Discouraged and uncomfortable

I just got off the phone with my friend who is in Market America. She’s the reason I joined here in the first place – right after she and her upline tried to recruit me and just as my friend was signing on the dotted line.
I told her then that it was an MLM and that I wasn’t interested for that reason.

Anyhow, we were just catching up on the phone for a few minutes and suddenly she started talking about her ‘business.’ She said they recently partnered with Google.

Then . . .

She launched into a spiel that they are not an MLM and they must be a legit company if Google partnered with them. They are not a scam.
They are not an MLM. She and her hubby are making $1500 extra a month at easy payday loans they are not an MLM. She’s meeting with a girl this Thursday to “help” her [do what, I have no idea] and this girl is not even in her ‘network’ – she works with people all the time who are not in her ‘network.’ Everybody helps each other. They are not an MLM. She’s very busy.

I wanted to ask her:

One of the reasons she started with MA was because she doesn’t have enough time with her kids and she’s tired of running around. Now, her schedule is filled with MA stuff.

So, that begs the question that was forming in my mind, but I shut up.

I didn’t ask if she was doing actual bookkeeping on the money to get to the $1500 – how much is going out, I wondered. I kept my mouth shut.

What expensive crap are they buying – I know they buy some powder or something.

I kept my mouth shut.

We were never the best of friends and haven’t known each other that long, but still . . .

I feel so weird now.
And I wonder where that all came from – all of a sudden!

You’re missing a logical contradiction in your own statements

You’re aware of what kind of forum this is, yet you seem to expect us to say some MLMs aren’t bad. That’s like going into an AA meeting and asking, “What kind of beer do you think is safe?”

We’ve all been burned by MLMs, in one way or another, and in many cases hurt deeply or lost loved ones to the brainwashing that occurs. We regularly see people that come in and say they’ve found the perfect MLM, yet not one has met Paine Webber’s challenge of proving that they’re making good money in their MLM. All it takes is the *business* part of the tax form — no personal financial information, just the business info. We’ve had people come in, at least several every month (and more that Paine doesn’t approve for posting) that keep saying they’ve found the real thing. Yet not one has ever come back to prove they’re making a profit.

Now, think about it. Look at it and think about what people have said here. If, in 6-12 months you’re doing well, and could prove it with just the business part of a tax return (I think it’s Schedule C, but I don’t remember), wouldn’t you want to come back in here and say, “I told you so!” — wouldn’t you want to prove us wrong and see if some of us join you?

Yet not one of the many, many people who have come in here to brag about their MLM has ever done that.

In the words of Led Zepplin, “Oh, it makes you wonder.”

I’m not trying to attack you. My point, in many of my posts, is to jar people to think about things from another point of view. Think of it this way: if I can be super critical of a situation and point out all the flaws of it, and it still stands up, then you figure it is likely valid. I’m poking holes in the MLM structure. If I can actually poke holes, then it should be avoided in terms of investment (in time and money) and should be examined much more closely.

Think of it this way: do you just go out and buy the first car you see, or do you research it? Do you compare prices and packages at different dealers? Do you look at both sides of the story, or just run out and spend $20,000 or more on whatever someone says is good without looking into it? When most people get married, do they just grab the first person they can find who says they’re a good partner and marry them for life, without taking time to figure out if that person is telling the truth? Both of these are serious decisions, and so is picking a company that one hopes to be affiliated with for years or more.

Now, one more point about MLMs in general — and just one for now, but trust me, I’ve got many more.

MLMs say they have good prices because they cut out the middleman. They sell straight to you. Step back and look at that. Let me use the local grocery chain as an example. A farmer grows the tomatoes, then sells them to a distributor, who ships them across the country, where they’re stored at distribution centers, and from there, trucked to the store. The farmer creates the product in the first place, which means he adds value to what you’re buying. Without him, it’d be just a seed, dirt, sunlight, and water. His work changes the raw materials into a plump, juicy and tasty treat. He has earned that money he gets when I buy a tomato. Why? Because without him, there’d be no tomato.

Next, look at the “middle man”, or the distributor (and remember there could be more than one middle man). What does he do? He takes it from the farmer and gets it to the store. That costs money. The truck driver has to be paid, the truck has to be maintained, the gas and oil have to be paid for. Without him, that luscious tomato would be sitting in the farmer’s field or in baskets waiting to be shipped.
The “middle man” does a good job of taking a tomato that was grown miles and miles from me and making sure it is available at my local grocer, two miles down the road from me. As a consumer, I am paying him money because he has added value to the product. Without him, I’d have to drive to a farmer’s market, far away from me, and buy tomatoes.
It would cost me much more to have to drive all over town or out of town to get all my produce than it does if it is shipped in bulk to my store. The middle man adds value to the product by making it easily available.

