How many times have you heard people say beware of multi level marketing schemes? Seems to me in the last year there has been a sudden revival of multi level marketing companies and members are becoming more active – and dare I say aggressive? As the recession bites more and more people are looking for new ways to make ends meet.
Multi level marketing schemes have an unfortunate reputation of being “bad’ and a sure way to lose not only money, but friends as well. In many cases people simply believe they are illegal pyramid schemes and won’t even listen to the sales pitch.
But here’s a thought.
What about normal corporate business? Could they not be considered pyramid schemes?
After all you have the workers at the bottom of the food chain doing all the work. Above that you have layers and layers of management until you get to the Chief Executive Officer. This fellow earns millions. Even in times of recession he gets bonuses of millions of dollars while workers on the floor are laid off.
Is the business of a large corporate bank any more ethical (for want of a better word) than a multi level marketing scheme?
Essentially multi level marketing schemes have a product which they offer to participating members as an exclusive offer or at a special price. Members are then obliged to buy a certain amount of product each month and encouraged to promote the product. Successful promotion of the product and recruitment of new members is rewarded by paying commissions. Regular training and recruiting meetings are held to encourage growth.
It all sounds pretty simple and very workable but there are several problems when putting this into practice.
The first of these is the requirement to purchase product every month.
If the product is such that it is not all consumed in one month (such as cleaning materials) then the following month you may find you are ordering more of what you have or, even worse, ordering something you don’t need. The result is you land up with a garage full of useless stock simply to meet your commitment and stay in the business.
The other major problem is recruiting.
So many people have been approached over the years and had bad experiences, or heard of others who have, that any attempt to recruit them is met with stiff resistance. It’s no fun forcing friends or family to go to meetings they really don’t want to go to and then expecting them to buy something they don’t want or need.
Very few people have entrepreneurial spirits and most prefer to remain in their comfort zone – even though they are actually uncomfortable. Just the thought of selling something is an enormous psychological barrier for most people. Yet those same people have no problems buying stuff!
By: Lawrence Bredenkamp
© 2010 Multi Level Marketing
