Multi level marketing

Singapore, Singapore
October 22, 2015 7:36pm CST
Ever had anyone try to sell you MLM (multi-level marketing) products? MLM companies are not really selling products. They're not really selling us a business opportunity either. They're selling greed and laziness. By telling us about their business model where we can hope to get passive income just by recruiting new members ("down line", they call it), they're capitalising on our desire to do less work while getting more returns.
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4 responses
@Samanthavv (1380)
• United States
23 Oct 15
I disagree and agree at the same time. Funny how we can have conflicting and opposite feelings on the same issue! These companies really do sell products. Some of them sell great products. Even I will admit that I love essential oils from doterra or young living. The makeup from Mary may and to unique is gorgeous. And I fabsolutely love love love spark energy drinks from advocare. The issue isn't that they don't have good products. Most of them do. That's why so many people get involved with them; the products can be good. I am sure there are ones with bad products but there are many with amazing products too. The issue with the products is that they are overpriced, and deliberately so. Yes, companies need to make a decent profit margin, otherwise there's no point to a business. The proble out, is that due to the multi level marketing set up. The prices have to be so grossly inflated in order to allow the company to pay their reps or consultants, as well as to make their own bottom line on profit AND give reps a "discount." Think of it this way. Let's say there's an MLM selling nail polishes. The company sells them discounted to reps for $5 and to the general public for $10. It is very safe to assume that the $5 price is their bottom line, because they won't sell it for less than bottom line, even to the reps. Which means at $5 they are making a good profit. We may not know how much the polish cost to manufacturer but we know it has a satisfactory profit margin at $5 because they wouldn't sell it for that unless they did, even to reps. This is where it gets tricky. They entice people to sign up with this "discount" for reps. People think they are getting a good deal by being able to buy it for $5 as a rep instead of $10. This is really deceptive. That being said, I absolutely hate hate HATE how pushy these reps can be. No. I am not buying unless I want to and if I do I will come to you. Don't hound and pester me!
• Singapore, Singapore
23 Oct 15
Good point. Some of their products are indeed very good. Not necessarily superior to all other brands, but very good nonetheless. Their business model, however, is the thing I have a problem with. By leveraging on greed, their representatives end up hard selling all the time just to make a sale. Downlines are pressured by uplines to sell more and more and more so that the uplines can derive passive income. It's somethign that consumers don't enjoy, no matter how good the products are.
• United States
23 Oct 15
@yeezermac exactly. And to be successful with those set ups you have to know a lot of people... And those people have to be willing to sign up or buy products. It takes a lot of sales sales sales.
• Singapore, Singapore
29 Oct 15
@Samanthavv Large networks are very important indeed. From what I understand, some MLM companies make you pitch to families and friends, first and foremost. Without a large network of families and friends, one would not be able to meet that first milestone in sales.
@cahaya1983 (11121)
• Malaysia
24 Oct 15
I've personal experience with a few of them and I've to say their business models aren't really my cup of tea. I'm especially not comfortable with the exploitation of personal or "warm" relationships to gain trust (and eventually to recruit them into the business) which I know is a practice that is deeply rooted in the MLM business. They might be good products wise (those who do sell products), but that's not the only yardstick that I would use to measure a company's value.
• Singapore, Singapore
29 Oct 15
Indeed. MLMers like to use personal relations to gain trust, only to pitch and hard sell and use emotional attachment as leverage. They know that people will "give them face" and buy something. They will then take that opportunity to do more and more hard sell, until the relationship / friendship is completely ruined
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@Bluedoll (16774)
• Canada
23 Oct 15
If we do not look at specific companies or the specifics of company products or specific business models do you think it is safe to say that all companies do use marketing methods that are similar? A company will hire salespeople and sales managers will profit, as their sales staff promote the companies products?
• Singapore, Singapore
29 Oct 15
Personally, I would say the main similarity is profits. That's what they call as the "bottom line", in any proprietary organization. Of course, there are organizations like welfare organizations and public service organizations that do not have a similar concern for profit. However, the way to achieve this profit differs from company to company. MLM companies use a certain model. Ponzi schemes use another model. Tontines use yet another model. Each model of profit maximization has its pros and cons.
@msrascon (34)
• North Salt Lake, Utah
23 Oct 15
I have bought into several MLM marketing businesses and my experience was that it takes a lot of hard hard work to get to those higher levels. A lot of people will sign up under someone that is already well established in the businesses. You end up joining an MLM under the impression that it's easy money and an easy business. MLM can be highly profitable and lets you work your own hours and control your own business which is esscentially the American dream. However, a lot of people don't realize howhard it is to actually build it up. It can takes years working 50+ hours a week to build up your MLM personal brand.
• Singapore, Singapore
23 Oct 15
It takes years indeed. And once you've established that branding, you'd want to remain in that line of work for the longest possible time, because too much effort has been sunk into that to simply let it go.
1 person likes this