative" shampoo.

STAY AWAY FROM MULTILVEL MARKETING COMPANIES WITH THIS PHILOSOPHY! All they are doing is brainwashing you into becoming a decicated consumer for their overpriced brand. Remember, if you a
re spending more on the MLM company's products than you are earning from them, THEY HAVE GOT YOU RIGHT WHERE THEY WANT YOU!

Hopefully, this doesn't describe your multilevel company, but take an honest look at your spending history with the company. If you are spending more money on their products than you are earning from them, wake up. Ditch the MLM company and don't spend a dime more on their brand!

We all get burned by multilevel marketing companies....its happened to me! If any of this describes the multilevel company that you are considering joining, RUN FOR THE HILLS AND HOLD ONTO YOUR MONEY, BECAUSE ONCE YOU GIVE IT TO THE MLM, YOU WON'T GET IT BACK!

getagrip: If you are spending more money on their products than you are earning from them, wake up. Ditch the MLM company and don't spend a dime more on their brand!
Not to argue with the rest of your points but some products are worthy of being a customer.
That is exactly the kind of product you want your MLM to have!
(I supported one for 12 years as a customer only)

Some good points getagrip! What i always say when something like this becomes a question is, would you be involved with the company if it did'nt have an business opportunity attached with it? The products should "speak" for themselves. Become a product of the product and share your own story! It's hard for someone to question your personal experience when you have confidence in what you share with them.

Just2EZ: Not to argue with the rest of your points but some products are worthy of being a customer.
That is exactly the kind of product you want your MLM to have!
True. I've heard of some people joining an MLM just to get the discounts, and that's all fine and dandy. But I'd say to avoid MLM company's that have products like the shampoo example I cited above - where you can a better product at the grocery store for half the cost! There are people who are brainwashed into believing that the products they are promoting are better than what you can find at the grocery store because of the "rare double top secret patented ingredient" that their product has, but the truth of the matter is that you can get as much health benefit by eating two bites from a banana and an orange slice...for a fraction of the cost!

RICH4NURICHE: What i always say when something like this becomes a question is, would you be involved with the company if it did'nt have an business opportunity attached with it?
There is a movie called "Klunkerz", which is about the beginnings of mountain biking in the early 1970s. Only about 15 or 20 minutes of the film was devoted to the commercial aspect of the mountain biking business, which early pioneers of mountain biking helped establish. One of the points that was made was that if these guys had gotten into mountain biking to make money, they probably would have never succeeded. The reason they succeeded was because they were doing something that they really loved, and advancing the sport of mountain biking in the process!

Nice post getagrip, I personally don't bother with MLM, I find it tooo confusing with this downline stuff.

I'll stick to affiliate marketing info/physical items, website flipping, offline consulting and product creation

Good to see you back btw

I agree with some of the points here, especially the ones about the products. At the end of the day most people don't make money cuz they are in the dark about a lot of things. If your a real estate investor and your looking for other people to buy a property with you does that mean your a MLM company? No of course not but your recruiting people you may know or trying to get someone to spend money on the hope of a return. It's just more mainstream than a lot of the programs out there. The start up cost depend on what your getting. I just bought an entire blogging platform for 25 a month that has a #1 ranking with google. That allows me to make money of resell rights. Guess what there's people that have tried to make money with blogging but are lost, that's why it sells. Some awesome points in here though. Sounds like you got burned one too many times. I know that feeling. It's all about trusting your gut and doing your research on the company and product. That's the only way to put a stop to these unprofessional, scamming, lying so called companies.

When you pick a company make sure you are marketing a product that people will buy without the opportunity attached to it. So many smoke and mirror products, and money games involving no product what so ever.

I disagree though that MLM is a vehicle you can use to create a nice residual income as long as you are marketing a product or service where people come back every month and buy.

If you can offer an alternative to what people are ALREADY buying and you can either beat on price or service then you stand a good chance of building a nice residual check with minimal attrition.

If MLM was a scam herbalife wouldnt be able to advertise on the LA Galaxy uniforms, or the Orlando Magic wouldnt play at the Amway Center, you get my drift.