Then there’s the grocer. I don’t need to go through the details, but the grocer provides, in one place, everything I need, cleaned, verified (in general, unless it’s spinach!) as safe and presented so I can examine the produce and take what looks good. Again, by providing a place where I can shop in my neighborhood, the grocer is adding value to the product.

Now look at an MLM. I’ll take the example I know: Quackstar and my ex-girlfriend (called “Dawn” for convenience). Dawn had her friend’s sister and husband above her, and the husband’s father above him, then an Emerald, then a Diamond named Bundy, then another stoned person, er, Diamond named Winters above him. I don’t know for sure, but have reason to suspect there was at least one person between the Emerald and the first Diamond. I don’t know if there were any other levels involved. I do know Winters was under Bill Britt. That means when if I bought something from Dawn, and I pay her, then, even without any levels I haven’t named, the profit is shared by her, her friend’s sister and husband, the father, the Emerald, two Diamonds and one guy high up. Counting partners as one person, that means *SEVEN* people get paid on that one product.

If I went to Dawn to buy, say a laser printer, first, I can’t dicker (last time I bought printers, I took in the ad from the competitor and did some other fast talking and on 2 printers, I saved, literally, about $100 on what should have cost me $385), which means I’m paying list price, and SEVEN people split the profit. Not one of them ads value to the product. I could have just gone to the Office Max or Office Depot (or even Staples) website and ordered it. I would have gained no benefit by having to order it through Quackstar and I would have lost about $100 on both printers.

The dickering, by the way, will be a big factor when it comes to bigger items. For instance, I know you can get cars through Quackstar. While there are those that can dicker better than I can, in the past, I’ve been able to save from 1/10 to 1/6 on a car price by dickering. Can’t do that with Quackstar and the extra cost is not made up in what I get back. My business is starting to do really well, but I’m still not going to spend an extra grand that I don’t need to. I can use that same money on CDs, DVDs, or several new bikes. Better that it stays with me than someone else.

In this case I’m talking about a general retail product that they make available. If you’re dealing with a product specific to an MLM, then instead of adding a profit for the manufacturer, some profit for the middle man, and some for the retailer, that same profit is split, in this case, seven ways — and not one of them does a damned thing to add value to what I’m buying. Not one is doing anything to benefit me that makes it worth my time or money to buy from them and not from a local store or on the web.

Studies have shown that in most cases MLM products cost something like 30% than comparable products else where. Why? Because in a real business (yes, real, as in legit), only people or companies that add to the value make money on the product. In an MLM, anywhere from 3 to 10 or more people are making a profit for doing nothing that helps the customer in the long run. True, there is no middleman. Instead there are a number of people who are getting money for doing nothing. I’d rather have a middleman. At least he earns his profit.

Personally, I’m not sure ALL MLMs are bad

I have yet to run across a good one, but to say all of them are bad indicates, at least to me, a knowledge and experience beyond what I’ve had.

The reason that MOST MLMs are considered bad is that they seldom if ever deliver on their claims, either in terms of the income potential or the benefits of the products they sell.

* Some MLMs are out-and-out frauds.

* Some have been investigated and shut down by the FTC and other law enforcement agencies.

* Many have consumer and criminal complaints lodged against them.

* There have been deaths and injuries resulting from “snake oil” products sold by MLMs. Some of these have been a direct result of the product itself, while others have been the result of an MLM product interacting with another product being taken by the customer.

* Some of the MLM companies sell legitimate products but utilize motivational groups employing pyramiding tactics to generate hidden income. There have been death threats utilized against those who would reveal the existence of these hidden motivation pyramids.

These are just a few of the complaints lodged against the MLM industry and its major players. So the big question here would be:

How bad does it have to be for you to consider it a bad deal for those who would get involved?

Okay, there *may* be one or two good MLM opportunities out there. The problem would be finding it and proving, to your own satisfaction along with anyone else’s, that it was as good as its claims.

Thank you, but I can do without the sarcasm

I do realize what kind of forum this is and what you guys believe. I came here to get some different opinions from folks who are not curently in an MLM. I am not here to convince anyone to join anything. I guess my question should be, why do you think ALL mlm’s are bad?

It’s nice that you have definite ideas of what answer you *wish*

for on a forum that you have just joined. It’s a tad on the arrogant side – did you bother to read any of the files? Did you check the archive of postings? You would have found the answers to your questions in there.

