The Gospel

I have the chance to listen to a neighbor of mine, give a talk on her favorite subject and who, just so happens to also have a PhD. She is an executive coach, corporate executive and behavioral psychologist. She is going to talk about the following subject, “If you believe you can, you will. If you believe you can’t, you won’t.”

Now under normal circumstances, this is pretty sound advice for those of us who are looking for a formula for success in surviving life. No, not really exclusively for life, but this is the same type of advice I hear all the time from MLM gospel advocates. How convenient for these people to pick up on this line, and use it to promote joining them in their quest to expand their down line.

Under normal circumstances this type of advice does have it merits, but it is not worth applying it to things that are basically flawed from the get go. There has been a lot of discussion about MLM businesses and as I delve deeper and deeper into the subject, I am starting to see that no matter how it is presented, how “clean” and “different” promoters of MLM business present their particular sales pitch, all MLM businesses are basically huge pyramid schemes where the few feed on the plenty.

There five basic sirens that sound and one should be aware of when being pitched a product based MLM business:

1. Each person recruited is empowered and given incentives to recruit other participants of empowered and motivated recruiters recruiting recruiters – without regard to market saturation.

2. Advancement in a hierarchy of multiple of “distributors” is achieved by recruitment, rather than by appointment.

3. “Pay to play” requirements are met by ongoing “incentivized purchases,” with participants the primary buyers.

4. MLM companies pay commissions and bonuses on more “distributor” levels than functionally justified i.e. more than five levels.

5. Company payouts (commissions, bonuses etc.) per sale for the total of all up line participants’ together equals or exceed that for the person selling the product – resulting in inadequate incentive to retail and excessive incentive to recruit.

Here are five basic questions to ask yourself when you are offered the opportunity to participate in an MLM business:

1. Are participants recruited in an endless chain of participants?

2. Is advancement in the business by recruitment, rather than by appointment?

3. Are participants required to buy (or subscribe to) products and services in order to qualify for commissions or bonuses or to advance in the business?

4. Does the company pay commissions or bonuses on more than four levels of participants?

5. Does the company pay out per sale for the total of all up line participants exceeds that for the person actually selling the product?

The choice is of course up to each one of us to decide whether or not we want to take the plunge, but I am reminded of something that was once told to me by an MLM recruiter: She told me that today, it is much easier to recruit new distributors outside the United States, because here is the US people are too complicated and suspicious. She said that outside the United States people are more willing to just do it. She also said that telling people in Taiwan or Japan that if you believe you can do it, you will - is more palatable there than here in the USA.