Multi Level Marketing vs Pyramid Schemes...
By ParaTed2k
@ParaTed2k (22940)
Sheboygan, Wisconsin
December 13, 2010 10:50am CST
When I talk to people about the benefits of becoming a Sendout Cards distributor, I often here the accusation that we're a "pyramid scheme"... of course, those who like this business model use the term "multi level marketing (MLM). The fact is though, they are two different things.
Pyramid schemes offer no actual product or service. Money is made solely by distributors signing up others to be distributors. They are also illegal.
Multi Level Marketing is similar to the pyramid scheme in that distributors sign up others to be distributors, but they offer at least one actual product or service to customers. In most cases, people are free to be customers (buy the product, but not sell distributorships and/or products themselves).
It is a good business model because it lets those who believe in the product become part of its success. Anytime we recommend a product or service, we become unofficial sales people. We actively market our favorite brands, sometimes even paying money for the privilege... but we don't get to receive any commissions or bonuses for it.
For example, look around. How many t-shirts and baseball caps do we see with some business logo, the name of pictures of musicians or other celebrities, sports teams.. etc. Such marketing is a multi billion dollar industry.
Anyone with the means can buy into a distributorship or franchise for any company that offers them. With anywhere from a few hundred thousand to a few million dollars, you too can buy the rights to market, sell and profit from some of the most popular brand names out there.
Most of us can't afford that though. On the other hand, for anywhere from $50 to a few hundred dollars, a person can become a business owner in any of the thousands of companies now using Multi Level Marketing as a business model.
Using MLM, people have created financial freedom for themselves from some of the most poverty stricken lives.
There is a warning though, just as some regular businesses are scams, there are scams in MLM... it is vitally important to investigate any investment opportunity before putting your money and time into it. The business taht are scams are no better than the illegal pyramid schemes.
1 person likes this
4 responses
@Masihi (4413)
• Canada
13 Dec 10
Hmm...that's quite interesting, actually, because I was a part of Signature Life Management TEAM LLC headed by Orrin Woodward and Chris Brady. Now, when I was a part, it was a tools company that was working aloTngside Monavie distributers. Before, TEAM was working with Amway, then was stand-alone. During its time it was "standing alone" all it was it was simply a tools company about leadership development. So you get all these hyped-up CD's and books and go to these wacky seminars. And you get paid for the downlines purchases. But when they hooked up with Monavie, the tools distributers stopped getting paid as we pushed through the Monavie juice. The only people who then got paid in TEAM were the higher-up people. Still keeping with the books, CDs, DVDs, seminars, and major conventions, this company's making millions.
I was with Monavie/TEAM for 7 months before being forced to quit due to maxed-out credit. It's like when you leave TEAM, you leave the friendship you have there. Even if you didn't make a single sale on the juice, they had no compassion on you. And you're stuck with all this materials (in my case 2 boxes) without any return, since the materials were used. In fact, I didn't even know that TEAM and Monavie were separate companies until a few months into this marketing scheme.
You walk into those seminars and conventions and weekly open meetings, and it's like walking into a cult. Everyone acts the same, dresses up, and hang on each word the speakers were saying as if they were some divine entity. It's so freaky. I mean, you're even told how to think!
A lot of people are wary of MLMs and that's okay. We aren't all made to be salesmen.
1 person likes this
@ParaTed2k (22940)
• Sheboygan, Wisconsin
13 Dec 10
Yeah, I was invited to a TEAM meeting last week. There was some goods stuff taught, and there are products sold, so it is legal (as in not a pyramid), however, I noticed that you had to buy an awful lot of stuff to keep up with the TEAM.
That's what I love about Sendout Cards. You have an initial start up cost, and there are training aids available, but most people do fine without them. Then you pay for the greeting cards you create and send. There is no inventory, quotas or even hard sells.. in fact, our training tells us not to.
I'm glad people are wary of MLMs, and you're right, not everyone is a salesman... I've even talked to people who, after learning more about them, agreed that Sendout Cards wouldn't be the right fit for them even if I talked them into it.
It's like any other business, you have to be a product of the product first. If people can't believe you love it, they never will.
