“Of all the home business startup options, the most feared and misunderstood is network marketing or MLM (multilevel marketing). The reality is direct sales (of which networking marketing and MLM are a part of) is a viable way to start a home business quickly and affordably. But like all other facets of life, there are shysters and it’s up to you to research and do your due diligence when investigating an opportunity.” – thebalancemoney.com
We are moving away from the governments and corporate pyramid models. They follow a top-down structure where one or two people are at the top making the big money. Whilst those who do most of the groundwork, the workers at the bottom of the pyramid, have a fixed and often small income.
They often have little or no say on how to improve the business. In fact, they are little more than robots and in many cases are being replaced by robots. This is very much the standard business model.
Even in businesses where they say that they’re listening to the “workers”, they frequently don’t, it is more a lip service, a tick box exercise. “Oh, yes, we’re doing that, we’re asking people’s opinions.” But, when it comes down to it, they’re not thinking about the employee’s at all, and customer service leaves a lot to be desired.
When a company is run by narcissists and big ego’s they believe they have all the answers and so don’t listen and are not open to feedback. Also, corporations continue to grow by swallowing up the small guys, this has grown exponentially over the last few years. This has led to very few at the top of the pyramid. The result is there is less and less competition or desire to improve as they don’t have too.
The MLM Elephant
A growing area in the business world is Multi level marketing (MLM). This model has caused a lot of division and resistance due to its reputation as a pyramid or ponzi scheme and in some companies, this is very much true.
“Ponzi schemes are based on fraudulent investment management services—basically, investors contribute money to the “portfolio manager” who promises them a high return, and then when those investors want their money back, they are paid out with the incoming funds contributed by later investors. The person organizing this type of fraud is in charge of controlling the entire operation; they merely transfer funds from one client to another and forgo any real investment activities.” -Investopedia
“A pyramid scheme, on the other hand, is structured so that the initial schemer must recruit other investors who will continue to recruit other investors, and those investors will then continue to recruit additional investors, and so on. Sometimes there will be an incentive that is presented as an investment opportunity, such as the right to sell a particular product.
Each investor pays the person who recruited them for the chance to sell this item. The recipient must share the proceeds with those at the higher levels of the pyramid structure.
One key difference is that pyramid schemes are harder to prove than Ponzi schemes. They are also better protected because the legal teams behind corporations are much more powerful than those protecting an individual.
One of the largest accused pyramid schemes was with the nutritional company Herbalife (HLF). Even though they were labelled as an illegal pyramid scheme and paid out more than $200 million in damages, their products still sell, and the stock price looks healthy.” -Investopedia
Red Flags to identify Multilevel Marketing Scams
When looking at any business opportunity it is important to do your homework and research information about the products and the company.
Your intuition can warn you to avoid shady business or financial scams an there are many red flags you can be aware of:
- No product, service or low-quality product.
If the focus is building a team rather than the product it could be a pyramid scheme.
- High-Pressure Sale Tactics
Constant pressure to buy that feels like spamming with no respect for you or avoiding questions on the product or company.
- Pressure to Buy a Large Amount of Stock
Some companies push you to buy a large amount of stock of different types of product, even before you have had a chance to try them for yourself, know there is a market for them, or are something you want to recommend. Depending on the types of product, it can be good to have a few products on hand that you can easily share or use yourself.
- Poor Communication
If the company or the individual sharing the opportunity with you are not prepared to answer any of your questions or give flippant answers, walk away. It is okay not to know all the answers, as long as they are willing to find out.
- Pressure to Attend Expensive Events and training
Be aware of pressure that you have to attend training and promotion events at a large expense to yourself.
- Deceptive Advertising Practices
Some deceptive practices include:
- Calling MLM employment rather than a business opportunity
- Earning guarantees or passive income without doing little work
- Leverage time and money
- Not being able to use the company name in any conversations or promotion material. (Although due to trademark and copywrite as an independent distributor your business name cannot contain the name of the brand. This is good practice and not a red flag.)
Listen to your intuition and gut reactions on red flags. But be aware that we have been so programmed to believe that all network marketing and MLM’s are pyramid scams. That is not the case there are some excellent companies out there.
The irony is most big businesses are pyramid schemes. The only difference is they employ workers directly whilst in MLM each worker is an independent distributor who sets their own working agenda.
