Go Back to Reports Master Listing

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.