Dont fall for the big ticket money games. Partner up with a stable company that is publicly traded and compliant that cares about its reps and pays on time. Those who commit and persist can make a ton of money in the right MLM. Just pick wisely.

Chris

You can believe what ever you want to believe but the fact is that every year there are thousands of people all around the world who are quitting their JOBS and do the MLM full time.

Totally agree with these last two posts. There are many MLM's available with outstanding products and services. To touch on what ibuzz mentioned about finding a company that offers services that everyone out there is already paying every month is a great idea. I know of a few that have services such as these. If that company can offer the same service for a cheaper rate, then why not?? The idea of deregulation is about to take over this country..state by state. Texas and California have already begun!

talfighel: You can believe what ever you want to believe but the fact is that every year there are thousands of people all around the world who are quitting their JOBS and do the MLM full time.

Where is the "LIKE" button ?

This is why the business model has worked for all these years !
If you don't quit and dedicate yourself as if it was your only source of income.

Then, it will become just that your only source of income !

I'm an MLM guy and overall I think this was a good informative post.

PeterFrosen: Good to see you back btw
Agreed =].

Matt

getagrip: Now, I'm not writing this particular thread to put any specific multilevel marketing companies on the spot. However, I'm attempting to educate those who are either involved with a multilevel marketing program, or are considering joining a specific MLM company. Before I continue, please check out the following article from ESPN, about a former college football coach who got involved with a MLM company, earned millions, then found out it was all a big scam:http://espn.go.com/espn/otl/story/_/id/6774323/jim-donnan-former-georgia-bulldog-coach-ac cused -ponzi-schemeNow, there is no doubt in my mind that Jim Donnan, former head coach of the Georgia Bulldogs football team, intended to scam or rip anyone off. I simply think he got involved with the wrong company without knowing it. Truthfully, that's what happens to a lot of people who join MLMs.When I read the ESPN article, there is one thing in particular that stood out about it, and I think this holds true for many multilevel marketing companies today. Quoting from the ESPN article:"According to court documents, investors sank nearly $82 million dollars into GLC Enterprises, but less than $12 million was spent on inventory and at least $13 million in investor money remains unaccounted for. With dwindling revenues, GLC eventually used money from new investors to pay old investors, which, according to the court documents, constituted a Ponzi scheme."This is why I find this so interesting, and why I literally HATE being involved in multilevel marketing companies. As you will see later in this thread, I'm not entirely against multilevel marketing companies, I'm only against those that do business a certain way.
Curious,

Why would you use this example of why MLM's are bad when this case was strickly an investment ponzi scam, it had nothing to do with MLM?

With so many real MLM scams to choose from, why choose an investment scam to make your point that you hate the MLM industry. To each there own, but be more accurate and use real MLM scam in your debate, not a pure money ponzi investment deal.

As to affiliate marketing, no doubt, this has been a money maker for many, including myself for many years, but compared to the compettion out there now, very few are making decent money promoting affiliate products or all these phony guru ebook or secrets to making millions. Like with MLM, affiliate programs being promoted are now in the same category to me, too much hype, not enough substance.

Success to all,

FREEBUSINESSES

"Why would you use this example of why MLM's are bad when this case was strickly an investment ponzi scam, it had nothing to do with MLM?"


You hit the nail on the head.
MLM naysayers must really must live boring lives to put so much
energy into this kind of Bull !

FREEBUSINESSES: Why would you use this example of why MLM's are bad when this case was strickly an investment ponzi scam, it had nothing to do with MLM?
I think he was saying it is similar to a negative MLM that he described.

Ponzi schemes pay people that get in first with money of the people that come in after. As far as I know with no product exchanging hands.

http://www.sec.gov/answers/ponzi.htm

I might be wrong but that's just how I understood it.

Mike McClurg: MLM naysayers must really must live boring lives to put so much
energy into this kind of Bull !
He also said there are good MLMs out there. I think the intention of the post was to be informative to people that are new and maybe looking for an MLM company or someone in a company that refuses to give up but cant seem to make money.

