Thread: MLM Debate

I pretty much think that Shaklee and Amway wrecked people's PERCEPTIONS of what MLM products are. Cultlike practices kind of have a tendency to make me not want to consider MLM products as legit business organizations, but as I looked through my own list above there are some pretty decent MLM products out there.

Originally Posted by Cparsons

MLM is a scam. There's not a single MLM company out there that sells a product that's a good value. They make a lot of money (for the founders), but only provide value to the owner's lives - taking it from everyone else's (including 90% of the recruits selling it for them). Is this business model worth your integrity?

That is simply not true. I'll bet the people that purchased their product found value. You named some great companies, like Avon for example who have repeat buyers. Clearly, these buyers are finding value in what they're purchasing as they keep coming back for more.

As far as "mediocre product" with "fake research", this is such a generalization about the world of products, it cannot even be responded to except that you're approaching life with a Negative Nancy attitude. Seriously, if you think the world is possible, then it is. I suppose I just have a more positive outlook on life than your outlook on business. I can't believe you said "force each person...then teach them how to scam their friends and family." Entering business is a choice and nobody is getting scammed. Haven't you ever noticed the enthusiasm of the Mary Kay ladies? Maybe purchasing the products you mentioned isn't your thing, but it is clearly thousands of repeat buyers route to happiness.

Originally Posted by DeskSnacker

That is simply not true. I'll bet the people that purchased their product found value. You named some great companies, like Avon for example who have repeat buyers. Clearly, these buyers are finding value in what they're purchasing as they keep coming back for more.

As far as "mediocre product" with "fake research", this is such a generalization about the world of products, it cannot even be responded to except that you're approaching life with a Negative Nancy attitude. Seriously, if you think the world is possible, then it is. I suppose I just have a more positive outlook on life than your outlook on business. I can't believe you said "force each person...then teach them how to scam their friends and family." Entering business is a choice and nobody is getting scammed. Haven't you ever noticed the enthusiasm of the Mary Kay ladies? Maybe purchasing the products you mentioned isn't your thing, but it is clearly thousands of repeat buyers route to happiness.

I fully expected some backlash, but my opinion stands. Of course it is a generalization, and there may be one product that is an exception, but the exception proves the rule, not vice-versa.

Due to the compensation structure, products sold through MLM companies have to be extremely marked up, which is why you can almost always find a similarly-effective product for much less money. That doesn't mean that nobody perceives value, surely any time you sell something somebody perceives value, just that this perception is fueled by misleading or flat out false claims made by family/friends to convince you.

"Negative Nancy attitude"... now that sounds like something a MLM taught you to say. I'm not negative, far from it. I simply see through the charade and chose not to participate.

Originally Posted by Vigilante

I pretty much think that Shaklee and Amway wrecked people's PERCEPTIONS of what MLM products are. Cultlike practices kind of have a tendency to make me not want to consider MLM products as legit business organizations, but as I looked through my own list above there are some pretty decent MLM products out there.

This is one of the main problems with the business. Essentially there is a very low bar for entry. You can get involved from anywhere from $100 or less to a couple thousand. You can not get a franchise for McDonald's, Kentucky Fried Chicken, or even Subway for such a paltry amount.

While this is one of the main attractions to MLM it is also one of the main nemesis' as well. Low bar of entry means you will get all kinds of characters, many of which know absolutely nothing about marketing. I am no expert on marketing, but when I got involved in MLM I at least went out and got some books in an attempt to understand what I was getting involved with. I must must have at least 50 books on sales and marketing.

One thing I have learned from all of these books is that if you do not believe in the product you are selling you are up a creek before you even start. This is where I have fallen short. That is not to say there are no legitimate products out there. Tupperware and Avon are a couple of good mentions. They are household names and very few people I know of think of them as scams. Problem is I can't picture myself selling either Tupperware or Avon. (do they have make up to make my beard look younger... lol)

A company called Emerald Passport was very intriguing to me but fell short. They were selling health and wealth information. I believe very strongly in financial education. I am a big fan of the Rich Dad Poor Dad company even though Robert has been caught in some unflattery interviews about high pressure sales pitch seminars. His game Cash Flow 101 and 202 helped me to view money in a way I never saw it before. The game was very expensive (I think I paid $200 for both or somewhere around that). The lessons I learned from it were invaluable though. I would have gladly paid over a thousand dollars. Others may agree or disagree, but knowing what impact this game had on me I would gladly join an MLM pushing a product like this. That is what I thought EMI was going to be. Unfortunately they not only cost several times more than the Cash Flow game, their info was lackluster.

