Some words about MLM
MLM (=Multi Level marketing) is generally a pyramide scheme. That means, that you look for people that join under you, and you get comissions from their sales too. Now, this is not bad in general - but some things must be considered.
Explanations of terms at the bottom!
This is my personal opinion, and it is based on my searching and investigating the internet in the last 3 years.
Let me say first: There are good and serious MLM programs!
But, as it seems, most of the MLM programs on the net are either not worth the effort you have to invest, or then they are started to fail. Let me explain. Some MLM programs don't pay for the common netizen, because you can only receive a considerable amount of comissions if you have some dozen people (mostly some 100's in four, five or six levels) working under you. So, only the tip of the pyramid is really making money, and they do not sell, but recruit a lot of people to work under them. And these people (the downline) invest time and efforts (often also money). That is why I say - these programs are not worth to invest your efforts. Here is a rule: If you cannot make a considerable amount of money from your own sales, don't join! (Well, if you are good in recruiting people, then you must join these programs!)
Then there are the programs that are started by clever vilains (:-) to make good money in short time. They have a clever idea, they know how to sell this idea to a lot of people (that means how to talk peole into it), and as soon as they should pay out the whole thing will fall and you don't see a penny of your invested money again. This is fraud and the authorities begin to investigate the big cases. But mostly, the amount that you or someone paid is less that the amount that would be needed to take these people in court, and so some of them do their games on and on.
Now, these are earnest words of warning. As I said in the beginning, not all MLM programs are bad.
I try to give you here some hints: I would never join a program, that
- promises excessive riches with no or little work (This cannot be done legally in the real world, and the Internet IS the real world, even if some people would like to make you believe different.)
- that does not pay min. 15-20% of the product/service price as comission on the first level.
- that pays nearly as much in the second, third etc. level as in the first. (You are always first level for yourself, and as more comission is paid to your downline, as less to you... )
- that does not clearly state where the company has its seat, so I can check it out. (Even this does not help all the times to avoid fraud)
- that is promoted by unsoliticed e-mail (spam!) -serious, long time businesses do not use spam!
- that has its main website on a free provider. (Sorry, I like FC, and for some types of business this is okay, but not for a mainsite of an MLM, it shows me that the makers cannot or do not want to invest money, then why should I?)
I would always try to find out what level I am in when I join - if I join in level 125, then the chance that I can get enough people under me to make it profitable for me is rather small. Then, I do never pay for something I cannot use. If you have to buy something that you cannot use, chances are that a lot of others have no use either, and how will you make business then? The same with services or goods that are sold in masses. You are on the internet, check Altavista, Hotbot and Infoseek, and you know if a product or service is already widespread, and you can consider if it is worth your investement.
If people would act on the internet as they do in the real world, much less people would lose money! or, how do you plan and check out possibilities if someone wants you to buy something on the street or at your door? Just do the same with all the business opprotunities, and you will avoid a lot of loss and vain work!
And think about whom you want to invite to join under you - many prople have lost their firends because of an MLM!
Terms explained:
- MLM - Multi Level Marketing / also called pyramid scheme because it is built like a pyramid, you need to make people join under you to profit.
- Two tier program - A special sort of program, where you will only get comission for your sales and those of the people you recruited directly. Many good affiliate/referral programs are built that way. Mostly they pay a high amount on the first and less than half of it on second level. Basically, on could say this is Multi level, as it is more than on level, but most people do count these separate - hence the name.
- First, second etc. level - You are always first level for yourself, and those under you are on the second level, then third etc. This is the description of the levels of your personal pyramide. (But don't forget, you are on someones second, and someone elses third etc. level!)
- Get rich quick schemes - A netname for those programs that promise high profits without much work in short time - e.g. invest 5 $ and have 500 in a week, or make 54000 $ a month etc. These programs are a failure for most people, these high promises point always in one direction: Someone wants to have your money!
- Forced matrix: A method to limit the size of the pyramids - only certain levels with a fixed number of people can join below you - but then you start the next pyramid. May work well, but attention, also here you may lose money.
- leads - fresh leads etc. - mostly e-mail addresses of so called 'opportunity seekers' or 'prospects' - that is if you read this word, someone wants to sell you e-mail addresses that are in most (not all!) cases not useful. (Most people 'harvest' these addresses by using an e-mail collector software, that spiders websites and lists all e-mail addresses that are found) there are some serious offers, but that is another chapter to go through... (Maybe now you understand where all these e-mail messages come from?)
- spill over - someone wants to make you believe that they have so much people joining, that their forced matrixes have not eough room for them and then you can profit because they place these people under you. How about that: Why should these so called 'spill over' people not be put in a second and third matrix (=pyramid)? Some try to sell you these spill overs ?!
- More? Just ask - mailform here!
Well, a last word. Some of you MLM people may object to one or another of my thoughts. But as I said, not all MLM programs are bad. But there are much more bad ones than good ones out there. Just read some newsgroups about 'hype' and 'scam' and such things. So, if you have a good and serious (and paying) MLM, stick with it and make profit, okay? I will not list MLM programs on this site.
Hanspeter, Preacherman, NBZ advisor,
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