I don't know if anyone saw Lawrence Tam's latest video about how he left Numis Network. He was a 4 star rep making ONLY $150/month plus fast starts. Some MLM companies just are not designed for people to really succeed.

Matt

Matt Zenittini

" He also said there are good MLMs out there. I think the intention of the post was to be informative to people that are new and maybe looking for an MLM company or someone in a company that refuses to give up but cant seem to make money."

Hey Matt,

That's true,
I admit to being a little touchy when someone that says

"It's no secret I'm not a fan of MLM" posting anything especially in an MLM thread may shed a bad light on an industry that I'm fortunate to say has been so good to me.


My family has been involved in this industry since the late 60's.
And have found for the most part people with great integrity.

I guess you can say unlike the poster I am a BIG fan of MLM.

Mike McClurg: My family has been involved in this industry since the late 60's.
And have found for the most part people with great integrity.

I guess you can say unlike the poster I am a BIG fan of MLM.
That's super awesome to hear ! .

Yeah I really think he was just trying to help people. He never has been a fan but always has known the facts.

I'm a HUGE MLMer. I love it with a passion haha.

I'd love to talk sometime about successful strategies you may use in your business if you want? Compare notes.

Matt

Hey Matt,

Let's do talk sometime.

I always like connecting with others in our industry.

Mike

Interesting thoughts,

No doubt, all MLM's are similar in content, low cost start up, make big money, easy, same old same old products or services, and very few will tell you that it takes sales to make any money, or if like many, you have to focus on recruiting. There is a lot of good points, but like we all know, there are some MLM's which are better than others. But to label the whole industry as if it is a ponzi is dead wrong.

How many succeed is another thing, even if you have a great product and lowest price for equal or better quality, it still takes a sales oriented person to make it in this industry. No sales, no success, it is really that simple. If you focus only on recruiting, you will never see success for most will quit without a product they use and value, so choose wisely, but don't think all MLM's are the same.

Success to all,

I've been away for a while, but after reading some of the responses from this thread, I wanted to address a couple of points that were made above. It seems that there is a misconception that I purposely used an example of a known Ponzi scam to make my point about how I feel about MLMs. That wasn't the case at all, or at least not my intention.

While I'm not an expert on GLC or what product offerings they had for their consumers, when I read the ESPN article at the time I created this thread, it appeared as if they had a product of some kind to offer (feel free to enlighten me on exactly what they were offering since it looks like I'm a little in the dark about this). That is stated here:

"According to court documents, investors sank nearly $82 million dollars into GLC Enterprises, but less than $12 million was spent on inventory and at least $13 million in investor money remains unaccounted for."

The whole point of using this example was to illustrate the fact that some Ponzi schemes disguise themselves as multilevel marketing companies. I'm pretty sure many people who were involved in GLC thought they were offering a legitimate product or service to what they believed was a legitimate multilevel marketing company.

When I see multilevel marketing companies that charge large sign up fees, with a stronger emphasis of bringing new people into the company rather than actually selling their products, that brings up huge red flags in my mind. I don't think all MLM companies operate this way, but I have no doubt that a lot of them do. I also have very little doubt that many MLM companies profit more from revenue generated by new recruit sign up fees and product sales to these recruits compared to sales of their products to consumers who do not join the company.

I know some people are offended by this idea, and I also realize that this does not describe all MLM companies, but please think about it logically and do some of the math. Some MLM companies offer a great product that consumers want, like Beachbody, and can survive on their products alone, without recruiting sales reps to sell their products. I'm sure that there are many other examples. Others focus mainly on recruiting new members to make revenue on sign up fees. These are the types of MLM companies I don't like and do not wish to be affiliated with.

Back in the early 1990s I was involved with Amway for a brief time. I don't know what their policies are now, but I remember something that stood out to me. One of their rules stated that you had to have at least 10 "real" customers a month from people OUTSIDE the company who were purchasing products you were selling.

The reason for this rule, they said, was to make it legal.

WOW! It really makes sense as to why they had this rule: because if their sole intention was to recruit new members without making product sales to individuals outside of the company, then they would be nothing more than a Ponzi scheme, fronted by overpriced soap and catalog products. Just something to think about....