As for it being a good concept. What is good about it? It is good for the originator of the product who wants a cheap and easy sales force that has no overhead. I fail to see what’s good about the idea from anyone else’s view. There is nothing about it beyond this that makes any sort of economic sense at all. There is no need for for a hierarchal distribution system so why do you need all the “middle men”? Not to sell product that’s for sure – but sell something else.

It is a garbage way to do business. It is a great way to suck money out of marks.

I allowed your post onto the board

because it looks like you have some important questions and perhaps some doubts about MLM. It appears to me that you feel you’re not getting straight answers from your sponsors in the MLMs in which you’ve been involved, and you’re getting highly emotional responses from those who think MLM is a scam (and don’t have the benefit of a real interaction with folks who can control their outrage).

There are people here who, like you, have een involved in more than one MLM. There are people here who have been out of MLM for many years, and others who have only exited their MLMs recently. I think it’s fair to say that the kind of response ex-MLMers will give you is directly related to how long they’ve been out, how much their involvement cost them and how well they’ve come to terms with it.

There’s a LOAD of anger associated with it, and I encountered some of it while I was still in Amway/Quixtar. So I completely understand the bewilderment of someone who still believes in it.

The bottom line, though, is as Hal has already stated: VERY few people make any money in MLM, and a lot of those who do have to give up their ethics to make whatever profit they make. I saw some of that while I was in, and it played a role in my decision to quit.

Are there ANY MLM companies that provide a good opportunity for those who would get involved with them? I’m not sure that the answer is an unequivocal NO. There are companies that favor direct sales over recruiting – Pampered Chef, Discovery Toys and Tupperward would be examples. There are still negatives to this approach for the involved reps, but at least there are real sales to real customers, as opposed to the “buy-from-yourself” model that is promoted in many groups.
It’s still hard work for little more than part-time pay. But at least it’s honest.

Most MLMs do not bother to adhere to the restrictions imposed by honesty. Some of them walk a careful tightrope between legal and illegal. The fact that an MLM exists legally doesn’t mean they operate ethically or that the law will not eventually catch up with them. Some have already been caught and shut down.

There are thousands of MLMs out there today, and most of them are only there to benefit their founders. You’re welcome to keep looking, but for me personally, the effort of looking is not worth the probable result. Even if there is a beneficial MLM company that sells a worthwhile product, it wouldn’t be worth the effort to get over the MLM stigma in order to sell it.

There are simply better ways to make a living – and to spend my time and energy.

Before I write anything else, I notice that you feel MLMs are good

You do realize that you are writing to a group of people who have been burned by MLMs or have seen loved ones burned by MLMs or have lost loved ones to MLMs, don’t you? We also state, from the beginning, in files you were asked to read, that we make no pretense of giving MLMs a fair chance — we regard them as bad. Period.

Having said that, do you still feel you’ll get favorable comments about MLMs from us?

My name is Wayne

I have been part of a couple of MLM’s in which I have lost money. I believe that the concept is a good one, but the problem with them is that most folks who sign up with MLM’s do not work the system. I also do not think that many of them like Xanga that relies on some one buying the same product over and over are doomed to failure. I took part in Amway, and another one called Dreamchievers.
My question is this, it there ever a product in which a MLM will work? I am currently working yet another MLM. The difference with the one I am working with now, is they do not try to convice you that you will “get rich quick” and I have been an associate for less than 2 weeks and have already more than doubled my investment. That alone is a big one for me, as with the other two, I never even recovered my investment cost.
Anyway, I am here to gain some insight from those who have worked MLM’s and have honest opinions on them. What I am not looking for is name calling and the irrational bashing that is on some of the forums.

You’re not wrong

given the emphasis most MLMs place on recruitment and “building your business.” If the focus was truly on having a quality product, building a client base and ONLY recruiting new IBOs when the potential recruit approaches the rep (rather than the other way around), people would get the sense that the business model is legitimate and one’s resilience wouldn’t have to be so high.

Quality products delivered with quality service would make being a rep easier. Not easy, just easier.

It’s battling all the negatives that make staying with it so tough and creates such high attrition.

Or am I wrong on that?

So if MLM sales takes more resilience and includes more rejection than normal sales, doesn’t that mean there will be a lot fewer people who can make progress in an MLM than in other businesses? That would limit the pool of your potential downline to a very small percentage of the population since not many people can do well at any kind of sales in the first place.

That little voice is your intuition

your sixth sense, fright/flight, self preservation. I am a sales professional and will tell you that sales is not for everybody. And MLM sales takes that much more resilience in the face of rejection. And if you want ‘out’ and somebody is going to great lengths to convince you to stay IN, you know they want what’s best for THEM and not YOU.