Listnerds makes me remember a forgotten experience

Jumping on a succes train

 

Since Listnerds got on our Hive Blockchain, many of us have jumped on this train, and with success! Just look at @HenryRamos for example. She has developed a very successful strategy and through her many tutorials she has thoroughly explained Listnerds so that any newbie can use Listnerds. A great achievement!

 

Slow-starter

 

I'm more of a slow-starter myself, as I always am, but I also look up my information thoroughly before I start anything. Although it can sometimes happen that I already start a bit and only then look for information. Listnerds is a mailer, but of course it also falls under Marketing! And I looked up some information about that. During my search I came across a lot, so much that it made me dizzy at times. And not only information about the do's and don'ts of course.

 

Multi-Level Marketing

 

One thing I stumbled upon immediately made me think back to an experience I had myself. And that experience is one that made me hate shilling referral links. It reminds me of my experience with Multi-Level Marketing.

 

And yes, of course I know that there is a very big difference, the shilling of a referral link or the Multi-Level Marketing I talked about earlier. But still, I've become wary of all this.

 

 

Now of course you want to know what my experience was, and I will certainly tell you. But first let me tell you what Multi-Level Marketing is. Because that may not be clear to everyone.

 

What is it?

 

Multi-level marketing, also called network marketing, is a business model in which sellers can earn their income by selling products or by recruiting new sellers. Multi-level marketing uses a personal relationship between buyer and seller. It is therefore unusual for you to order yourself from a brand that uses network marketing. Instead, you are often approached by a salesperson from such a company.

 

A seller of such a company can therefore earn his income in 2 ways: 1) by selling the products of the company for which they are employed, and 2) by recruiting new sellers for the company, because they receive a commission. . What they are also allowed to do is resell products to other sellers, so that they can resell them again. They are also allowed to sell the products themselves to buyers at a discount.

 

Basically this doesn't sound that bad, you might think. That is in principle correct. A company uses salespeople to market their product. That's not so different from a television ad, or a sponsored post with an influencer, is it? Correct! And there are certainly companies that apply multi-level marketing, where this goes very well. There is therefore nothing wrong with this. However, problems can arise with multi-level marketing.

 

Why can Multi-Level Marketing be dangerous?

 

One of those problems is that it can look like a pyramid scheme very quickly. A pyramid scheme, also known as a ponzi scheme, is a 'business form' in which 'sellers' earn a commission for attracting new sellers. This also happens with multi-level marketing. However, the problem with a ponzi scheme is that it is the only way the sellers can actually earn a serious income. So they start recruiting people, because they earn from this themselves, while they actually know that the only way these people can actually earn is by recruiting new people.

 

In this way, a pyramid is created in which sellers constantly create a new layer of new 'sellers'. These new sellers, in turn, must do their best to create a new layer of "sellers", and so it goes. You know that things go wrong here. It's time to get people boarding!

 

When you are at the top of the pyramid, you can actually earn well, because then you rake in the commissions that are earned everywhere. When you're at the bottom, however, you're screwed. It is becoming more and more difficult to earn something there, and certainly the serious incomes are almost impossible. And that while you often had to make a (substantial) investment to be allowed to become a seller at all. So you actually have to recruit people in order to earn back your investment in this way.

 

Where multi-level marketing is intended to become a new marketing channel within a company, you quickly run the risk of turning it into a pyramid scheme. So MLM is not necessarily bad, but the risk is certainly there!

 

This kind of pyramid schemes also occur within crypto. Pay attention to this, and again, listen to your gut if you don't quite trust something.

 

How do you recognize it?

 

So getting involved in a multi-level marketing system can have adverse consequences. Often you have to make an investment to become a part. At that moment you think you are making a good investment, but it may just be that you work yourself into a complicated system. A system that you will later convince people to become part of. You already know you can't get involved in this. But how do you prevent that, what can you pay attention to?

 

    The company has no real product.

 

You will often be approached by an employee of an MLM. If this person seems focused on 'building a team', or makes statements like 'you fit us perfectly', there is a good chance that they are an MLM. The seller does not really sell a product, but tries to make you part of the team.

 

    Absurd claims about the product.

 

MLMs are often used in the health and wellness industry. When absurd claims such as “Wrinkle-free within a week”, or “A healthy weight in 2 weeks”, are made about the product, there is a chance that it is an MLM. So watch out for this!

 

    "You have to buy a good stock"

 

Often you will be convinced by the sellers of an MLM to buy a good stock of products, so that you can 'start the sale well'. This initial purchase can sometimes run into the thousands of dollars.

 

These are the most important signs that can warn you that you may be dealing with a bad MLM. Never forget to listen to your gut. If your gut warns you, it just might be right. Even if your mind does not immediately recognize one or more signals.

 

To show that there is not only "BAD" in MLM, but also “GOOD” MLMarketing, I'll give you the company AMWAY as an example!

 

Amway

 

A company that sells food and beauty products and operates according to the principles of MLM. However, the focus of Amway's salespeople is entirely on selling the products. The employees do not work for a salary, but purely based on the number of products they sell.

 

The company was founded in 1959 in the United States and it costs $100 a year to become a seller at Amway. Amway has a yearly turnover of $8.8 billion purely in product sales.

It's simply a company that uses a certain marketing strategy, in a good way that has nothing wrong with it.

 

However, the companies below, are examples where we see MLM from the bad side.

 

•     LuLaRoe: Because of the slogan: “Creating Freedom Through Fashion” you wouldn't expect to get yourself in quite a mess when you work with them. Yet the reality is somewhat different. With a startup fee of $6000 dollars, I don't immediately think of freedom, it's quite an amount you have to pay to be able to sell their fashion. And if you've been crazy enough to do that, you don't even get to choose what to sell. You get a package sent, and you have to sell it. No own contribution possible. It doesn't sound like freedom to me in any way. Not financially and not in terms of choice.