@Masihi (4413)
• Canada
13 Dec 10
You really hit the nail on the head on this one, because, that's what TEAM does - the opposite. My guess is that you were simply invited to the Tuesday Night Open, as we called it. How we were supposed to meet the prospect at their home, dressed professionally, and show them "The Plan" (NOT at a coffeeshop!) YOu try to avoid the living room because it's sociable, and instead steer them towards a diningroom table, where decisions are more likely to be met. Once the prospect is signed up you have to sell them as much stuff as you can, like the Team System, then some books or CDs, and then the next seminar ticket.
I sat and thought about it all, and realised how manipulative it all is. And yes, you do have to be convinced about the product, and I was, however, I thought the juice was overpriced. People can sniff a hesitation a mile away. LOL!
What I didnt like is that I was basically pushed into staying even though my sponsor knew I was maxing out (she was a family friend, actually) and her comeback is that I will succeed and that's that! Then I told her about my struggle with anxiety disorder she told me to overcome it by listening to the CD's all my waking hours. Then i told her about how I struggle acedemically, and she said "dont't recieve that in Jesus Name, that's just the devil telling you that"
Ugh, so unethical. I warn so many people about that TEAM crap.
1 person likes this
@mhypie03 (683)
• Philippines
23 Dec 10
I have been skeptical about other MLM companies especially those selling Glutathiones which I find overpriced. But just now I realized my mom is also a a registered member of an MLM company. But she has never recruited anybody. She did it for the purpose of discount because the herbal medicine is really effective since it extended the life of cousin who suffered from cancer 8-10years ago already. Yesterday, I joined a different MLM company. I have used their product as well before I got decided. It has helped improve in my severe and untolerable feeling of dysmenorrhea and looking forward into more healing effects. My dad will try it with his psoriasis, if it heals, it's a total miracle for us then. I am also taking the herbal supplement my mom discovered. My parents both aged 58-60 are healthy after series of laboratory tests this year using my company's health card. And I can confidently say it's a matter of tests and research on the product for you to believe its effect.
@ParaTed2k (22940)
• Sheboygan, Wisconsin
23 Dec 10
I encourage everyone to be skeptical about MLMs (and any other business model). I signed up a lawyer the other day. He was looking for an opportunity for his wife. You can imagine how skeptical a lawyer would be! He asked great questions and admitted to me that he was waiting for the "deal breaker", or the part that skewed it unfairly against the customer or distributor. He ended up signing her up as a Christmas present to her. We then signed his law practice up as his wife's first customer.
Imagine how excited she'll be to not only get a Sendout Cards distributorship as a Christmas present, but also her first commission check... oh yeah, and her husband as a client. ;~)
@mhypie03 (683)
• Philippines
3 Jan 11
Hello,
I have been selling well the products I got from the MLM company I joined recently which is actually my display picture. I hope to do vey well in the next coming days and months. It's a good thought to use such products where everyone in the household is benefiting from it. Aside from that, the good business behind it can really boost your confidence of joining companies like them when everyone else has doubted the real agenda about MLM companies. =)
@silentwill (1685)
• Philippines
14 Dec 10
Interesting distinction you pointed out there. I must admin I'm guilty of equating multi-level marketing with pyramid schemes so I'm surprised to find out there's actually a difference between the two. Either way, I'm staying away from both. This kind of thing isn't my cup of tea.
@ParaTed2k (22940)
• Sheboygan, Wisconsin
14 Dec 10
That's the reason I posted this, and no, MLM isn't for everyone. However, they can be great opportunities for those who are willing and able.
@silentwill (1685)
• Philippines
14 Dec 10
Yes. while it's definitely not for me, I do know a friend who did well with MLM. Thank you for the clarification.
@wealthymouli (710)
• India
14 Dec 10
MLM or Multi Level Marketing is actually called DIRECT SELLING- Multi Level. Which offers products and has a compensation plan and governed by DSA. (Direct Selling Assosiation)
Rest are all not MLM and of course we can call them REFERRAL MARKETING where one is paid for referring some one.
@ParaTed2k (22940)
• Sheboygan, Wisconsin
14 Dec 10
Yes, there are many names for it.. but a rose by any other name... :~D
