Search the Internet and you’ll find MLM scam articles everywhere. Some of it comes from the government. Some of it comes from those with an agenda and (quite often) it’s people smearing their competitors in the form of a ‘review’.
The problem is that it all feeds into a narrative that particular companies, or the industry as a whole, are one giant fraud.
It isn’t true and I’m going to explain why.
If you’re genuinely interested in this storied industry, I’m going to respond to the MLM scam myths that you see everywhere.
To get the real truth and ease your fears, keep reading!
Let’s Start with the Government
If you’ve ever owned or operated a business (of any kind) in America, you know that the government is not your friend. I imagine it’s probably the same in Canada, Europe, and other places. It’s likely worse – possibly far worse.
So, it’s no wonder that a Google search of MLM, Network Marketing, or Multi-Level Marketing will almost always include a 1st page article from the Federal Trade Commission (FTC). It will contain various cautions, but my favorite are the warnings about pyramid or Ponzi schemes.
If Social Security (and the National Debt) isn’t a Ponzi scheme, then I don’t know what is.
I’ll have more to say about the government later.
MLM is a Scam Designed to Rip You Off
In other words, Network Marketing is all lies.
Don’t believe it. The people saying that tried and failed. Now they could have been with a company that failed. More on that later too. Most likely though, they just gave up and quit because they didn’t get rich in two weeks.
Multi-Level marketing has a really bad rap. I know that. Even the abbreviation, ‘MLM’, makes people cringe. I think it’s because of the old methods of sharing and marketing. I’m talking about house ‘parties’ that you get roped into, the uncomfortable hotel meetings, the elevator pitches, the ‘3-foot rule’ dogma, and so on.
I’m also very familiar with those videos they show you (or used to show you) of mansions, fancy cars, and yachts. But they used to do that with those late-night real estate courses and seminars too.
I mean, really.
Timeshares, used car dealers, home repair contractors, auto repair shops, online colleges, massage parlors, telemarketers, door-to-door salespeople – even door-to-door church people.
Lots of stuff has a bad rap.
But still, MLM seems to be in a class of its own. For example, if you’re going to build your MLM business with online strategies, you’re going to need an autoresponder. That’s mandatory. But the major autoresponders (like GetResponse, Aweber, Mailchimp, etc.) won’t allow any email campaigns that have anything to do with Network Marketing. Crazy, right?
I’ve solved that problem, but it’s annoying and it’s undeserved. I have no idea what they’re afraid of and I’ve stopped thinking about it. So should you.
MLM Doesn’t Work Anymore
That’s ridiculous. Of course, it does.
As I’ve mentioned, a lot of the old tactics don’t work anymore because they’ve been run into the ground. But this is the 21st Century. At this point, everything is so different that it’s almost a new industry.
It can work better than ever if you’re willing to learn a brand-new set of skills. Yeah, that’s labor (I know), but it’s what it takes. That means it’s not for everybody. And hey, you can still do it the old way if you want!
Don’t forget that Network Marketing remains the one industry where anyone can start from virtually nothing and become a big success. That hasn’t changed at all.
“If you are a person with huge dreams and would really love to support others in achieving their huge dreams, then the network marketing business is certainly a business for you.” – Warren Buffett
MLM Companies Don’t Last and You’ll Lose Everything
Yeah, there’s a blizzard of bs out there when it comes to new ‘down-line builder’ businesses. Get on YouTube and you’ll be accosted with it.
Do businesses fail? Yeah, they sure do! MLM is no exception and business failure can happen for a wide variety of reasons.
Think of all the companies (banks, restaurants, retail stores, newspapers, automakers, airlines, manufacturers, etc.) that have gone out of business over the years. It happens all the time.
I have a personal story from the 90’s.
There was a company here in Texas and their product was called Formula One. It was an herbal pill that was designed to make you ‘look good, feel good and have more energy’. This thing was red-hot and soon became famous here in Houston (where the company was based).
The late Royce McCoy, the founder, was a great salesman and a good guy. He was also a family friend. Royce started something special with this MLM company. It caught fire and people were building downlines fast and earning some good money. I know, because I was one of them.
Then one day, there was a news story about a lady who loved Formula One and died playing tennis. A local news anchor, Dave Ward, held up a bottle of the pills on TV and said, “This product will kill you”.