    It is clear that several people think this way. LuLaRoe has since faced several lawsuits after thousands of people actually filed charges and called it "Scam".

 

•     Rodan + Fields is also a company that still exists, but there are many complaints that the company uses the multi-level marketing method in wrong ways. Rodan + Fields is a skincare company that was founded in 2007.

    The company promises a wonderful life for people who join them as a seller. They could have a lucrative but flexible career at Rodan + Fields. They would get free vacations and be able to earn '6 figures' ($100,000 or more) without too much effort. All they should be doing is promoting Rodan + Fields products to people so that they are sold. You already understand that the free holidays, and also the '6 figures' have not yet become a reality.

    And Rodan + Fields is also currently involved in some lawsuits. The most important of these just has nothing to do with their broken promises. The main lawsuit is about the undisclosed side effects of their product the Lash Boost.

 

And then the last example I want to give you of a company with MLM that falls into the category “BAD” is HERBALIFE

 

That is also where my own experience comes into play. Many years ago, in 2007 to be precise, I came into contact with it myself. I was living off my parents' inheritance at the time, had my young puppy Rowan, and was looking for an income that didn't require me to go to a boss 5 days a week.

 

A friend of mine was on a weight loss program and she was using Herbalife for that. She learned through the person she bought her Herbalife from that Herbalife was looking for sellers. she emailed me and gave me her saleswoman's phone number. I got in touch and this woman got me interested by telling me exactly what I wanted to hear.

 

The possibility to work from home, and to sell my products through a website. She told me I should come to a meeting. And then she invited me to come to Motel Nuland later that week in the evening. There would be a meeting and the quarterly presentation of the company.

 

I thought it was a good opportunity to get to know the company. Not even realizing what kind of business structure there was. That has changed after that evening. In that respect it was good that I went.

 

The presentation only showed numbers that knocked me back, but there were also strange things to notice here and there. For example, I found it very strange that a number of people were called forward because they had performed so well in building their team, mentioning amounts that sounded completely unrealistic to me. I thought it was strange that there was no emphasis on the products anywhere. That was what a company should be about, right?

 

That was when I got my “job interview” with the person my friend bought her Herbalife from. Instead of the questions I expected, I was asked straight out if I could invest 5000 euros to start and when I thought I had transferred it into her account. Then she would send me the starter pack.

 

At that moment I fell silent. The woman saw my doubt and hurried to reassure me. She told me not to worry. I would have earned that 5000 euros back in no time. It would be more difficult if I didn't recruit people. As long as I started to focus myself on recruiting people and expanding my team, we could both live well financially. I only needed 5 people to earn my 5000 euros back. She also proudly told me that I was her fifth … and at that moment I interrupted her. I came out of my shock state and told her that she really had to look further, because that I was not going to participate in this scam at all.

 

The reason I was interested in the company had nothing to do with recruiting people for a team, it had nothing to do with building a team in fact. The reason I was interested had everything to do with a product on a natural basis that would be good for your health! I wanted to help people, not scam them. And that I could do that from home via a website, that was what I wanted. Just earn my money in a fair way.

 

She did not give up immediately, but told me that that was also a possibility, only then it would of course take a long time before I had earned back my 5000 euros. I answered her that I didn't intend to start Herbalife at all, after all I'm not going to pay 5000 euros to start somewhere.

 

So much for my own experience with Herbalife, and bad MLM. An illusion poorer, but luckily at that moment I still had my money in my bank account. I lost it later for completely different reasons. LOL

 

Herbalife has never been officially called a pyramid scheme by a court or other official party, but has certainly been accused of this by, for example, ex-employees. In fact, the Federal Trade Commission, a US government agency that protects consumers from monopolistic companies, for example, has compensated as many as 350,000 people who lost money as sellers to Herbalife. This is one of the biggest actions the agency has ever taken. If that doesn't indicate that things are definitely not going well within Herbalife, then I don't know what is.

 

I said it before. There is also an example in crypto. And there we have it…

 

BITCONEEEEEEEEEECT

 

The best-known example of what appears to be multi-level marketing within crypto is BitConnect. If you started with crypto later, this does not mean much to you of course. So just a short explanation. BitConnect, was an open-source cryptocurrency associated with a high-yield investment program. Founded in 2016 and taken off the air in 2018.

 

If you would invest in BitConnect, you could lock it into the platform and receive 1% per day on it. This would compound daily, which could give you outlandish returns on your investment. This attracted many investors. The token was released at a price of $0.17 and at its peak, a year later, was worth a whopping $463.

 

However, it turned out to be too good to be true. The amounts that came in from new investors turned out to be used to pay the interest of existing investors. This is how the money moved up in the pyramid and this was a certain ponzi scheme.

 

The lawsuits that followed revealed that BitConnect had defrauded their investors for as much as $2 billion. The founder of BitConnect, Satish Kumbhani, should be prosecuted for this according to the Securities and Exchange Commission (SEC). If he came to the US, he would reportedly have to spend up to 70 years in prison.

 

I have never invested anything in BitConnect myself. This was just before my time, but many have lost quite a bit here.

 

Multi-level marketing is basically just one of the many marketing methods that exist. In multi-level marketing, salespeople are recruited who directly promote the product to the customers. However, in addition to a commission that can be earned on the sale of a product, a commission can also be earned on recruiting a new seller.

 

A problem arises here. In this way a real pyramid scheme can arise. Something that is not positive, and even illegal.

However don't make the mistake in thinking that Multi-Level Marketing is always, and only bad. Multi-Level Marketing can also be a very beautiful form of Marketing.