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Without
doubt, MLM (Multi-level marketing) has a poor
reputation among many people, and often with good
reason. However, is MLM itself immoral? In
this article, I will discuss some of the morality
issues of MLM, how they relate to the Internet, and
how you can be successful while keeping your
conscience clear.
To begin, let's discuss
some of the major reasons why MLM is viewed
skeptically.
- Dishonest claims
- If you have ever heard a MLM pitch from a friend
that "wanted to come over to discuss a
business opportunity," you know that the
diagrams of wealth and huge organizations look
really easy--at least on paper. In reality,
MLM is anything but easy. Only certain
people have the skills and drive to be successful
using conventional MLM philosophy. By the
time most MLM distributors have discerned the
tremendous odds they face in order to be
successful, their new business has failed, and all
they have left is a rather sour taste in their
mouth.
- Emphasis on wealth and lifestyle
- MLM is often sold as
a "get-rich-quick" scheme instead
of a honest business built on hard work. While
money itself is amoral, certain attitudes toward
money are immoral, and unfortunately, those
attitudes are abundant in MLM.
- Money over relationships
- Many people find it
distasteful that their own friends and relatives
will lie or mislead them about the wealth and
prosperity of MLM just to make a little money for
themselves. If, in the past, you have
been misled by someone close to you regarding an
MLM opportunity, you probably felt a little
betrayed when you discovered the truth.
- Worthless or overpriced products
- In many cases, products have proved to be
worthless or fraudulent, and in some cases, they
have even been found to be dangerous (especially
in the health industry). Some MLM companies
put much more focus on building an huge
organization than selling products. Such
companies are actually running a pyramid scheme
instead of a legitimate business.
- Dishonest companies - MLM companies are
notorious for engaging in illegal activities such
as price-fixing, false claims, and not paying
their distributors. Many people are victims
of the practice of front-loading, which means that
distributors are encouraged to make very large
purchases when they join even though they have no
realistic way to sell the products they buy.
In actuality, all of the above practices are as
prevalent in non-MLM businesses as in MLM
businesses. But because MLM often influences
relationships between friends, relatives, church
members, and neighbors, the
resulting problems often affect people on a personal
basis.
Regardless of its problems, the concept of MLM is
perfectly valid in itself. A large part of the
cost of any successful product is its
advertising. If you have ever been to a
timeshare presentation, you might be interested to
know that 60-80% of the cost of the timeshare is
marketing costs. In MLM, between 40-60% of the
cost of the product is its marketing cost. A
traditional company could choose to spend its
advertising dollars with television ads, but a MLM
company chooses to spend its dollars on commissions
for its distributors. Of course, either option
is perfectly legitimate.
Likewise, the ownership of your own small business
is a worthy goal. Our country is blessed with
thousands of small business owners that contribute to
our overall financial prosperity. Some people do
not like the restrictions of working for large
companies, and certainly, they are free to pursue
working for themselves.
So how can you enjoy the benefits of MLM without
sacrificing your integrity, conscience, and
relationships? The answer is simple. You
can simply choose to make the right decisions related
to the way you run your business. After all, it
is your business.
This is my formula for keeping your conscience
clear. First, choose only a company with solid,
legitimate products that will actually help
people. Market those products (more so than the
business opportunity) to the cold market. Then,
as your customers fall in love with the products, sign
them up as distributors so that they can get better
prices for themselves. Then, just play the
numbers game.
By referring to the numbers game, I mean just play
the percentages. Only a small percentage of your
downline will actually ever produce much volume.
Identify these people and work with them to develop
their own organizations. Do not try to sell the
idea to the others that they can have a private jet in
three years if they start working harder. After
all, you know better, and telling your downline lies
is the wrong thing to do. Because of the large
number of distributors you can sign up over the
Internet, you will have always have plenty of other
quality prospects to work with.
In
summary, you can remove the negatives from MLM and
make it a perfectly ethical business. I hope you make
a decision to put your integrity in front of money, no
matter what it may cost you in the short-term.
In the long term, you certainly will be glad you did.
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