27 Is Network Marketing Business A Scam?


Network Marketing
One day, a friend from the past has resurfaced from the unknown. One message popped out on Facebook saying Hi, how are you? The next day, a mini chit-chat, and then a text message, then a phone call, then before you knew it, he's selling you something. The worse part? He kidnapped you for what appeared to be a product presentation.

But wait, there's more!


He's now recruiting inviting you to join his networking company as he works his way up in the pyramid ladder and earn a great profit, thanks to the commission should you decide to join in.

The first time I was invited for such product presentation, I wanted to beat the person who asked me to come, seriously! I was mad and upset that I had wasted my time listening to every sales pitch I knew nothing about. Why not? I trusted him that I'd go because I had his word that I can earn part-time income as I do IT-related stuff.

Viola! I was instead bombarded with a bunch of people talking the same stuff! It's like a maze filled with salespeople from every corner! It would have been a different story had he simply told me the truth.

I understand why he had to lie. He knew, like most people, that I won't come if I learned what's installed for me.

Have you been there too? All you'll hear is people saying this and that. Bill Gates did this, Henry Sy is using that, Jordan sells these, Bo Sanchez owns McDonald's (you know that's a joke, right?) and the list of the rich and the famous goes on.

It's annoying when all they do is borrow credibility from known investors and rich people without actually even knowing what those people do!

But since I take a lot of pride on what I know about investing, my mind was sealed enough to believe that a network marketing company would ever be legit


 
Besides, after all the news about pyramiding scams, it's pretty safe to trust myself to be the last person to join an MLM or Multi-Level Marketing business. As Dan Brown best puts it, We all fear what we do not understand.

Since then, every time someone approaches me and I smell anything that has to do with MLM, regardless of how beautiful their product is or how attractive their package appears or how trustworthy the person looks, my answer has always been NO!

But one thing kept bothering me all those times.

And I'm sure you've asked it too!

Are all network marketing companies scams?

Scam
I've resolved to answer this question for both of us.

Shame on me, the answer is NO.

Come to think of it, but asking that question is like asking Are all Miami Heat fans die-hard fans? You know the answer is No. Because some come-play-offs-time NBA fans are just product of a bandwagon hype created during such stretch. 

Likewise, many people simply opted to join the play-it-safe bandwagon mentality created by fear of losing money and be a victim of scams. So unless people dismiss the myth that all network marketing businesses are fake, it would always be a difficult challenge for them to understand the business.

The first thing that actually opened my mind about the truth was actually the same person that thought me about the Stock Market. So out of respect, I listened to what he has to say about MLM. He did not recruit me, mind you. He simply explained how such opportunity could become a great source of income!

However, many people, including me, are skeptic about network marketing companies because of a number of reported scams reported here and abroad.

Network marketing is actually a good business.

Aha!
Good would actually be an understatement to how great and successful a person can be in this business. A more accurate word would be life-changing.

It's actually the owners or the businessmen that either makes it good or a scam. That's why you should do some research first before investing, regardless if it's an MLM or not!

Think of money. They say love of money is the root of all evil. But smart people will tell you that lack of money is. Robert Kiyosaki, an investment guru, said that money is neutral. It's actually the purpose that makes it good or bad.

Even so, people are still clueless of how great the opportunity can be. 

So what's network marketing?

Network marketing or simply MLM (Multi-level Marketing) is a business process by which a company moves its products to the consumer by means of direct selling.

The reason?

Lower cost of products.

Multi-Level MarketingProduct movement involves a lot of money. So if a product is to be moved from the manufacturing plant to the warehouse, then to the distributor going to the supermarkets, and finally, to the retailers to the customers, these movements alone will make the cost of the product to be more expensive because for every hand it goes, its price will increase because of its markup value. 

Let's say a company sells bottled water. The company sells each bottle at 10 Pesos. Now if the company would use the services of a distributor, each bottle would now be sold at 12 Pesos to the stores. Finally, the stores will decide how much will they add to the price for each bottle.

Prices would go up since a distributor would need to earn profit from moving the products, just like stores would need to earn by selling their products!

In addition, companies actually need to pay big stores in order to display their products (Yes, you need to pay them to sell your products on their store!) Lastly, the one thing that makes the product really expensive -- advertisements. Thanks to the hype of commercials and endorsers, consumers are heavily priced because of them! Do you know that we, the consumers, are actually paying Kris Aquino, Pacquiao, Anne Curtis and all the product endorsers for all their TV, Radio and Billboard ads? How come? It's simple, the marketing cost is added on the product's price.

So if we remove the mentioned factors out of the business equation, it will cost the company a lot of savings and thus, allow them to sell their products on a cheaper price.


