Is MLM a Scam

Multi-Level Marketing

Before we get into our perspective on MLM it needs to be said that there are a significant PONZI schemes that masquerade as MLM. We investigate and report on a number of these – have a look for MLM on in the blog or on the ‘Good & Bad’ page of our site.

Some MLM systems, while legal, are reprehensible to many. The attrition rate from these systems is high and an attrite will frequently be both disillusioned and highly critical. I’ve heard numerous people say, “we’d love to have you around, just as long as you don’t’ say a word about BNXBZ”!

The MLM’s, almost to a man, will tell you that they market a superior product (justifying the cost). They also claim that through their system they are eliminating the need for advertising and other traditional marketing methods. What they do, in reality, is rely on the most expensive marketing method – personal selling. What you will be both expected and required to do to ensure any degree of success.

What impact does this have on the cost of the product? Here are some typical numbers;

25% for the MLM product seller 10% for the person that recruited the seller (first up line) 2% for that person’s up line

That’s 37% of the product price for marketing. Compare that to mainstream sales where the mark up is typically 10% or less.

Claims by the MLM that distribution is more cost effective are pure bunk. It’s cheaper for them, yes. The cost of distribution becomes the personal burden of the product distributor.

Worse still, the MLM member, just to keep the membership active, will be the consumer of most, if not all, of the product quota required.

Here’s the hard sell; to be successful in MLM you are going to work hard; without a growing downline you do not succeed (except in buying overpriced products).

Attrition from MLM is typically high, many recruits leaving within months of joining. You have to keep recruiting to make up the attrition and then hope for down line growth.

While it is true that the system has glowing success stories – that are heavily leveraged in marketing pitches, it is also true that there are large numbers of very disgruntled, anti-MLM people that fall out of these systems.

There are viable alternatives to MLM and we’d like you to look at one of these under “At No Cost” on our site.