The Scam of MLM or Network Marketing Programs

Secrets of MLM

MLM, multi-level marketing, network marketing, no matter what you call it, you have to admit the lure is sometimes tempting.

We all know someone or are that person, that people want to avoid because you know the next thing out of their mouth is some guilt trip coming on the pitch to join their latest get rich quick scheme which is yet another MLM plan. They were just as convinced and excited about the last one as they are with the new one.

However, you trusted them the first time and you lost your shirt and your friend only made money off of you, but not much more. You don’t want to be trapped into another losing proposition, so you make up some excuse like, “Sorry, I have to wash my hair tonight. I’ll hear you out later.”

Even though you avoid another pitch from one of these pitiful people, you might entertain the idea in the back of your mind for a while, what if they are right? Do you want your loser friend to get in on this golden opportunity leaving you behind laughing at you? Is MLM worth it?

Don’t be too hard on your gullible friend. He or she may have been victim to a powerful sales pitch by the slick plan promoters whose full time job is to recruit people. They make it sound as if this “part time job with full time income” is something anyone with a little ambition can do.

Read more: What businesses work best?

They show examples from others in the company who have already made thousands of dollars a week and regularly go on trips, have new cars, and meet all kinds of new people. And yes, these are true stories. There are people who do make a lot of money. But that will most likely never be you. The numbers are NOT in your favor.

There are companies that have an MLM plan, but I do not actively recruit people into it. There are merchandise and only sell merchandise, not the plan. They do not charge entry or a yearly fee to join. You are not pressured into recruiting people. That is what a legal MLM company should do. Unfortunately, there are far too many illegal or borderline legal companies.

Beware of any company that stresses you recruit. That is how they claim you make your money. The numbers just are not there to support the claim that you, who has joined and under the original member’s 12th level, will ever get 12 full levels.

If you are on the company’s original top 5 levels, you have a great chance of being a multi-millionaire as long as the company keeps legal and you work REALLY HARD. After that, you will have to really work hard to find recruits and will always work to refill those spots where people drop out when they don’t make money. This is more than part time work to even turn a profit.

Take a real look at how the numbers are not in your favor in a typical plan that offers you money based on filling 3 wide and 5 down. The company has been around for a while and you are on the originator’s 15th level.

Read more: Understanding what is the circle of competence?

Typical MLM downline hierarchy

OriginatorLevel
3 People1
9 People2
27 People3
81 People4
243 People5
729 People6
2187 People7
6561 People8
19683 People9
59049 People10
177,147 People11
531,441 People12
1,594,323 People13
4,782,969 People14
14,348,907 People15
43,046,721 People16
129,140,163 People17
387,420,489 People18
1,162,261,467 People19
3,486,784,401 People20
10,460,353,203 People21
Typical MLM downline hierarchy
The Scam of MLM or Network Marketing Programs
Typical MLM downline hierarchy

Greed prevents you from remembering, when you are being recruited you are not at the top of the scale looking at the potential below you. You are most likely already at the bottom of the scale or refilling a dropout spot who dropped out due to lack of downline.

Look at the scale. If you were lucky and jumped in on the 5th level from the originator, you already have 243 other people selling the program.

In order for you all to fill to your 5th level and your peers filling their 5th level, there will have to be 14,348,907 people selling the plan for the originator. In other words, if you and your other peers on the same level were successful to fill your 5th level, over 14 million people will be selling this program. How likely do you think it will be for those on the bottom of the scale to ever make it to the same wealth as those on the top?

To get your 5th level filled, you have 363 people under you. It may seem like a reachable number, but you also have to remember to keep your 5th level of 243 people happy and help them get people. If anyone drops out, that only means another slot to fill to keep your income the same.

If your downline fails to recruit or turn a profit, they drop out and your downline falls apart. How hard would it be to keep even your bottom and most vulnerable level happy?

Read more: The Miracle ‘Power of Compounding’ in Investments

You would have to make sure your 5th level has reached their 5th level – in other words – 88,572 people in your branch of the downline game. All those people on all those levels is an impossible number to guarantee they are all as excited about the program as you. At any time, any number of them will drop out causing the downline to fall apart.