- o0o -


Many dreams have already been fulfilled since MLM was introduced. From cars and properties to travels and investments, this business has significantly afforded successful marketers their life-long dreams many of us have always wanted. 

Yet it takes people who can think out of the box and go against the conventional wisdom to think and be bold to be successful in this kind of business:

Donald Trump Over the summer of 1998, Donald Trump, a famous American billionaire, made an appearance on the David Letterman Show. David asked him what he would do if he lost everything and had to start over from scratch.

Without hesitating, Trump said:

If I had to do it all over again I would’ve started building a Network Marketing business.

The audience started to shout and boo him!

He looked out at the audience and his dead-pan response was
 
That’s why I’m sitting up here and you’re sitting down there.


PisoandBeyond


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27 comments :

  1. If only people could have the same "mentor" you have.......

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    Replies
    1. Hi there! Great page you got here you should definitely check out this video Vemma and the direct marketing Scam exposed!!
      https://www.youtube.com/watch?v=BUBeibhGvLQ

      Delete
  2. parang mas madami nagkalat kasi na scam at illegal kesa sa legit sir.(just a thought). kung gaya mo siguro mag-endorse baka pa? haha

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    Replies
    1. Kasi it's EASIER to play the victim card.

      Most people really don't fail in MLM - they just quit. Napagod. Tinamad. And it's hard to admit this to themselves. That's why sinasabi nalang na 'na-scam ako' as if that will make them wealthier.

      Success in MLM takes real effort. It takes time to learn the business, practice, practice and more practice. Sadly, hindi lahat ng tao ay may enough patience and perseverance. Kaya hindi talaga lahat nagiging successful. :)

      Delete
  3. i think theyre all SCAMS!!

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    Replies
    1. I think you don't think.

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    2. Let him be. Another close-minded person lol :p

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  4. We have just come out with brand new software where you can promote your opportunity with unlimited funnels and landing pages with viral tools to spread the word. By sharing this tool with others, you make a recurring income. Check it out: https://outloud.us/pricelesstech

    ReplyDelete
  5. It takes a lot of effort to educate people especially Filipinos what network marketing is all about. It's the network marketers who are reinventing the wheel of how to do this business and fails that makes our industry look like a scam.the whole network marketing industry here in the Philippines should make a stand to professionalize the industry so other people will learn what our industry can really provide them.

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  6. Mosr products sold in mlm have good quality but expensive.
    About donald trump, he said he will BUILD an mlm business. On my opinion it is more profitable to build mlm than to be recruited to do it.

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  7. very well said...

    i also remember, i invited a former colleague to my daughter's binyag. while at the reception, i was surprised that she was already doing her 'demo' or product presentation with the other guests... di ko alam kung mgagalit ako or matutuwa sa ginawa nya pro sa totoo lng prang nakakabastos ng konte kc it was a party and yet she took advantage of the occasion for her business..
    ok lang sana kso parang ndi nman yata appropriate na sa party pa ginawa. pwd nman sa office nila...

    anyways, like you said network marketing is a good opportunity but it's really not for everybody...



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    1. Hi Janice ^_^

      Yes, I must agree na hindi nga siguro para sa lahat..although an argument that might be raised with that is "...hindi mo pa lang siguro nakikita 'yung right company/team for you..."

      As for your colleague, hmm...that's kind of unethical for me.. and that's one of the many reasons kung bakit tainted ng "bad impressions" ang network marketing because of their ultra-aggressive approach to the business.

      Thanks for visiting my blog :)

      Delete
    2. I was also gonna say na some people don't have the skills needed to be successful with MLM but I guess the next argument would be that "skills are learned and developed" naman along the way... :)

      cge na nga MLM is for everybody na.. but.. (here's but again.. :)
      not everybody likes to join MLM.
      i guess that's safer :)

      Delete
    3. Ha-ha! You must have been invited a couple of times that you already know what & how to respond in case of objections like those :-P

      Now that's safer I think, not unless some of our MLM friends knew about your statement and make another *but* again :)

      Delete
  8. Okay, so if MLM is really great as you said. Why are there so few people that are actually rich? Are you actually rich? Do you own 10 houses and cars?

    Before you tell me those people "worked" harder. They did not. They earned a lot of money since they scammed a lot of people like you and thousands of other MLM people that fall into their marketing gimmicks.

    I'd rather work an honest job than put all my life into deceiving people into buying no name products that are shit.

    ReplyDelete
    Replies
    1. First, I'm not *that* rich. And owning a number of houses or cars does not necessarily reflect a person being rich (at least that's how I see it).

      Second, I'm not into pyramiding or whatsoever scam so don't say "people like me". I was simply telling here that MLM indeed, if used properly and ethically, could be a great source of income. Well I can't blame you if you have that kind of impression towards MLM people or companies because I was once in your shoes (if you actually read my story above).

