From a legal standpoint, the people who run MLM companies are actually obliged to file documents that can give details about their earnings, which will not say anything at all about their expenses. But if we are going to really analyze the data derived from those documented reports, it can be understood that the majority of the members of any MLM are losing money, or are barely breaking even.
The ones that are making the most money don’t even exceed the 2% margin – they are those that have founded the company or those that are the earliest to join the group. Oftentimes, these people are the ones who are invited on stage and are tasked to give out their testimonies and success stories.
Because of their compelling “rags-to-riches stories,” this thing called “survivorship bias” is spread rapidly. Because the financial improvement of those people’s lives is in fact very real, the newcomers would have this notion that they can somehow replicate the strategies utilized by those people.
What they are so blind to is that the newer you are to get into the system, the harder it will be to sell the products and to find new recruits. That is where the flow of the system becomes truly disastrous. It will only be a matter of time before they realize that the dream they were promised, was a lie.
And those self-help reading materials that you bought or were offered to you for free? They were there to make you hooked into the system so that the idea of turning away will not exist in your mind. “The reason why you’re failing is that you didn’t put in enough effort. You didn’t work hard enough, and you didn’t think positive enough.” – This is what they will tell you if you insist on asking why the methods didn’t work.
But are all MLM companies really bad? The answer to this is simple – some companies are actually rock-solid, though if they do belong to the “legit and long-lasting ones,” they are nowhere near as profitable as the scammy ones.
It is because, in those MLM groups where greed is the main driving force, there are core concepts that are there that are actually bad for the business to begin with. First, there is no screening process. There is no interview or any drills that can actually determine if you are capable of being a sales agent of the company.
And since most of the interested parties who will join are only focused on the numbers that represent their income dancing inside their heads, the marketing system has already collapsed before it is even built.
Successful companies are built around solid tactics and strategies. And if the people working to execute those methods are not equipped enough to carry them out, we can’t hope or expect the business to thrive and grow.
The problem lies in the very idea that if you have the money to buy the starter kit, then you can become a part of the company’s alleged expansion campaigns. Of course, that makes the system very attractive. But then, it is also the very factor that becomes its own weakness.
Because of that method, the company becomes filled with people with no marketing experience, no proper training, and no sense of accountability. And since those people are encouraged to recruit people with the same state of mind and low capabilities, then it is an ugly business scenario indeed.
Since there will be fewer people to recruit and sell products to, the concept of supply and demand starts to get totally destabilized. The demand for the products becomes thinner and thinner while the supply continues to grow.
Also, the idea of being “your own boss” becomes detrimental to the overall structure of the business. Because of that idea, there is no uniformity of the selling or buying transactions which could also spell trouble.
The Recruiting Process Is Extremely Difficult
To maximize your earning potential, you are also urged to motivate others to join the group. The allure of this comes from the very idea of earning without really doing anything in the future. Just as stated in the charts and diagrams that are shown to you in your meetings, you can really earn great amounts of passive income simply by recruiting others.
You are told that you can earn $100 for each of the 5 persons that you can recruit, and if those 5 people can recruit 5 people each as well, you can also obtain portions of their earnings, and so on and so forth. Strands of numbers are piling up on your head, it is truly a great way of becoming rich in the shortest time possible.
You are told to list names of people: family members, co-workers, relatives, anyone from your social circle. And to broaden the list even further, you are urged to connect to those that you haven’t seen or spoken to for years, those that are only on your social media contacts, and even those that have liked your posts only once.
You start telling your family about the “wonderful opportunity” that you’ve tapped into. Oddly though, you stop thinking about them as family, but rather, as business objects. While so doing, you keep on reading those self-help materials they asked you to buy, you continue attending their seminars, their meetings, and gatherings.
They tell you it’s necessary so that the positive vibes that you accumulated don’t get panned out. You are once again bombarded with thoughts about how those who were there before you are “living the dream” because of their hard work and persistence.
But in spite of the optimism that you’re cloaking yourself with, you get a handful of rejections from your friends that you want to recruit. Some of them did buy the products you offered, but other than that, they don’t show the same interest you’re having.
You did get a few who are very willing to join though, but they tell you that their budget is just not enough yet so they can buy that starter kit you purchased.
When you raised the issue to your upline, and to your upline’s coaches, they will tell you that you didn’t get enough recruits, and you didn’t sell enough products because: “You don’t work hard enough,” and “you’re not being too positive.”
They will also create new ways of saying that you need new friends since the ones you’re currently having are not positive enough with the company’s goals. You are motivated to post more on your social media account about how good the company is, even if it means you have to fabricate a fake lifestyle that can speak about your alleged success.
Very informative 👍