The Dark Side Of Multi-Level Marketing/ Pyramid Schemes ⚠️SCAM ALERT⚠️
In this post, l will quickly go through some of the bad attributes of MLMs – so that you can get a clear picture about these pyramid schemes i.e. before you risk your hard earned money.
This ‘business model' has been regarded as unethical from the past – which is 100% true.
And let me explain why in the next few paragraphs.
1. MLMs Are Designed To Fail
By nature, most MLMs are designed to fail.
Take it this way;
If 1 person starts an MLM – and that person recruits his/her own 5 people, there'll be 6 people inside the system.
If each of them recruits his/her own 5 people, there'll be 26 people in the system.
And if the cycle keeps going, you’ll realize that the scheme might exhaust the entire population of a nation i.e. if they keep recruiting more and more people.
When this happens, those at the bottom of the scheme will struggle to find new recruits – and as a result, they might end up quitting.
And if they quit, their up-liners will not be able to get income – since there wont be anyone below them.
As a result, they will eventually quit as well.
And if this quitting process continues, the system will eventually collapse.
2. MLMs Are Designed To Make The Owners Rich – At The Expense Of Lower Tier Members
Another reason why MLMs are bad is that, they're designed to make the owners rich – at the expense of lower tier members.
The reason being that, all members are required to pay a subscription fee – so as to remain part of the system.
And we all know that, most of that money goes straight to the owners – thus, enriching the owners.
And studies shows that, most people who joins MLMs fails to make enough money to cover for basic subscription – thus, they use their own monies to pay for subscriptions – hoping that they'll earn some money from the system in the future.
But the truth is that, most people spends years trying to make this sh*t work – when in actual fact, they're just helping to fund the system – so as to keep the system going.
Still on that same issue, some MLMs are designed to help sell the company's products – thus, enriching the company itself.
For example, some companies might come up with some supplements or makeup products – then they recruit people to sell their products on their behalf.
Nothing is wrong with that – until the company starts asking for subscription fee in order to keep promoting their products.
Why should someone pay a subscription fee to be able to promote a company's products?
Also, some might say that, you'll need to recruit some down-liners – who will help you in selling ‘your products’.
And the more down-liners you get, the more you get paid.
In this case, you'll be just an ‘employee' who's paying to work for the company – period!
3. Most MLMs Sell You A FAKE Dream
‘Be Your Own Boss’
‘Passive Income'
‘Quit Your 9 to 5 Job'
‘Travel The World'
‘Work From Home'
‘Financial Freedom'
*The list goes on.....
Most MLM companies knows how to touch the main pain points of most people who're struggling to make ends meet.
They use some of the phrases shown above – in order to paint a perfect picture of what your life will look like i.e. when you join the system.
Thus, they'll sell you a dream – so as to get you part of the system.
But in reality, most people who joins MLMs never achieve this kind of lifestyle.
It's only the top tier members who're able to live a better lifestyle – because they have more down-liners under them.
Otherwise, the majority of people who're at the bottom of the pyramid never achieve financial freedom.
But do you know how most MLMs keep luring more and more people into the system?
They use those few top tier members to talk on major events i.e. giving testimonials of what they were able to achieve with the ‘business opportunity’.
And when the general public sees that, they're immediately sold into the system.
4. There's No Real Business In Most MLMs
Recently, l was approached by a long time friend on Facebook – and she pitched me with this ‘new business opportunity'.
She showed me some screenshots of PayPal payments – of people who were earning some incredible amounts from the ‘opportunity'.
And out of curiosity, l asked her;
‘What's the real business here?’
‘Which products or services are being sold in this so called new opportunity?’
She didn't know how to explain that ‘opportunity’.
And that's how most MLMs are designed i.e. there's no real business going on.
Some of them are now designed as online courses i.e. promising to teach you how to make money online.
And when you join the course, they'll teach you nothing – other than how to promote the course itself.
For example, some ‘gurus' says things like;
‘I will teach you how to make $1000/sale – using my proven system'
‘Just buy my $2000 course – and l will give you all my knowledge – invest in yourself’
And when you buy the course, they'll say;
‘Here's your referral link. Now go out there and look for people who're interested in buying the course – and you'll earn 50% ($1000) per every enrolment’.
And the recruited individuals are also required to recruit their own down-liners as well – thus, the pyramid will slowly build over time.
And most of the students will use their ‘recruitment commissions’ for attraction marketing i.e. they post screenshot of their earnings – then they write captions like;
‘I have made this income on my off-day – while walking my dog outside’
And when people sees these kinds of ‘results', they'll be tempted to join the system – only to realise that they're the customers who're keeping the business going (there's no real product being sold here).
5. MLMs Are Illegal In Most States
Last but not least, MLMs are regarded as illegal in most states.
The reason being that, the business model is unfair for most people i.e. the low tier members always suffer at the expense of top tier ones.
By default, this business model is designed to make the owners rich – through ripping-off lower tier members.
That's why most governments are against this ‘business model'.
However, most MLMs these days are coming off as ‘genuine businesses' – and they even go a step further to support some community projects – hence, masking their ugly side.
But the truth is; these companies are illegal – and also, it's difficult to recover your money when the company decides to shut down unexpectedly.
Wrapping Up
I hope that this article has shed some light to you regarding the issue of MLMs.
When someone approaches you with an ‘MLM opportunity', you should always remember these facts – and you wont easily get lured in these type of schemes.
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