Is network marketing evil?
This question hearkens back to the days of old. Back in ancient times when we tried to decide if Miller Lite was less filling or tasted great. I’m not sure that the debate was ever settled.
When it comes to network marketing, the naysayers claim that it is a scam and that it can’t work. The MLMers counter by saying that everyone who comes to network marketing has an equal chance at success. I guess we will always have arguments on both side of the issue.
Before I examine the naysayers claims, I must tell you that I am in network marketing. My personal opinion, on the matter, is that both sides make good arguments. I will say that if you are a network marketer and you dismiss all of the arguments of the naysayers, then nothing will ever change. We will always have a success rate of .016% who reach the top level and that is being generous.
With such abysmal success rates, I’d like to see things change!
What the naysayers claim
The most often heard claim of the naysayers is that network marketing is a scam.
Merriam Webster defines scam as “a dishonest way to make money by deceiving people.”
There are many distributors, in their quest to make millions, who are dishonest to the point of lying to prospects about their chance of making money in MLM. Making false income claims is one of the things most often investigated by the FTC. I’m sure that there are hundreds of thousands of honest network marketers who would never do anything like that.
They also say that MLM is only legal due to the 1979 ruling in the FTC v. Amway.
In this ruling, the judge set some fairly strict rules that all MLM companies must adhere to. Chief amongst them is stated in this section of the ruling:
The “70 percent rule” provides that “[every] distributor must sell at wholesale and/or retail at least 70% of the total amount of products he bought during a given month in order to receive the Performance Bonus due on all products bought….”
The naysayers counter by saying that there is no real oversight agency for the MLM industry and the MLM companies routinely ignore these rules.
Is that true? Do the MLM companies ignore these rules? You should ask yourself if your company tells you that you need to sell 70% of the products that you buy, every month to people who are not distributors. Is your MLM in business to sell distributorships and make their money when those distributors buy the products to stay qualified to earn their commissions and bonuses?
They say that network marketing in a pyramid scheme
This is probably the second most often heard complaint from the naysayers. It’s not completely wrong. The structure of most businesses is a pyramid and network marketing is no different. The traditional corporation has 1 person at the top, who runs the business and as you go lower into the structure you find more and more people. The compensation can be astronomical, into the millions of dollars at the top and as you get to the lower levels you find people who may be being paid minimum wage.
The difference in MLM is that the at the top level you can find dozens or even into the hundreds of people making a lot of money. The same thing happens to the lower levels of any MLM company. The earnings decrease until you get to the bottom level and you find a lot of people who are actually losing money.
These are but a few of things that the naysayers are saying about our industry. If we are honest with ourselves, then we have to admit that they do make some good points. If you are going to dismiss these complaints as being lies or wrong, then things will never get any better.
I will be discussing other things that the naysayers are claiming in future articles.
Please think about these things!
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