To this day I am intrigued with the idea and have thought about trying to create it myself but i face several problems in doing so:

1. Copyrighted Material: Robert's cash flow diagrams of the rich vs. the poor had an impact on me like no other. I have a bookshelf full of books trying to teach me this same info but it never clicked until I saw this diagram. I would have to reinvent the wheel to demonastrate this info without violating copyrighted material and would risk falling short like many other authors. (Robert G Allen and Wade Cook come to mind. I sort of got the message with Wade, but not fully)
   
   Compensation Structure: I like the simplicity of an Aussie 2 up for it would be easy to program but their is a lot of complaints in the networking community that you do not build a dependable downline thus increasing attrition rates. I thought of a 3 level deep traditional pyramid but it doesn't have quite the same wow factor unless the price is really jacked up.
   
   Value: The people that buy into this thing must walk away feeling the same way I felt about the game Cash Flow. I do not feel I got ripped off. I paid a high price for a silly board game but I feel strongly that what I learned from it was worth every penny. I could not possibly go through with this unless people would feel the same way about this product. Based on the nature of the MLM structure over 90% are not going to make a dime from the MLM, and if that 90% does not get something of value I have no interest in doing this.
   
   This is a Fastlane idea because I would own it, not join it. I have sat on the fence with it because I am not sure that I can solve the aforementioned problems, and even if I did, people would accuse me of being a con-artist or crook simply because their is a large group of people that foam at the mouth at the mere mention of MLM. Ethics are important to me. I would only do it if I felt I was truly helping people.
   
   Excuse the long rant, but I think too many people automatically condemn MLM without knowing jack about it. There are good companies out there but the bad ones far outnumber the good. (at least from my experience) MLMs are very low cost to set up (compared to traditional businesses) and low cost to join. They offer a high amount of leveraged unparalleled by virtually any other source. (If you are the creator you can build a multi-million dollar fortune from just a few thousand dollars, even real estate has trouble competing with that... ...and there is tons of leverage in real estate)
   
   For all of you folks bashing MLM, in general I share your sentiments, but I would tell you to keep an open mind. In my quest for financial freedom I have looked into everything from real estate to stocks to professional sports gambling, and the list goes on. I have found all of them to be legitimate paths to financial freedom. MLM is another path. Like all paths it has its pros and cons.
   
   This site is focused on mostly up and coming entreprenuers. In all of my studies nothing else comes close to this path as far as potential. The downside is that it has the highest cost of entry. I am not referring to money, but creativity, ingenuity, marketing skills, etc. (Process) If you have what it takes to build a Fastlane style of business there is nothing else available that will come close as far as potential is concerned.

Originally Posted by Cparsons

"Negative Nancy attitude"... now that sounds like something a MLM taught you to say. I'm not negative, far from it. I simply see through the charade and chose not to participate.

Nope, Negative Nancy is the label I've always given to anyone who is a pessemist. Usually people with this attitude get depressed a lot and don't trust other people. Because I'm the opposite, it's hard for me to understand people like that. I prefer a smile every day.

You're seeing through the charade you say and choosing not to participate. So...why are you in this forum then? Sounds like participation to me. And sounds like a Sidewalker.

If you wanted to found an MLM company; do they still work?
I wanted to see what the opinions are on the MLM business model from the perspective of the MLM company. Yes starting an MLM is fastlane, but is it still as viable a model than in years past. Did the internet kill the MLM model from a startup perspective? The larger companies seem to be doing very well...but are they actually selling many products to anyone other than the people who are signing up to sell them? Im not in MLM so im sure there are some companies that dont frontload you. It seems that ecommerce would have put a major dent in their sales. Is it still a viable model to pursue, and company to start, without implementing the shady tactics? In short, with the internet is there any reason for MLM's to still exist and it is possible for them to prosper?

Originally Posted by DeskSnacker

Nope, Negative Nancy is the label I've always given to anyone who is a pessemist. Usually people with this attitude get depressed a lot and don't trust other people. Because I'm the opposite, it's hard for me to understand people like that. I prefer a smile every day.

You're seeing through the charade you say and choosing not to participate. So...why are you in this forum then? Sounds like participation to me. And sounds like a Sidewalker.

This forum isn't dedicated to MLM companies - it's dedicated to the fastlane via BUSINESS. I own and operate a business that I hope to make fastlane, but will never engage in MLM activities.

