MLM (Multilevel Marketing) in 2022- Scam or Pyramid scheme?

Published by rkgiree999 on

Introduction

What is MLM?

MLM is a pure selling business model which deals with the proper use of motivation and selling skills of an individual. This industry completely destroys the concept of Traditional Business. Because Direct Marketing is a way to sell a product directly to consumers other than wholesalers and sellers.

Difference between Affiliate marketing, SLM, and MLM

Network Marketing is the mother of MLM, SLM, Affiliate Marketing, and Direct selling. All these techniques use the network or social behavior of people as the spine.

In Single level marketing and affiliate marketing, you have to completely rely on your direct referrals only for income. But in the case of MLM (Multilevel Marketing), you can earn from the network that you have made and the network of networks that your referrals/downlines make.

Understanding the concept of MLM

expanding network of people

You must have one friend who is working as MLM networker. If so, You may know that these guys are always in search of downlines or partners.

In MLM, Company issues an agent a certain percentage of commission if someone accepts his offer to affix the company. At first, to connect with the company he should purchase the product. Let us assume he joined the company. Now, from all the member who joins to the company as his offering, the agent or upline will get a commission. After reaching a certain business volume, the company will gift you.

Is network marketing pyramid scheme ?

It’s like a tree diagram of what primary level students are studying in mathematics.

For example, You will be my downline If you join the company on my offering. Now, I am your upline. From all the networks that you will make, I will get a certain percentage of commission.

Thus the one who is at the top earns more money and the down one earns no penny at all.

To earn the money, the man at down must make someone accept his recommendation. Otherwise, he can’t get the promotion. MLM and Pyramid Scheme are similar.

How to know if the company is running Pyramid Scheme?

Companies running pyramid schemes do not provide training and seminars to their agents regularly. Also, Uplines do not target on development of downlines.

Most of these companies do not make products themselves. They will only focus on profit and more profit.

Points that should be considered before joining any MLM company

Before joining, be sure that there is the provision of law related to MLM, Network Marketing, or direct selling in the place/country where you will expand your network. MLM is banned in Bangladesh, Saudi Arabia, and most Islamic countries.

Join the company having the products that we use in our daily life. Don’t join the companies like Clothes selling companies.

MLM and Network Marketing industries are commonly known for fraudulent activities, scams, and pyramid schemes. So, don’t join the company without proper research.

Pros and Cons of MLM

Pros

  • Leadership Development.
  • Development in personality, personal development, and increase in knowledge.
  • Also, you have chance to get ideas from business persons.
  • If you become successful, you will have large earnings.
  • High Acquaintance (Contacts) with peoples.
  • Respect in Direct Selling Industry.
  • You can get free life-changing seminars.
  • Because of above points, MLM may change you totally.

Cons

  • If you became unsuccessful, You can’t get back your time.
  • Low income at the beginning.
  • Hard to struggle.
  • You may lose your friends and relatives.
  • To be successful, you may have to wait for a long time.
  • Any decision of the company will impact you directly.
  • If the company flops, you may have to start again with another one.

The amazing part of MLM after you join

  • Everyone will motivate and help you.
  • Your upline and great uplines treat you very nicely.
  • Uplines and company will provide you free life-changing seminars.
  • After passing some time on this industry, your behavior and thinking level change automatically because of the arora of the people around you.
  • Your thinking will be shifted from Job to Entrepreneurship.
  • If you have any problem, your upline will help you.

How to get success in MLM?

  • Make your plan and strictly follow that.
  • At starting, ask your upline to help you with prospecting.
  • Also, Make a list of 40 prospects for a week.
  • Please ! Call at least 5 prospects every day.
  • Once you have mastered prospecting, prospect everywhere.
  • Don’t think anyone is weak because he can be your greatest diamond.
  • Try to train your downlines yourself to make them a good leader. So that, you can focus on others.
  • Learn to give a proper speech according to the psychology of a person.
  • Make good relations with your uplines because they are the ones who will help you to be established on MLM industry.
  • Since, seminars and programs will help in your overall development, attend them.
  • Talk to your team every day.
  • Don’t be sad if someone doesn’t accept your offer.
  • The more you failed, more the stronger your skills will be.
  • Never get angry with your team because your team is going to decide your income.
  • If you can, try to prospect one who is well reputed and has a lot of followers.
  • If you feel weak watch motivational videos on YouTube.

Conclusion

MLM is not bad itself but some people related to this industry are making it worse. In my opinion, it’s better to invest part-time in MLM rather than spending the whole day on it. I am seeing many people who are investing their money and time on MLM initially and leaving it after a certain time. So, be determined, on what you want to do.

FAQ

Can someone under 18 do multi level marketing?

It depends upon the terms of MLM companies, and laws of your state or country. I think it’s better not to involve in MLM if you are under 18. I think no one i going to buy a product from a child. Peoples under 18 in Asian countries like India are involving in Network Marketing.

What usually happens to the victim after a failed MLM or when they realize they’re being scammed but had no chance to recover?

Do you mean financial recovery or Mental recovery? If you are talking about Financial recovery, then you are not going to have millions of dollars invested into an MLM company. But if you are talking about mental health then you will break out. Just visualize, You have invested your 2 years in MLM and that company came out as a fraud. It will demotivate and make you mentally frustrated. If you have been into a company providing you training and personal development opportunities, your 2 years are not wasted. You can move on.

How many MLM companies has Tom Chenault been in?

Why does it matter? You are you! Some may achieve a lot in one MLM company on the other hand some may be involved in a dozen of companies. Don’t get into other stories. Make your own story. Believe in you, Choose the right company and bang on.

Can a successful leader be fired from MLM if their doing illegal sales?

Yes! No one is greater than Law and remember that company is always superior to any of their agents.

Percentage of women millionaires from mlm?

Only less than 5% of total humans involved in MLM can get success and less than 2% can be happy with their earnings through MLM. Well, As per studies conducted by NRCSB, only 1% of women are millionaires evolved from MLM.

Also check, How to achieve success in Network Marketing

Don’t Miss, Is network marketing illegal in Nepal?


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