White Flags to an Opportunity
The nature of some products, especially health products are hard to sell in traditional stores due to rules and restrictions they are obliged to follow. Big pharma et al see any product that does not add to their bottom line as competition. They will do all in their power to get them removed from the market.
Rules for them and rules for us! As we have seen over the last few years big pharma can push and mandate experimental drugs on the world population with no evidence of safety or them even working. At the same time off label products are called horse de-wormers and vitamin supplements as useless.
This has led to many health companies choosing “network marketing” as the only way forward.
“The foundation of any good MLM business is about getting products and service to end consumers. While building a team can be a part of that, income is based on goods sold by the team, not in the recruiting itself.” – The Balance Money
A successful business is founded on high quality products with good results which are authentically and enthusiastically shared by someone who loves the product/s. They are backed by a company who are open, supportive and genuinely want to make a difference in people’s lives.
An authentic MLM company want you to share and recommend their products just like you would a book or a movie to your friends and family for free and not just be in it for the money.
The Many Types of Marketing!
“I get asked a lot, “Frazer, what exactly is Network Marketing?”
“So I thought I would share this with you all… Let me know which is your favourite
- You’re a woman and you see a handsome guy at a party. You go up to him and say, “I’m fantastic in bed.”
That’s Direct Marketing…
- You’re at a party with a bunch of friends and see a handsome guy. One of your friends goes up to him and, pointing at you, says, “She’s fantastic in bed.”
That’s Alliance Marketing…
- You see a handsome guy at a party. You go up to him and get his telephone number. The next day you call and say, “Hi, I’m fantastic in bed.”
- You see a guy at a party; you straighten your dress. You walk up to him and pour him a drink. You say, “May I?” and reach up to straighten his tie, brushing your breast lightly against his arm, and then say, “By the way, I’m fantastic in bed.”
That’s Public Relations…
- You’re at a party and see a handsome guy. He walks up to you and says, “I hear you’re fantastic in bed.”
That’s Brand Recognition…
- You’re at a party and see a handsome guy. He fancies you, but you talk him into going home with your friend.
That’s a Sales Rep…
- Your friend can’t satisfy him, so he calls you.
That’s Tech Support…
- You’re on your way to a party when you realise that there could be handsome men in all these houses you’re passing, so you climb onto the roof of one situated towards the centre and shout at the top of your lungs, “I’m fantastic in bed!”
That’s Junk Mail…
- You’re at a party and you see a handsome guy. Your best friend, who happens to be your ex boyfriend, starts sharing with him his amazing experiences with you in the bedroom…
That’s Affiliate Marketing…
- If you found value out of reading this, share with your community & add value to their life!
That’s Network marketing ”
Network Marketing and Prife International
An example of an authentic model of an MLM, network marketing company is Prife International – the distributor of the Iteracare wand etc.
Multilevel Marketing Forest
At Prife International everyone comes in as a customer, a seed, who can then choose to share the benefits they’ve received and recommend the products. A conscious business is born.
This is not a pyramid or ponzi scheme as the only thing you are investing is your initial purchase of the product. This is an opportunity where you can start a business with no investment. Try that on the high street!
The more energy you put in the more you will receive back. As long as you are coming from pure intention of wanting to help others and don’t just want to make money, your business will grow into a tree.
As a leader and CEO of your own company it is important to learn the business and to take action and not expect your upline to do everything for you. It is your business, it is your responsibility.
You as a leader support and train others to become their own trees a huge forest of conscientious co-creators develops. The sky is the limit, it is up to you. There is no competition, there can be thousands of large trees in the forest!
Sometimes in life an amazing product and opportunity appears in your life, just because it sounds too good to be true, it does not mean it’s not true.
Often we need to step out of our comfort zone, stay open and embrace what we think is impossible.
Susanna, House of Silverhøj, is a Multi-passionate Life Designer, visionary, author, speaker and former Senior Lecturer at Nutrition and Health at Copenhagen University College. She is the co-host of the successful podcast Live the Impossible Show who sees the true potential and genius in people and can help reactivate that potential.
Purchase your magic wand through Susanna here.
Pam, House of Lob is a health genie, author, speaker and is the co-host of the successful podcast Live the Impossible Show. Pam’s mission is to share her unique combination of strategies and secrets to bring health to the world.
Purchase your magic wand through Pam here.