10 Reasons to Stay Away from MLM

Talking about MLM is firework of pros and cons. The fact is, there is always more pros than cons.

Those MLM-pros, may happened to be people who have enjoyed the super-juicy ‘passive-income’ from MLM. They could be couples locked in eel-squeeze embrace in Amalgam cover. My observation is, the higher their position in the pyramid, the more lovey-dovey the poses. Those who have reached Executive Diamond, for example, even with whitened hairs and double chins – strutting like lovebirds compared to the sour expression of couples in entry levels.

But there are also many that haven’t received favors, less the seven to nine digits income, defending MLM practices with all its lyrics : passive income, retire young, success stories, your pipeline is your lifeline, etc; these only shows the rate of success of MLM practitioners in brainwashing people who are desperate of big income, people who are depressed with their low paying jobs – the success of exploiting human weaknesses : FEAR, SECURITY and GREED on luxury things that they do not have.

I have made it my personal mission not to be silent. Where ever I see MLM’ is ballooning – I will be the tiny sharp sparkling needle that immediately punctures it flat.

Next are the 10 reasons why I dislike and would at any time, any place, any opportunity, any chance, any weather, suggest people to stay away from MLM. And MLM here is not only Amway, but also Oriflame, CNI, Nuskin, Matol, K-Link, Elken, Tiens, Nu, Chi, Cosway, Bestway, name it.

1. MLM methods induce its followers to ‘LIE’ when they recruit downlines. I experienced the same manners where ever in Indonesia, Singapore, Kuala Lumpur … When they are trying to seduce you into attending MLM gathering, they are using reasons like ‘Training’, ‘Seminar’, ‘Discussing Business Opportunity’ and the likes. Only when we arrive in location, we find out that we have been tricked into MLM Gathering.

Why ? Because if they tell us straight : MLM, Amway, Network 21 – we will opt to a NO thus able to save our precious time, fuel and parking ticket.

2. MLM methods turn our friends, siblings, in laws, colleagues and all their extensions and variants into vampires who capitalize our affection, care, brotherhood and friendship into a form of ‘business relationship’ and ‘source of passive income’ that benefit them.

How many times people are being coaxed by friends, siblings, colleagues into buying starter-kit that end up as scraps; when all of us are in need and should not spend carelessly.

MLM is not for everybody. Not all people have the talents in marketing. Many of us do not have broad networks. Not all people have the decency or simply thick-faced enough to call high school friend who we did not see in 10 years or university ex girlfriends just to extend network.

3. MLM encourages materialism and consumerism.

What MLM generally offer as bonus ? The most common is TOUR. Annual distributor meeting in Alaska. A trip to corporate headquarter then sailing home aboard Caribbean cruise. If you have been to main tourist destinations, worry not, they will offer you places you never thought of : Canada, South Africa, Finland, all that covered by Google Earth … as long as not troubled places where scuds may inadvertently land on your head.

Others are CARS. Big cars. Flashy cars. Luxury cars. They have in their list Honda Jazz to Jaguar. Mercedez. BMW. Lexus. Range Rover.

Imagine this, the lucid fact. To carry one Executive Diamond, there should be legs of 1,200-1,500 Platinums and 300,000 members. 300,000 people with barely adequate income and on the bottommost of the line, each spend about Rp 50,000 – Rp 100,000 a month their family budget; so that the Executive Diamond could be on trip 7-8 times a year – safari in Kenya and skiing in Alpen, staying in 5 stars hotels with first class dinners; while owning a Jaguar, two Lexus and earning 9 digits passive income.

Our children’s education fund and food money, to be wasted in exorbitance for upline. What would you term it but a cruel business?

Do your MLM mentors tell you that 'Diamond is NOT for everybody? I bet not.

In the ideal principles of product marketing, we are being told to deliver QUALITY to customers. Customers are king.

MLM does not. What uplines discuss is only about US, not our customers which are downlines. About how to enrich ourselves. Passive income. Retired young. Work from home. Flexibility. Profit. Bonus. Tour. Not what the customers get.

4. MLM sell low quality products with pricing up to 40% above similar products in the market.

MLM only distribute sentimental products, with immeasurable outputs and satisfaction levels. The justification is only from testimonials of the regulars – uplines and members, the Independent Business Owners.