      As for your question if why are there so few that are actually rich, why don't you ask them yourself? Then ask those who failed in this kind of business too. What did those successful ones do that those who failed did not? If it's the company itself that caused the failure (which means it's a scam), then that's another side of the coin we're talking. Cheers ^_^

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    2. I read your post twice and it still doesn't tell me how MLM is ethical in any way. Just because you sell a product legally doesn't mean the business is ethical.

      As I've read in one site "If this product or service is so great, then why isn't it being sold through the customary marketing system that has served human society for thousands of years? Why does it need to resort to a "special marketing" scheme like an MLM?"

      Of course the answer is obvious. MLM people doesn't want to deny that its a pyramid scam and want to profit off others failures.

      If you join an MLM just to sell stuff, why not create your own business and sell things for yourself? Why join an MLM?

      To make money of recruiting other people of course! Don't kid yourself.. What else is there?

      The reason why there is rich people in this business is that they're the ones who profit off of the failures of others the most. Is this legal? Maybe. Is this ethical? Hell no.

      Delete
    3. Exactly the point why some people decide to join an MLM: they wanted their own business but does not have the needed resources (i.e big capital, system, plan, product, etc.).

      I actually feel your sentiments, and I myself was frustrated that a lot of companies out there is taking advantage of this business system. That's why it's never a puzzle why we do have "negative" thinking towards MLM, because it was first introduced here as a scam, hence the word pyramiding.

      Well, I guess we all have our definitions of the word "ethical". It's your opinion and I respect that, and I personally see nothing wrong with what you're trying to point at. At the end of the day, we make ourselves accountable for our own decisions.

      Thank you for visiting my blog and for the healthy discussion ^_^

      Delete
  9. i keep on eye on this strategy for years till i finally decided to join one this year just to try and to know whats going on in it.

    source: en.wikipedia.org/wiki/Multi-level_marketing

    what is MLM?
    Multi-level marketing (MLM) is a marketing strategy in which the sales force is compensated not only for sales they personally generate, but also for the sales of the other salespeople that they recruit.

    keyword there is SALES.

    "...but also for the sales of the other salespeople that they recruit." we can call it passive income.

    source:en.wikipedia.org/wiki/Passive_income

    Passive income is an income received on a regular basis, with little effort required to maintain it. It is closely related to the concept of "unearned income".

    source: http://en.wikipedia.org/wiki/Direct_selling

    Direct selling is the marketing and selling of products directly to consumers away from a fixed retail location.

    keyword there is DIRECTly

    source: www.entrepreneur.com/encyclopedia/network-marketing

    Network marketing is a type of business opportunity that is very popular with people looking for part-time, flexible businesses. Some of the best-known companies in America...

    keyword there is OPPORTUNITY

    now, MLM is for the company itself and network marketing and direct selling are about yourself or both of your mentor and mentee.

    i dont see any problems on MLM but the way it networked, marketed and sell, yes and almost. lalo na d2 sa pinas.

    lack of professionalism and handling situations.

    direct selling is all about retail profit.
    network marketing is all about relationship.
    once you have established that relationship, you as mentor and mentee will see the possibilities how to improve your business. YOU HAVE TO HELP EACH OTHER untill you have your own network.
    always remember, when you join in an MLM, you are like buying their business system so you will be like a CEO to your business.

    as you can see, it looks like this is not for everyone but if you have to come out of your comfort zone and learn all those things, you can difinitely live on a dream you ought to be. its ok to be poor but its better to be rich.

    i can tell all MLM companies are OK. you just have to look for what is suitable to you or what is achievable in terms of your goals. it takes planning and timing.

    MLM, direct selling and network marketing is just a START of your journey to success.

    https://www.facebook.com/nimrodgjoven
    https://twitter.com/nimrodgjoven

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  10. Kung ang business priority ng MLM ay mag-recruit malamang fake na yan. Kung ang price ng MLM product ay ridiculously HIGH, malamang fake din yan. Gaya nga ng sabi sa article mas lower ang cost ng product kasi mas less na ang product movement.

    Reminder: kung maka-encounter kayo ng recruiter at napansin nyo ang nasabi ko sa taas wag kayong sasali. Products must be at reasonable price and for gods sake recruitment is not a real business...

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  11. I think network marketing is not a scam. the only difference is some create value and the others create shits.

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  12. A very awesome blog post. We are really grateful for your blog post. You will find a lot of approaches after visiting your post. I was exactly searching for. Thanks for such post and please keep it up. Great work digital marketing

    ReplyDelete
  13. I read this article. I think You put a great deal of exertion to make this article. I like your work.
    mason soiza

    ReplyDelete

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