That seems a bit more difficult to keep happy, especially when you consider the 243 peers on your same level from the point of view of the originator. If they were lucky, they would also be helping 10 levels down to guarantee their income. That means you are now having over 14,348,907 people selling the program at the same time or who have tried it and dropped out by now.

A good thing to remember about life that will keep you happier is “The only person you can control is yourself.” Just as in life when you don’t have much control over what others may do, a business in which your profit depends on the efforts of others is always met with frustration.

Some may join the group excited by the same hype that brought you into the organization, but when the excitement dies down and they realize this is not the kind of work they like to do, they no longer are motivated to work the program and are dead weight in your downline.

The company argues, but there are over 6 billion people in the world and new people born every day – how can you possibly bottom out?

You WILL bottom out. Are you actually going to wait 18 years and pay the fee to be in the program until the babies grow up to join you? And what of the billions of adults? Why not consider them in your favour? Because they don’t all live in a country that will allow them to join such a program and there will be a huge communication barrier for you to recruit most of them.

The fact is when any MLM plan has been around for more than a year, everyone who is qualified to join has already heard of it and has either joined it or knows someone in it.

The originator isn’t too worried because those on the bottom of the scale are running around trying to fill the gaps of the constant drop out rates. It is easier for them to perpetually keep just 363 people in their 5 levels comfy and make the lower levels run around doing the grunt work.

While the plan is dying out, most of them are scrambling to create a new network marketing program with a list already in hand of those most likely to jump on it.

The top people do in fact make big money part-time. Even these middle management types make decent money, but they are nowhere near part-time people. What about the promises?

You see, the top people did their work already. They worked hard at the beginning to sell the idea to idealists who are pushing the program for them. Once the system is in place, they can flash a wad of cash on the underlings, take them on trips, and buy them cars as perks to keep them interested in pushing the plan for them. Those people selling you the plan get vacations, but it is usually a “vacation” in selling the plan to people in another town or a convention to hype up members.

The middle management types are really the hard working drone bees in the company. They do the most work in making sure the company is kept together and they do get rewarded handsomely for the effort. Those are the examples you are given when they make promises of money. Do you really want to work that hard? If you do, you will make money.

Most people do not have that kind of enthusiasm to devote that amount of time into the business. If, after a few months, they have few recruits and drop out. Honestly, if you were asked to spend $200 a month on products, but had no downline, how long would you stay?

Some of the plans out there require you to spend huge amounts of money each month on products you probably would never buy outside of the plan. If you are financially strapped, is it fair to be guilt-tripped into agreeing to buy a $195 a month package of overpriced goods you don’t use on the chance that it will pay for itself when you con at least 3 people and they con three people each into doing the same thing? It is not as easy as it seems.

Scam of a Big MLM

There is a big MLM company, that agree on a monthly package that costs $75 a month. In the package was usually a bar of soap, a small bottle of laundry detergent, 4 health bars, a bottle of calcium and a bottle of multivitamins. That was it!!! $75 a month for that???

For a large bottle of multivitamins with calcium, a package of 12 soap bars, 30 health bars, and 2 large bottles of laundry soap enough to 120 loads each would cost $75. If I were to spend that ballpark amount of money on those products, I could get better value and quality on my own. Investing in cryptocurrency would be a better option.

In 2010, if you had invested $1 in Bitcoin you would have received 333 coins, you would now be sitting on about $10,705,084 by 27 November 2017.

On 9 February 2011 bitcoin was traded for $1, now as of April 27, 2021, it trades for $54,680. Thankfully we can buy a fraction of bitcoin and start with as little as $1 and I wouldn’t mind losing one dollar rather than joining an MLM for $75 a month.

(By the way, I use Binance which is the world’s largest crypto exchange and so comes with the highest safety & security. If you want you can Register on Binance for free. However, it’s a referral link and I will get a small commission out of it.)

Signup to Binance for Free Here- https://www.binance.com/en/register?ref=G3T1X9B5

Or better put, for $75 I could actually buy products that my family actually needs. Not that they have little use for such things, but for the same amount I could buy things in reasonable quantities at the time they need it.

