Is MLM A Real Business?

I was pottering about on Facebook over the weekend (like you do) and noticed that one of my friends had recently ventured into the work of MLM and my heart sank, because I have a thing about MLM.

In a nutshell, I simply can’t see it as a real business. I’m sorry, I’ve tried to get my head round it, but I always come to the same conclusion.

Before I launch into all the reasons why I feel the way I do, I firstly want to apologise to all the people I know who are already involved in MLM and please, don’t take this as a personal slight on your abilities. I want to stress that I’m talking in general terms here and so it should, in no way, be seen as a reflection on you as an individual. I’m simply putting my opinion across and hope you won’t take it as personally – please keep reading and I’ll explain myself.

For those of you who have been living on another planet for the last few years MLM stands for Multi-Level Marketing. Some call it Network Marketing, but it basically amounts to the same thing;

“A sales force compensated not only for sales they personally generate, but also for the sales of the other salespeople that they recruit”

Thank you Wikipedia.

We’ve all come across it, even if we didn’t know what it was, as there’s an awful lot of it about, with the most high-profile MLM businesses being Utility Warehouse, Arbonne and Juice-Plus, although there’s many, MANY more out there you may well have come across.

I also have to admit that MLM has moved on significantly from the old “pyramid selling” idea and, thankfully, the majority of illegal pyramid (Ponzi) schemes have been shut down – although there are one or two causing havoc on Facebook at the moment, it has to be said. I also have to acknowledge that commission structures bearing more than a small resemblance to the MLM format are operated in a not insignificant number of large companies to reward their sales force, so there must be something in it.

So why do I dislike it so much?

Well, I’ve come to the conclusion that my main issue is not with MLM itself, but the people who do it, because it’s simplicity and promises of untold wealth make it seem so very, very easy and, tempted by the idea of loads of free time, little or no effort and easy gains, MLM seems to attract an awful lot of people who;

  • Have little or no business experience
  • Have no experience of developing business relationships
  • Have no sales experience
  • Have no business development experience
  • Have failed at running their own business

Once again, I issue an unreserved apology to those I know in MLM to whom none of the above apply, but I have to say they are few and far between – out of all my network of MLM people, I can probably count the individuals who really seem to know what they’re doing on one hand. Unfortunately, too many networking meetings are now overrun with MLM’s and the majority of them are guilty of over-promising and overselling the potential rewards and therefore coming over as desperate as a result.

MLM is essentially a sales role and yes, if you don’t sell, then you don’t make any money, but are you really running a business? Are you any different to an employed sales person who works on commission only? Granted, there aren’t many of those roles left, but they do still exist and there aren’t many left because people don’t want to do them. Is MLM just a way for big companies to utilise a cheap sales force? I’m struggling to see it any other way.

And then there are those MLM schemes that don’t actually sell a product, they sell a “business opportunity of a life-time” – and this is exactly what my friend seems to have signed up for.

Alarm bells are going off all over the place, particularly when their Facebook post says you have to follow the link and “sign up” if you want to find out what it’s all about.

What? Is that really good business practice?

If the person I mentioned at the outset was truly confident of what they were selling, would they be making everyone who enquired part with their name, email address and phone number just to find out what the “opportunity” was? I have to say I’m really not a fan of the cloak and dagger approach.

I can’t help thinking how my business would be faring if I asked every potential client to hand over all this information before I would even tell them what I do. I’m actually laughing at how that would be received… still laughing… although it’s not actually funny at all, just scary.

And how many times have we all been persuaded to impart all these details only to then find our inboxes bombarded with spam emails tempting us with the “opportunity of a lifetime”, Perhaps it’s taking over from emails telling you you’ve inherited a fortune from the Nigerian royal family…

I have the biggest issue with people who “also do” MLM as a side-line to their main business. Come on, if your own business is doing so well, how the heck can you find the time to do something totally unrelated? And why would you need to anyway? I mean, if you’re a Tax consultant, why oh why would you be selling tablets that go in your petrol tank to get you more miles to the gallon? If you’re a web designer, why sell little capsules of dried fruit and veg which supposedly cure all sorts of ills?

Okay, if you’re a personal trainer selling Juice-plus, or a garage promoting fuel-tabs, I can sort of see the point, but otherwise, what were you thinking?

All this says to me is “my main business isn’t making enough money, so I’ll find something else for a quick win” and that won’t do a whole lot for your professional integrity. If you need more money, you’d be far wiser investing your time and energies in doing what you supposedly do best, and work on ways to run your existing business better!!! But I’m just a business development specialist, so what the heck would I know…

While doing research for this article, I came across a whole host of websites hosted by people who feel the same as I do, so it appears I’m not alone. And I also found this very accurate quote;

“And sales position that suggests you convert your customers into your competitors is admitting that there is actually no real money to be made selling the product”

Hmmm… They might have a point.