It wasn’t long before the State Attorney General, Dan Morales, forced the company to cease operations (pending a lab analysis of the herb mixture). That’s all it took to destroy the business.
Later, it was determined that there was nothing wrong with Formula One and it didn’t cause that woman’s death. It didn’t matter. People were afraid of the product, everyone’s downlines had collapsed and a whole lot of dreams were destroyed.
Is that an indictment of Network Marketing as a whole? No. It just happened, that’s all.
Now, About Those Pyramid Schemes
This particular warning about MLM has gone on far too long and needs to stop.
The claim is that the entire business model is fraudulent because the math doesn’t work. If that’s the case, then why are the most well-known and established Network Marketing companies still around? I’m talking about Amway, Herbalife, Mary Kay, Shaklee, Avon, etc.
The truth is that most large businesses have a ‘pyramid’ type organizational shape to them. What other shapes would they have? Would the founders/owners or board of directors be at the bottom of their organization structure?
Of course not.
Think about any franchise business – drug stores, auto parts, restaurants, etc. McDonalds is a great example, by the way. Their worldwide organization is enormous, and it exists on so many levels. Still, those levels get narrower and narrower until you reach the top – i. e. Corporate HQ and the CEO. By the way, McDonalds never stops growing.
Another great example is the Catholic Church. Nothing against Catholics, but the makeup is pyramid-shaped, and the Pope is at the very top. That’s not exactly a ‘business’, but you get the idea. Everything’s like that – even a family tree!
The ‘pyramid’ shape of an overall business structure is perfectly normal. Why would you expect anything else?
The ‘pyramid scheme’ smear is silly.
“I am often asked if network marketing is a pyramid scheme. My reply is that corporations really are pyramid schemes. A corporation has only one person at the top, generally the CEO, and everyone else below.” – Donald Trump
Only Those at The Top Earn Any Money
Try being a low-level employee at Walmart, Disney, Amazon, etc.
It’s the same thing.
CEOs of the world’s largest corporations ‘make all the money’ compared to the average employee. But many didn’t start that way. They worked their way to the top or started the company themselves from nothing – often sleeping on the floor and going hungry in the process.
In MLM, you start at the beginning and it’s said that only about 3-5% succeed at doing it for a living. I’d say that percentage is probably about right. Why? Because most people won’t do the work. After talking to a handful of friends, family, and co-workers about what they’re doing, they give up when everyone rejects them.
That’s why I choose to do this business online – and only online. You can develop systems (especially automated ones) that will do most of the work for you. But unless you have the specialized knowledge, that 3-5% is about right.
Let’s face it. Most people are lazy and afraid, in that order. Even the federal government (yeah, them again) says that only 5% of Americans will have enough money to retire. Are they calling the other 95% stupid or inadequate, or that the ‘game of life’ is rigged? No. It’s just the way it is.
So what?
By the way, people don’t like to think either. I’m serious. They don’t like to work, but they don’t like to think either. Why? Because it’s work! It hurts. It burns calories.
You can’t worry about any of that.
To succeed in this business, you’re going to have to be a leader. That means you’ll have to act like one to get those 3-5% types on your team. In some cases, that means you’ll have to do other people’s thinking for them. That’s OK when you’re leading by example because people will tend to copy you – and that’s what you want!
“Everyone who gets involved in network marketing begins on a level playing field. You are not judged by age, background, race, education, or financial condition. And as you help lift others to higher levels, the industry rewards you. It is an inspiring business model, indeed.” -Stephen Covey
Now That You Know the Truth, Are You Still In?
Since you found this article and read this far, I can only assume that you’re thinking about trying this business – either for the first time or trying again.
Now, I can’t tell you what to do about fear. I understand it, but the scary stuff (and the ‘stigma’) is just myths.
Most of the worries or turn-offs can be solved by getting the right knowledge. Having faith and believing in yourself will cover the rest.
If you’re ready, then go ahead and start. Get your business up and running, and do what it takes to build it out successfully. It won’t magically happen all by itself (or overnight). It’s going to take both work and time – and you won’t know everything at the beginning.
That’s OK.
The main thing is to not listen to what ‘they’ say anymore.
Just decide to do it, stay committed, and never stop learning. You’ll be just fine.
Leave a Reply