Title: MLM Is It A Scam Or Not? Word Count: 669 Summary: The network marketing industry, als o known as multi level marketing (M LM), has become one of the major co ntroversies in the business world. Both advocates and detractors have used strong arguments defending the ir view. The detractors have condemned MLM a s a scam because the system falsely claims instant riches with less ef fort based on a “pyramid” marketing scheme that expands a business imp roperly by promoting too much hype and misleading facts. They also note that 95%... Keywords: mlm, network marketing, residual inc ome Article Body: The network marketing industry, als o known as multi level marketing (M LM), has become one of the major co ntroversies in the business world. Both advocates and detractors have used strong arguments defending the ir view. The detractors have condemned MLM a s a scam because the system falsely claims instant riches with less ef fort based on a “pyramid” marketing scheme that expands a business imp roperly by promoting too much hype and misleading facts. They also note that 95% of the MLM business opportunities fail, with s upporting evidence. There are huge profits involved only for the top p erformers and not for the vast majo rity of the distributors. The proponents of multi level marke ting insist that it is one of the b est business models to create wealt h without investing large capital a nd on a short term basis. On the ot her hand, they also note that it re quires a lot of effort and it is no t a ”get rich quick scheme”, pointi ng out that this approach to market ing has been taught as a mainstream course in universities. Although it is not common, if ever, to find this type of course offici ally given in Ivy League schools, a similar course at the University o f Illinois at Chicago does exist (h ttp://www.uic.edu/depts/oee/network marketing/index.html ). The proponents of MLM support their arguments by claiming that there a re many cases of people who succeed ed in the MLM industry with a small amount of start-up capital and onl y by following a specific plan put forth by the original company. They also differentiate the MLM from “p yramid schemes” because the first c ontains a product or service with a legitimate company which supports it. On the other hand “pyramid schemes” contain no products or services, o r they include “pseudo products” in order to justify the existence of the “opportunity” Another argument against MLM is the bogus claim of duplication. Nothin g can be duplicated since every ind ividual is unique and, under no cir cumstances, are we all capable of b ecoming top salesmen or developers of down-line, i.e. MLM marketers re cruited as salesman, referred to as “independent business owners”. Act ually, a charismatic salesman in th e network in this scenario rises in the ranks of the pyramid by earnin g money from these new recruit’s ha rd work. The MLM advocates that duplication is possible only when the marketing plan and the tools have been advan ced by the mother company in order to be duplicable for the majority o f the distributors. This implies th at whenever the mother MLM company is in a position to provide such a tool, then ordinary people with lit tle to none marketing background ca n copy the marketing techniques and tools and promote their MLM opport unity successfully. Another downside of MLM is the expl oitation of our relatives urging th em to join our MLM opportunity whic h oftentimes stresses family relati onships unnecessarily and is consid ered by many to be a dubious market ing tactic. Some proponents may counter that th ere is no need to beg your relative s for sales; instead, what you need is qualified prospects who are int erested in your offer. That can be accomplished by purchased targeted leads or specific advertising metho ds. The list could go on. Maybe not eve n an exhaustive book would be enoug h to note all the arguments both si des deploy. Maybe the problem is th e conundrum itself, in which we hav e to choose between demonizing or c anonizing the MLM industry. Since n othing can be duplicated, everythin g boils down to how the individual marketer presents his material to h is prospects. Therefore, one can co nclude the MLM system is good for s ome and not for others, so there is no need to disparage it or support it in the first place as a third p arty observer. In that way of thinking we will not find answers. Only detailed consid eration of each and every MLM compa ny would lead to more accurate conc lusions and that means thorough exa mination of the products or service s, the marketing and compensation p lan, the marketing tools , and of c ourse the company’s support and bac kground.
Pages to are hidden for
"MLM Is It A Scam Or Not"Please download to view full document