Unknown brands. Scanty packaging. Stuff that you won’t put in your trolley, product you won’t buy, if being displayed in Carrefour. Except when mother’s stepsister’ cousin came to your house and babbled for half an hour about its omnipotence. You have a tough time deciding whether you will buy Maxim pan in supermarket or China made Jojo pan that you haven’t heard before.

May be the long existed Amway or Cosway have several recognized brands. But currently there are too many MLM with multifarious brands – mostly are low-end, low grade products, production excesses from China which repackaged in Seremban or Tangerang, then being marketed as Tian-Yao, heavenly medicine more supreme than Pien Tze Huang by Great-way MLM Network with premium price where 50%-60% commission goes to distributor.

5. MLM push on products that customers don’t need.

Observe how many variants of Artistry and Oriflame. How about chlorophyll drink, spirulina pills, squalene, turtle oil, magnetic pantyhose, crocodile’ tooth balm.

Imagine a mother, for MLM which she is a member and a dream of fixed income without working – use money mean to buy a book for her children to purchase a set of anti-aging from Artistry.

Yasser Arafat’ coin from Goldquest. Diamond the size of silica sand from My Seven Diamond. Detox pills from Nuskin et cetera et cetera.

6. MLM is marketing method that does not bring ADDED VALUE to products that benefit customers.

Marketing discipline teach about Promotion Mix, which includes among others Advertising, Sales Promotion, Sales Discount, Reward Points; are methods of manufacturers and distributors to channel parts of their margins to customers.

There is opinion that distributor’s profit is replacement of advertising cost. I digress. In cost context for manufacturer, it may be true. But in the context of benefit for customer, the statement is definitely incorrect.

Porter describes VALUE CHAIN that each process or stage should generate added value for customers. When product is being advertised, it will heighten brand recognition, customers will be proud of using product that wide-recognized and endorsed by – for example – famous movie star. If product is sold with discount, customers
pay less. When product is promoted by giving out other product, customers get two products at one price.

In MLM these are not happening. All values are enjoyed by distributors, by IBO, by upline. Customers get mediocre products at premium price.

7. MLM is a profligate marketing method.

Many MLM principles pay commission up to 5 levels. This is overspending. The statement that MLM is a future business model is a blatant lie.

In the future, margin has to be narrowed because customers are growing smarter, competition is tougher because technology could zap information and output in milliseconds. Layers that bring many costs have to be cut and eliminated. All regular industries are moving to reducing bureaucracies, not supporting business method that incurs high costs for multi-layer marketing intermediaries.

8. MLM deliberately using methods that confuse customers.

The terminologies are very advanced and cutting edge : consumer direct marketing, one-to-one marketing, personal franchising, network marketing – very progressive but actually misleading.

To describe PYRAMID they use complex expressions like stair-step breakaway, legs, binary & trinary, PV & BV and many more. Anything but PYRAMID.

In their guidelines and starter kit, they use many complex tables and diagrams that make Hajah Merry the SMP drop-out and Atong the SD graduate, nodding heads understand in misunderstand.

They have many levels to describe ‘HOW PROSPECTIVE’ and how much carrier advancement, it could reach 12-15 level with names like Ambassador, Regent, Platinum, Diamond, Ruby, Blue Diamond.

The bonus come in many forms and packages with name like leadership bonus, breakaway bonus, production bonus, multiple commission level, and many REBATES.

Rebates, which is a discount for member’s purchase, is called INCOME. Would you call your Carrefour groceries discount and Credit Card cash-back your income ?

There are ‘Suggested Retail Price’ for merchandise that never retailed, and ‘Distributor mark-up’ which is retailed price being sold at wholesale price etc – it turns the marketing you learned in school
upside-down.

Honestly, the methods are more complicated than economy mid-term in university; and how many members that actually understand all those terminologies and rule of game ?

9. MLM is a Networking business where hijacking uplines are normal practices.

Sadly, in the end of the day, MLM is not about selling product, but the business of creating network by accumulating downlines.

The good news for entrepreneur-hopeful, establishing MLM is not that difficult. With correct strategy (and a good deal of capital) we could be able to develop a profitable MLM with thousands of members in the span of 2-3 years.

