My opinion is that MLM is nothing but a new term for the classic pyramid scheme. On the other hand, I have recently met some people I trust, involved in MLM, who claim they make a fortune, and even try to prove it to me mathematically. I am still not convinced at all...
What is the truth behind MLM?
The opinion you voice is shared by many. Some have formed it based on their own bad experience and some are just repeating an old public belief.
Today we are in a new era. there is an evolution in many fields and markets and mlm has become one of the worlds fastest growing industries. It offers people the opportunity to take back control over their lives and make a real plan for financial freedom - as opposed to financial "security".
For a person used to the conventional businesses to join an mlm company requires a change in ways of thinking. Change is not easy, therefor this business is not easy. But giving yourself a chance to be guided into this change may give you a great victory on the other side.
you get to choose when you work, with whom, how much you want to earn, you get to travel, to meet new people, to open up to the world around you, to put yourself out there.
Instead of grinding it out for the rest of your life complaining, to actually face real challenges and win. winning in this case means being an individual in control of your time and income, and being part of a large group of friends, old and new, that are experiencing the same.
its a bit like sex. you cant explain it to its fullest in words. you gotta actually do it to understand what it is. and like sex - all parties have to consent.
There's a problem with the classificiations: all pyramid schemes are by definition multi-level marketing, but not all multi-level marketing operations are pyramid schemes.
The most famous pyramid scheme was created by Charles Ponzi (http://en.wikipedia.org/wiki/Ponzi), who took in money from new investors solely to pay off the returns of old investors. It worked like this:
1. You pay me $100 with the promise of a 100% return, i.e., $200 in toto.
2. Another investor comes along to whom I make the same promise, and I take his $100.
3. I take the $100 I got from investor B and give it to you.
Now, in order to pay off investor B, I need to get two more investors. To pay off them, I need four more, and so on, creating a pyramid shape if you draw a graph of the payoffs starting from the top.
There's nothing per se wrong with this; indeed, this is how most welfare programs in the West work. This has not historically been a problem, but now with falling birthrates and shrinking populations, the base of the pyramid is getting harder and harder to replenish.
Pyramid schemes are illegal in the United States. It's easy to mistake a legitimate MLM system for a pyramid scheme: they both have a roughly pyramidal shape, with few winners at the top and a need to keep new people entering at the bottom. The primary characteristic which distinguishes MLM from an illegal pyramid scheme is that an MLM must offer a legitimate product or service.
It is certainly possible for people involved in MLM to make a lot of money. What is not possible is for EVERYONE in the network to make a lot of money. My personal advice from experience in MLM is that you can do quite well provided that you have a personality that is well-suited to salesmanship. I was involved with Amway for several years, and ultimately decided that it wasn't my thing, but left the organization with no sour grapes and respect for the people involved.
DON'T SPEND A LOT OF MONEY TO GET STARTED. A small fee (certainly less than $100) is reasonable; you will have to make that judgment based on the value of the network to which you're being introduced. But a huge upfront fee is a sure sign that the network has no long-run confidence in making money from you, which means they have no confidence that YOU will make money in the long run.
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Check out the MLM first and look at the better business bureau and other non bias or third party business investigators. Now, about the MLM or network marketing concept it is a very solid one. Microsoft, Gillette, Coke and other large to medium companies have used network marketing to build their businesses. In a nutshell we all market for companies when we refer a product or service. If it sucks we tell people it sucks if its good we tell them it's good. Network marketing is a way to position yourself to receive pay for referring a product or service that you use yourself to others. You do not have to sell it. If you choose to sell then you can quickly build your pay to a higher level. But even if you don't sell after time you will build an income. As long as it is a good product or service of course. If Microsoft, Gillette or any other company who's products you use paid you to refer their product because you like it versus paying millions for advertising they are going to save money and they wont have to pay until they have sold product. Then, you make money for referring something you would have referred for free. Does that make sense? I can talk all day about how and why network marketing works. People fail at network marketing for a number of reasons. One that I've heard of too often is they buy a bunch of inventory and then they are not able to sell it. If a company tells you to buy hundreds or thousands of dollars worth of inventory you probably shouldn't work for that company. Bottom line with ANY business you must have a product or service that makes a persons life better. Network marketing is just another efficient way to get products to the consumer. I've included a link at the bottom of this post. I as you may be able to tell I work in network marketing. But, I'm not going to ask to to join me. You'll ask me if you want to know more. Hope this helps. Good luck!
MLM is just a way, a method to get a product or service to the end consumer. MLM, really refers to the way you get paid, multiple levels. The reason this model works really well, is that the mlm (network marketing) company doesn't have to pay for all the "middle men"-no advertising, vendors etc...
There's a lot that goes on to get a product from the formulation to the grocery store shelf. Most people would be surprised how much extra costs go into products before they get them. These cost are non-existent to a large degreee in network marketing. This is why some companies go this route and just get distributors to market the products for them.
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