Today there are so many Multi-Level Marketing companies around the globe that it’s too difficult to count. They are new ones springing up every month and they all have interesting variations of downlines or matrices. There are companies offering nearly every imaginable product or service on the planet. However, is there truly a network marketing scam? Find out in this MLM review. Just to be clear, network marketing and MLM are synonymous terms. Network marketing is the more socially accepted term today.
Occasionally, people will refer to this industry also as direct sales. Since many MLMs have also opened up opportunities for affiliate commissions, sometimes affiliate marketing can also be associated with the supposed network marketing scam. However, affiliate marketing is generally different in that you can refer people to businesses and services and receive referral fees from these programs that have nothing to do with MLM. Why does multi-level marketing get the scam rap? Are these truly pyramid schemes? An illegal pyramid scheme is a system that does not allow lower level people to make as much money as higher level folks. This is definitely not an illegal pyramid. The FTC sought to prove Amway was an illegal pyramid back in 1972, but a judge ruled otherwise.
Network Marketing Scam – Is Making Money More Important than Offering Value in MLM?
One reason some people claim network marketing is a scam is that they feel there is less focus on the products and services than the opportunity to make money. The truth is that the MLMs that don’t last usually have this very problem. Of course, they may also fail for various other reasons, like poor marketing, commissions, unappealing niches, or heavy competition. If you look at the most successful multi-level marketing companies, they have excellent products and services, various strong opportunities for distributors to get paid, quality training and support systems, and smart marketing. The reason the top distributors are so successful is because of their focus on providing value to customers and their downlines.
Network Marketing Scam – Distributors Are Not Highly Trained Professionals?
If you look at any sales jobs or occupations, most businesses first seek out people who are skilled in marketing and dealing with customers. Then they train and prepare their sales force to become professional in representing their products and services. People who despise distributors also commonly dislike salespeople of all types. The truth is that the most successful distributors are highly skilled not only in marketing and networking, but also have much knowledge and experience in running a viable business.
In fact, these folks have tremendous opportunities to mentor and inspire others to become successful. If you compare any kind of sales with professions like doctor, lawyer, engineer, or accountant, the latter may have gone through a specialized and formal education program. But some of the most successful formally educated professionals often own their own business and have to sell themselves to the public anyway. In any job, we all must sell ourselves to our bosses and employers. In the end, academic professionals are no more noble or professional than good distributors and the MLMs they represent.
Network Marketing Scam – Are Products & Services Overpriced?
This may be the one valid argument that negative viewers have toward MLMs. It’s true that products and services are marked up in order to pay commissions for several levels in a downline. The counter argument from these programs is that they have a higher quality product than ones sold in retail stores, or higher quality and more in depth services than those available in the traditional venues.
For example, you can go to a health food store to buy a multi-vitamin usually for a lot less in price than you can through a distributor and their network marketing program. But that doesn’t make it a scam. As long as people are willing to pay a premium because they perceive the premium value, this is completely legitimate and ethical. The buyer should do their own due diligence to discover if they are getting their money’s worth. Personally, we love consuming many high quality products and services from MLMs and we are willing to pay for that higher quality we perceive.
Network Marketing Scam – What About the Hype At Seminars & Conferences?
One aspect of selling that is important is attending training seminars, awards ceremonies, and social networking conferences. From these events, a person can learn some valuable lessons and build some strong partnerships. It’s important to go and develop through various events. The one thing we wish could be toned down is the hype that goes on at some of these events. On the one hand, celebrating success and getting the motivational energy from others is quite helpful. But sometimes these meetings come across a little cheesy or even fake. Just beware that this sometimes happens and try to overlook the hype and focus on the substance of why you are there.
Network Marketing Scam – MLM Review Summary & Final Analysis
The corporate world is actually very similar to multi-level marketing. The top executives of companies make much more money than the middle managers. Middle managers usually make much more than general employees. What’s worse about the standard corporate world is that employees trade time for wages. They may receive some nice benefits like insurance and retirement plans, but they don’t have a great opportunity to gain financial independence.
On the contrary, network marketing offers unlimited career opportunity, ongoing training and mentoring, complete autonomy and independence over your own business, and the opportunity to build a network as big as one desires and works hard for. Add in the fact that there are tremendous tax deductions for entrepreneurs and huge incentives and trips to reward success, and it’s hard to argue that this kind of business is a scam or a joke.
If you are considering this business, understand you will only be as successful as your ability and effort to market yourself and your products and services. If you hate sales, you will very likely fail. However, if you will be brave and noble and serve others first by reaching out and offering good solutions that fit their needs, you can be truly unstoppable. If you will set aside your fears, especially worrying what others think of you, you can do very well. A word of caution to those who call old friends they haven’t seen in years. If you ask them to hear about your business before reconnecting your friendship, you will turn these friends away. Build trust with people by being genuinely interested in them and their interests first and foremost. Only then will you be respected and admired and ultimately be able to open lines of communication about your business.
No one cares what you do or what you know until they know that you care about them first. Learn this lesson and work especially hard and smart in the first few years and the business will build momentum and carry you forward for many years to come. Always give more than your customers and partners expect. Always be honest and forthcoming. Your integrity is the only way for lasting success. Build the kind of reputation that great legends are made of.
Do you have personal experiences with any network marketing scam you would like to share? Do you have a personal MLM review that would benefit others? Please share your comments below.