I am an optimist, but if you were in prison getting raped, I doubt you'd be smiling. At some point, you need to look at reality and say - "Hey, this situation sucks. I don't want any part of it." That wouldn't make you a pessimist, it would make you capable of rational thought.

I think the main problem (both tactically and morally) is that in MLM you don't provide value. You don't bring anything to anyone. Sure there's always some sort of product, but no one gets rich selling the products. You get rich getting a big "downstream" of new suckers to pay the upfront fees to join. It's a big pyramid scheme that relies on other dumber people below you to keep shoveling money onto the pyramid.

Originally Posted by ^eagle^

I know better than to argue the point with anyone here. I think the MLM is better than being a corporate slave. and the enviroment of people wanting to help each other is a lot better than corporate slavery also. So its a step in the right direction.

And I know I am still a corporate slave to amway. But the enviroment is a t least one I can thrive in. An enviroment that my current corporatie employer has left behind in favor of the throw the guy under you under the bus enviroment.

As I have stated this is an exercise in NETWORKING and at the same time make a profit. Big or small. That is the more important point.

I find people find me online as maybe argumentative or brash or unrefined or whatever but in real life most people like me. Its weird that way which is why I chose to exercise my networking as I have little in the way of doing that in the real world. The virtual world allows us that extra bit of anonymity to be a little more bold than we normally would in the real world or a little more anonymous too. And I need practice there . this is not and end but a means.

As you yourself have stated MJ you were in MLM yourself. Aside form the fact that it did not make the millions you had hoped for. (I am only working to replace my fiance's income which is half of mine at my JOB) can you honestly say you LEARNED nothing from the experience about interacting in the real world doing MLM?


Not sure if this belongs in this thread as it is way off the topic of links to fastlane businesses LOL

Good Luck. Hate to quote a cliche but sometime the situation just begs for it...Experience is the best teacher in some cases.

Interesting read, from a sociological, philosophical and psychological perspective. There is a lot of vitriolic sentiment expressed in this thread that I would assume is the result of personal failure (or other negative experience). A casual observer would seldom state such absolutes (all MLMs, None have good products, all scams, crooks, etc) in his argument unless he's just ignorant or a dick. For future reference, you might want to soften your words, as this type of rhetoric tends to drain one's arguments of any shred of credibility.

If you'll take note of MJ's comments, as well as a few others, he acknowledges the other person's good impressions, without compromising his own position. But he doesn't come across sounding like an arrogant bully.

Just an observation. Take it or leave it.

Originally Posted by Jill

Interesting read, from a sociological, philosophical and psychological perspective. There is a lot of vitriolic sentiment expressed in this thread that I would assume is the result of personal failure (or other negative experience). A casual observer would seldom state such absolutes (all MLMs, None have good products, all scams, crooks, etc) in his argument unless he's just ignorant or a dick. For future reference, you might want to soften your words, as this type of rhetoric tends to drain one's arguments of any shred of credibility.

If you'll take note of MJ's comments, as well as a few others, he acknowledges the other person's good impressions, without compromising his own position. But he doesn't come across sounding like an arrogant bully.

Just an observation. Take it or leave it.

I probably fall into this camp... Okay not probably - definitely. I admit I was stirring the pot a bit by being extreme.

I do believe that the structure of MLM's makes them more likely to utilize poor ethics, but it's certainly not every single one.

In fact, since my original post my wife and I joined Melaluca, which is a MLM company (we don't sell it - just buy the products), and my wife also happily bought some stuff from a Pampered Chef party. Both of these companies provide good products for a fair price.

So I'm not completely against MLM's. I have no interest in selling their products personally for the reasons that MJ pointed out in the book, but when the products are worth it I have no problem buying them.

Originally Posted by cashflow3000

There are 2 significant problems with nearly all MLMs.

1. They are promoting a business opportunity to people who have no business skills or business ownership experience.

2. Their products are over priced to support their pay plan.

Bingo.

Originally Posted by Jill

A casual observer would seldom state such absolutes

There are no absolutes -- there are exceptions to everything. There are rich MLMers. There are rich people with jobs. There are rich lottery players. I like to think in terms of probabilities ... if a passionate Fastlaner might get rich at an odds rate of 1 in 50, a passionate MLMer might get rich in 1 in 1,000. Both events occur.

Originally Posted by Cparsons

Both of these companies provide good products for a fair price.

For any MLM to grow and survive, they really need to have products that work exceptionally well, and frankly, many of them do.