In order not to make it looks like a blatant networking, or worse – pyramid, but product distribution, you will need products. Then look for products, and necessarily, internationalized it – buy cheap and reject products from neighboring countries. Repackage them, design brochures and fliers that praising the products qualities and supremacies.

Create a profit-distribution method, make it more aggressive, daring, if you want to attract many members possible. Remember that your business is not created to be sustainable, why build house from concretes when you can use cards ?

Avail abundant cash to hijack other MLM’ uplines; give them offer that they cannot refuse. If in their incumbent MLM they get X income, increase it by 20%. If they get Mercy C-Class, splash-in the E-Class. If they only travel as far to China, bring them to Europe Esplanade.

These uplines will pull their downlines in the same manner, and the downlines will pull in their lower ranks. Big sweep. You will spend more than their current MLM, but look at the silver lining : your organizational structure and network are established instantly.

Due to these reasons, the Diamonds, Founders, Ambassadors whatever in the top of pyramid are very precious. It is on a par with executive hijacks and professional hires, these people fetch the high price. The difference are when executives are being hired due to their individual skills and advantages, these MLM uplines are being hijacked because of the loyalty and sacrifices of people in the bottom, thousands of people who coaxed into buying various overpriced products.

10. MLM is exploiting poverty and insecurity of people.

Why MLM is very successful in Indonesia and many third world nations ? Because it is a disguised un-employment : have jobs but not. Beside keeping your dignity intact, you are given dream and hope : of stability, money without working, cars, globetrotting – imagine the effects to people who are jobless and desperate with low paying jobs, people saddled with burden and gloomy future. MLM is cheating their last dimes in dreams that never accomplished.

The method to relish the dream is easy, as MLM agents always say : just bring friends as many possible, then you will climb to the top and get money every time they spend.

What to say, but a cruel method of business.

Tips to Survive in the MLM Infested World :

1. If you haven’t joined any MLM and don’t have intention of joining any, put your antenna on and beware everytime you hear these : people asking you to unknown training or business opportunity, a business model that yield more than 50% a year or 5% per month (even when you are playing stocks or future you are bound to lose sometimes. These unbelievable profits could only happen in credit card, loan-shark and pyramid). Remember the agent could be your closest friend, sibling, family member, wife, girlfriend – don’t bash their knuckleheads ! They don’t mean to cheat you. They are simply being naïve, or stupid, or both.

2. If you are a nice person who believe success come in hardworking, already in a MLM and don’t know you are in a pyramid, GET OUT NOW !! If many close people suddenly avoiding you, it’s a wake-up call. Put aside your starter kit and catalog, or lose them.

3. If you decide ‘anjing menggonggong kafilah berlalu’ and you are hell-bent in making it in MLM; here are my tips on your key to success :

• Join a relatively new MLM, thus you will still be quite high in the pyramid. Do not join Amway. Robert Angkasa is already Triple Diamond – that means Amway already has hundred thousands of member, probably even your second cousin of aunt’ distant niece have joined Amway. There is almost zero chance to extend network not to say being a Diamond! Your position in the hierarchy will be as well as in the depth of palung Sunda.
• Join MLM that offers best commission.
• Prepare sufficient capital to be spent on visits, calls, gathering, name card, brochures. Sometimes you need to sponsor and pay for starter-kits for the prospective downline potentials. Do not be petty.
• Expand your social life : join whatever group that you could fit in : church choir, biro jodoh, karimun-owner-club, fishing club, kelompok pecinta perkutut, tango course, spiritual club, yoga lover, body language, save the orang-utan. Sometimes you have to pay hefty sum for the memberships, course fees etc – but do not be hesitant coz there are where all the prospect downlines might be. Be creative. Join a Ferrari club even though all you could afford is only the hat, mug and tshirt.
• This is advance tip for those with established network : always be flexible. Once your MLM has reached its peak and have too many members, this is the time you should leave for good, and never leave alone. Ensemble your most precious downlines, and move to new MLM the whole group, lock, stock and barrel, and deal for higher benefits and packages for all of you. You will be appreciated higher as group than individual. Anyway that is what networking business is all about.