Is There A Problem With MLM?


When it comes to network marketing or MLM, we will always get extreme views regarding it.

While some of the most celebrated authors or entrepreneurs out there are talking about it passionately with their books like Robert Kiyosaki Robert Allen and Donald Trump.

There is the other side of people who criticizes it labelling it as a scam of some sort.

So is there a problem with network marketing or MLM?

I think the first thing that leads to this thought is because of it pyramid structure that MLM is often related to.

But to be fair, almost every large business corporation can be considered as a pyramid scheme.

The people doing the sales will get commissions, the sales managers will have some sort of overrides and bonuses when their teams perform well and as for the directors, they get a bigger cut.

Perhaps it is because members have to pay in order to get into an MLM?

But isn’t it similar to a standard franchising business?

In addition, the fees for joining a network marketing company is nothing compared to a franchisee fee say for Dunkin Donuts.

Maybe it is because people think money is made by signing up other people and most of the time, very little products are sold.

If that is the case, how did companies like Amway, USANA and many other network companies achieve millions of dollars of sales?

This is because the distributors are also customers.

Therefore, the perception is the problem.


But how many times have you heard of illegal MLM?

This is an ongoing problem but not a problem of MLM.

Due to the nature of this business module, it attracts many people wanting to capitalize the idea of having people working for you.

Therefore, there is a lot of companies out there with very low entry fee which aims to attract many people who are aiming to become a real business owner.

This type of opportunity often attracts people who have not done well in their job or business.

That is why they have no capital to invest in an MLM company.

There are also the people who have no experience of running a business or even those who have never done any sales related work before.

In most cases, people who join such network marketing companies will have unrealistic expectations expecting a huge amount of income without the equivalent work that they have to produce.

This is the common trend that we see out there.

But due to the expectation to succeed, many marketers will do what is not considered the right path in building a network marketing business.

They will over-sell their opportunity.

We have heard this one many times.

Marketers telling their prospect that they can fire their boss in 6 months if they do this or do that.

Some will over talk about business with their social circle making them not pleasant to mix around.

This shows desperation and no one would like to follow someone who is desperate.


So what can we do about it?

The first thing and the most important part is to treat any network marketing or MLM business as a real business.

This means that you are a business owner.

You need to learn how to run your business and this can be done from learning through reading or through leaders in the field who has already achieved a higher level than you.

Learning the fundamentals is a must and every network marketer must know their product as well as business module clearly.

This is added with adequate marketing techniques and skills in order to grow their network.

When you act like a businessman, other people will treat you as one.

Be a professional in what you do and people will look to you for solutions.


Have a wonderful day,

Rui Ludovino



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