Multi_Level Marketing: Scam or Legitimate?

I was recently approached by a gal who rpresents a MLM type business…I heard the spiel-it seems to consist of getting asmany people under you as possible, and as you get a cut of every underling’s sales, your income grows exponentially!
My question: this seems to be a variant of the basic MWY scenario-and MWY is (or seems to be) a legitimate business. My question is:
-does anybody really make money in these sche,mes?
-how hard is it to pull in people to this (once you’ve exhausted your circle of relatives, and soon-to-be ex-friends.
Anybody have any personal experiences with this?:confused:

Yes, people do make money in these schemes – the TOP people on the pyramid. The lower you go, the less chance you have of making anything.

Multilevel marketing has different varieties. Those that concentrate more on getting new sellers below you rather than selling products are, to one degree or another, potentially illegal. Those that really do sell product are legal, but still you raise legitimate questions about how easy it is to sell. From those I know who have tried several different programs (and tried to sell me on them as well), I would say the answer is “not very successful.”

Friends In Business has a good article about MLM, with links to some excellent resources. The bottom line is that while there are some companies in which some people are able to make some money, MLM is very commonly used by scammers and people selling questionable products.

Assuming that the product is legitimate (think about whether it’s something you’d want to buy, and more importantly, whether it’s something you’d want to buy on a regular basis), you’ve highlighted the key problem – recruiting. With the Internet and widespread communication, more and more people have heard of MLM and don’t want to get involved. Finding new salespeople once you’ve exhausted (and possibly alienated and annoyed) your circle of acquaintances gets to be more and more difficult.

Actually, every distribution system is MLM.

Manufacturers sell through networks of wholesalers to networks of retailers. Sometimes, there is yet another entity called a “manufacturer’s rep”, who is between the manufacturer and the wholesaler.

All that distinguishes the type of MLM you likely mean from the rest is entrepreneurship. If you are interested in owning your own business (and working hard at least at first), it can be an excellent and inexpensive way to do so.

Determine whether the company concentrates on selling product or recruting. Look for simple structures like the so-called “unilevel” (which I think Avon and MaryKay) have.

Avoid deep-level branches of structure that are designed so that you will drop out before earning your commissions. Avoid also companies that heavily stress recruiting.

A friend’s family sold Amway; my mother sold SunLife herbs for a while. Both of those are legitimate MLM schemes, meaning they’re not pyramid schemes that depend upon recruiting new members for continued operation, though they do stress that recruiting is the way to really profit.

The people who did Amway made a few bucks on the side moving product, and got cheap no-name products themselves by using it. They never made a lot of money, but it was worth it to them, so they kept doing it. Other people I know who’ve tried it have lost all their friends by trying to recruit them.

My mother gave up in about six months when she realized the product (eighteen million different herbal supplements that did nothing for anyone) were essentially snake oil, and that to sell it she’d have to basically form a cult.

The lottery is a legitimate business, too, and some people do make money in it. Does it strike you as being a wise investment of money?

Multi-level marketing schemes almost never work, and 95% of the time are outright scams (Amway is a rare legal one, and it’s still a ripoff.) They are quite specifically and intentionally designed to make money by getting people to pay the entry fee.

Yes, I have some personal experience with this. Virtually every aunt and uncle I have has bene roped into at least 3 or 4 of these things. Without a single exception, they lost every dime, every time. Don’t be fooled.

A friend of mine is in Amway. She hasn’t “lost all her friends” due to attempted recruiting but she has asked all of them, and none of them have joined. She has risked losing friends, as some people really resent being recruited, for no gain.

Yes , I dabbled for a while, but soon realised my error.
The senior associates seemed to be mostly slimy , sneaky materialists.

The training material was funny - like , what to say if the prospect said “Is it A*!@#?”

Problem was , nobody ever said it like that - instead , they said :
“Oh no , it’s not A*!@# is it ??”

I well recall a chap on stage asking rhetorical questions along the line of :
“What kind of organisation is it where you tell your upline about a personal problem before you tell your family?”

My innate politeness prevented me from calling out:
"A CULT "!

Anyway , most people can make money if they sacrifice their principles.
Bugger it , I’ll stay poor but keep my conscience.

The Skeptic’s Dictionary entry on multi-level marketing:

http://www.skepdic.com/mlm.html

My favorite pyramid scheme is still the U.S. Social Security system, though.

Hmmm … I never thought of the Herbal Remedies aisle in a supermarket/drug store/health food store as a cult before, but if the shoe fits… :wink:

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