MLM, ARE THEY A SCAM?
Opinion: This is a featured article written by columnist N'Jio Carre
I was recently searching for football shows on BBC iPlayer, when a program caught my attention. It was Ellie Undercover: Secrets of the Multi-Level Millionaires. Journalist Ellie Flynn went undercover to investigate a multibillion-pound online selling industry that mostly targets young women with the opportunity to earn big money.
What is multi-level marketing? Multi-level marketing (MLM) or Network marketing is a marketing strategy for the sale of products or services where the revenue of the MLM company is derived from a non-salaried workforce selling the company's products/services, while the earnings of the participants are derived from a binary compensation commission system.
She investigated two companies in the UK and went to America to grab a sense of the philosophy of these companies. As with mainstream journalism, the focus was on the dark side of these so called social media “influencers” rather than shining the light on success of the few. What the documentary failed to demonstrate is that the industry most of these companies partake in are heavily regulated. As I expected, she fed off the flaws and ignorance of the individuals interviewed.
With the global economy in turmoil, most people struggle to make ends meet. In order to save money, some companies are forced to lay off employees or face going under altogether. Recently, high street shops have been hit with the rise of online shopping. Many of today’s big names will no longer be around in the next 5 or 10 years. People start to become creative to keep a roof over their heads and food on the table. Chances are that they will go online to look for an opportunity to make some money. More than likely, a colleague, friend, an acquaintance or family member will approach them to watch a business opportunity. Granted that there are potential risks for those who choose to get involved and becoming their own boss and I must admit there is a lack of transparency with some companies about the true earning success rate. No different from some of the jobs I had over the past few years. However, does that mean that the company is shady or should stop trading? Can anyone point a business that has 100% guaranteed success rate?
The common argument I’m hearing more and more is that the rich are getting richer and the poor are getting poorer. What I found out is that most people tend to blame the government, their environment or their upbringing for their lack of success. They hope to get rich by demand (strike). I have yet to see a company that decided to triple the salary of his workforce. Some bet on sports game or play the lottery, while others peddle with illegal substances that lead them to either jail or cemetery. Tough choice.
There is a story about two boys who were brought up by an alcoholic father. When they became adults, one became a tee-total while the other one turned up a drunkard like his father. When asked for the reasons why they ended up like that, these boys gave the same answer: “What would you do if you had a father like mine?” This shows that it’s not what happens to us that determines the course of our lives but rather what we decide to do with what happens to us.
In the digital age, there are more opportunities to be well off than there’s ever been. If you are looking for them and decide to study them, you can find it. The question is to choose one that is congruent to your moral compass and wellbeing. Robert Kiyosaki, a strong advocate of financial literacy, devised the Cashflow Quadrant. The Cashflow Quadrant identifies 4 ways people earn an income. Employed (E) people trade their time for money working for someone else and pay a higher tax rate. Self-Employed (S) people depend on themselves to earn an income. Business (B) people own a system that generates an income while Investors (I) pours in money for profit earnings. Kiyosaki argues that B & I leverage time and other people’s time to make money. People who are doing MLMs are business people who can end up becoming investors.
Now, in the UK, research shows that 20% of businesses fail in the first year of operation while 50% of businesses fail within their first 5 years. What most reputed MLM companies do is to provide an environment that helps those who want to succeed. Through personal development materials and training events, a good MLM company empowers this army of volunteers to thrive and become successful.
How does it work? Traditional businesses spend millions of pound to advertise and market their products to customers or retain those customers. This is not guarantee to work. Competition is fierce and consumers have lots of choices. On the other hand, how many times have we been watched a movie or dined in a nice restaurant because a friend or family member recommended it? That’s the power of free advertisement and referral marketing. The marketing money saved in this way is redirected to the independent business owners who are fairly compensated for their efforts. Also, the product or service recommended is often of a superior quality to what the mainstream offers.
Did you know that most international calling cards came from MLM companies? Some of the most established companies have teamed up with MLMs companies to save money on advertising and grow their business. More than likely, a successful leader in a multi-level company has an incredible lifestyle unattainable by a job payslip. They also tend to contribute to charities or help causes that governments have given up on. Services to many lead to greatness. If you just help enough people to get what they want you can have anything you want, said the late Zig Ziglar.
“Work harder on yourself than you work on your job!” Jim Rohn was a network marketer himself and he is America’s foremost business philosophers who had mentored the likes of Les Brown, Anthony Robbins or Darren Hardy. These thought leaders are influencing the next generation of leaders in the 21st century. Many principles that Jim Rohn talks about stem from his years working for a multi-level marketing. He articulated perfectly what it takes to become successful in life by looking at our way of thinking, how to control our finances, master time and live a richer lifestyle. Jim Rohn has impacted millions of people and continues to do so through the various materials (books, audiobooks, and video seminars) he has left.
The problem with men today is that we do not think. Most people do not spend enough time to refine their philosophy for a better living. The blaming culture, irresponsible spending and “microwave” mentality has eroded modern society. When we are being honest with ourselves and choose to live with integrity, we have a better chance to enjoy a fulfilled life and leave a legacy that the next generation will be proud of. That BBC 3 program did not explore those aspects of network marketing and instead fuelled the fear that has already festered the hearts of many desperate individuals who are looking for a better existence.
Today, people finish their degree with a crippling debt and struggle to find the job they studied years for, settling for being a Uber driver or working in a call centre. Few of them succeed and it’s not different in network marketing. But why does that industry get such a stigma from people who don’t even understand how it operates? There is nothing wrong in wanting to earn an extra income and learning how a business works while at the same time, helping people to do the same. The world is changing and to survive, one must adapt to his new surroundings. Life as we know it is a survival of the fittest. Dinosaurs are extinct. Lions are the new kings in the jungle. Although human beings are animals, we are in charge of our destiny. Change happens when the pain of staying the same is greater than the pain of change.
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