That MLM company had suggestions on how to recruit alright – give them the name and phone number of all your family and friends and they will talk to them for you. If you don’t give them that information, they won’t help you.

They obviously don’t know your few friends and family members. They would not speak to you for weeks if you tried that. It was not worth losing your friends and family just to have someone high pressure them into that scam. Why should you pressure people into doing a program you already know they have no interest in pursuing?

register on binance- invest in cryptocurrency
Register on Binance- Invest in cryptocurrency

People generally stay in for long because of their “friend” who pressures into sticking around long enough to see a profit and promised to help fill their downline.

Why did you join? Because a friend? This is a common story. Comment below if you could relate it with yourself.

You may try a program, but unless the business is something you truly believe in, you will not stick with it. So if you insist on joining any MLM company, please do the following:

  1. Check their history with the BBB – See on Better Business Bureau (BBB) if they have a long line of unanswered complaints. If they do, avoid them.
  2. Read their policies carefully – Legally, they are not supposed to make any guaranteed claims to how much money you will make. Some have a lot of fine print geared to work against you such as clauses which fine you extra if you don’t purchase something or will remove your downline if you break a rule.
  3. Make sure you like the products – It doesn’t make much sense for you to promote a company when you don’t like them. Many companies insist you buy or sell a minimum amount of the product each month or you don’t qualify for a money rollover.
  4. Beware of recruit pitches – Especially when the sales pitch revolves mostly around how YOU will make money due to the size of your downline. When the downline becomes more important than the product – RUN!
  5. Don’t put all your eggs in one basket – Don’t quit your day job or annoy all your family and friends until you are sure you can make money with it. You will certainly look foolish if you fail and they will not take you seriously in the future.

Other losing MLM propositions include the common chain letter scams as well as gifting programs. Those are illegal – no matter what they tell you!!! MLM programs which are not illegal, but still losing propositions include those pay to surf, pay to click, pay to search, pay to listen to music, pay to shop, pay to play games programs on the Internet. The pay out is so low and full of conditions that you will never see a check.

If it sounds too good, it is.

However, if after all this warning you are still determined to get into a network marketing programme, prepare to work it like a real job because only the ones who do are the ones who make any sort of money in it. Research it at the Better Business Bureau and see if there are any complaints and if they have been resolved before you invest your time and money. Prepare a business plan and count the costs of running this business, what you will need to do, and how much time will be involved on your part.

Then start marketing your plan because no matter what they tell you, the real way to make money is to sell the programme and the products to others. Start with classified ads online or your local tabloids, but check with the demographics first to be sure there is an interesting market first. Talk with neighbours, family and co-workers about the products you offer first and if they show an interest in the products, then talk about the opportunity.

There are companies willing to sell you leads of those who have responded to such offers in the past (chances are if you are in one, you are also on these lists) and you may want to consider purchasing such a list, but only if they can put a guarantee that the names are deliverable (you don’t want to buy 10,000 names and mail them out at your expense only to have 6,000 actually make it while 4,000 wasted postage stamps returned to you).

There are sites where you can sell your clicked photos (even phone photography) and can turn your passion into income such as Shutterstock, Freepik, Dreamstime, etc. Shutterstock is one of the best sites where you can quickly upload your clicked photos, Video clips, Illustrations, artworks & Vectors.

Do something productive which interests you through freelancing that may even pay you better than your main job, like Content writing, Photo editing, web & mobile, design, marketing creatives, SEO, web analytics, campaign management, story highlight design, custom gifs, Banner ads, Cover design, account management, video ads, bot creation, Video editing, thumbnail design, SEO, intros & outros, merchandise, and more! for passive income.

Learn any new skill or enhance a skill you already know and perform better than others. In this transforming world, good opportunities are coming that has a better scope and promising future. Check any new skill you want to learn, enhance or see what others are learning.

You could make a legitimate MLM programme work, but the odds are against you.

Check any new opportunity, jobs or anything that may benefit your career. Good Luck!

Leave a Reply