So, here I am, writing about one of the most interesting topics I have come across in recent times. I am sure many of you might have come across at least one Network Marketing scheme or the other by now.
I have seen many blogs - mostly with opinions heavily biased against Network Marketing. Most of these authors, lack objectivity in their posts mainly because, right from the start, they are against the entire idea of people joining an MLM (Multi Level Marketing) or question its effectiveness. They also call those people who are involved with an MLM to be under some kind of spell. Some even call them greedy, money minded people! These same people work hard for what? Money. How then is an MLM-er more greedy than say, an employee or a self employed individual? I for once do not think aspiring to be financially free constitutes greediness. In my opinion, anything has be be scrutinized, analysed and all sides of the entire thing be looked in detail before dismissing anything away or calling it a scam. Same is the case if one believes an MLM is a great way to earn perfectly legal passive income. Present objective facts before claiming it is a genuine opportunity.
I want this blog post to clear some misconceptions regarding this controversial topic. Before I begin, let me take this opportunity to clarify the reason for writing this post. I have been associated with Networking Marketing since its early days in India. I am talking about the late nineties here. I guess a 10 year "hands on" experience should be a good qualification for me to write fairly authoritatively about this topic. I will do this post in a QnA format. Before that, I wanted to talk in brief about the perception this industry has in the world. Almost everyone knows the Amways, the Oriflames, the Tupperwares the RMP's and the Herbalifes. But this knowledge is mostly "their perception" of the thing. Most people have been told different things about these companies which might be true or false. Most of these opinions are from folks who actually do not know what happens behind the scenes eventually become their so called knowledge about the entire thing. Your friends friend might have been in Amway, continued it for say two years, , didn't earn a penny out of it. Naturally, it would be seen as a loss making venture and for the same reason, a thing that doesnt work (for him/her). He is absolutely correct when he says it doesn't work! However that necessarily isn't the case for a few others for whom the idea worked.
Let's begin the QnA section now.
1. What is an MLM/ Network Marketing System?
An MLM is a way of marketing products directly from the manufacturer to the consumer - removing the middlemen who are involved in the traditional marketing system.There are companies who have their own products (Amway, Oriflame and Tupperware for example) and some who simply markets products made by other companies. (RMP for example).
2. Is MLM Legal?
This is a very controversial section. In most countries globally, it is legal. The US Government for example differentiates MLM system to be different from Pyramid and Money Circulation schemes. In India however, any company that sells directly to consumers and also offers them an opportunity to earn commissions on future sales through them are wrongly put in the same bracket as illegal, pyramid schemes. If we are to go by the Indian Prize Chits and Money Circulation Scheme (Banning) Act,1978 in which MLM companies according to me are wrongly put, it indeed turns out to be illegal. In my opinion, there is a need to pass a law that legalizes genuine business opportunities and bans illegal "schemes" that masquerade as "MLM opportunities". Simply put, if we are to go by the Indian law, MLM giants like Avon, Amway, Herbalife and even Max NewYork Life Insurance (All Billion plus Dollar Corporations) turn out to be illegal!
3. Does an MLM actually work?
Depends. If you joined an MLM due to constant persuasion, it is highly likely that you will quit the business by the end of the very first year (and for the same reason, didn't work for you) :). It is simply foolish to expect returns from a business that you joined because someone wanted you to join. You joined for them, not for you. It is no less similar to you opening a shop because your neighbor asks you to open one. Any business will only work if you treat it like a business. If you happen to be an ex MLMer, there could be multiple reasons for your failure. Like any other business, an MLM needs constant attention. You need to learn how to approach people (the art of prospecting). You also need to identify people who would be an asset to your "group". An MLM is something that CANNOT be done by each and everyone. If you are in an MLM, your idea should be to form a strong down-line with people who could be leaders to their down-lines- and so on... in the future. Going in for quick gains by sponsoring as many people as you come across simply doesn't work.
4. How can you claim it works?
Well, I don't claim it works. When someone says something doesnt work, he is conveying his experience or something which he has heard from someone. If a Maruti 800 that you owned constantly failed, that car doesnt work for you. At the same time, there might be M800 users who have used their cars for ages without any issues. So, if you say it doesnt work for you, you are right! It doesnt! I have been involved with MLM since 1999. I had joined it because of the same reason as most people end up in an MLM. Force, coercion. As expected, it didn't work for us! One thing that was different in me (and my dad) was that we researched quite a bit to figure out why it din't work for us - instead of blaming the entire MLM system to be a farce. We figured that an MLM business is by no means an easy thing to do. It takes relentless effort to create a sustainable MLM business platform that can provide you with a decent passive income. Like I said before, you HAVE to treat it as just another business that needs constant attention. The investment required to start an MLM business is considerably lower than any conventional business. Sometimes, it is this very reason that people fail to treat it as a traditional business. The rate of failure in an MLM business is just a tad higher than the rate of failure in a traditional business .. BUT the former seems to be blamed more even though its financial implications are hardly a blip on the radar as compared to a traditional business.
Apart from all this, I have also seen/met/personally know MANY MLM leaders who are leading very comfortable lives - with a steady, above average income. These people, whom some blame to be money minded people (some actually are) comprise of many people who in spite of reaching a very comfortable income level continue to help others achieve what they did. In short, I wanted to convey that while it did not work for me, I refuse to blame an MLM for my failure.
I think this post might turn out to be boring if I make this any longer.. so I guess we would need a part 2 in the weeks to come. Till then!
Adios!
