Everyone seems to have a friend or family member that’s been suckered into a multi-level marketing road to nowhere. While you may have no trouble identifying Amway, Zrii, Arbonne and the like as pyramid schemes, convincing naive loved ones, blinded by get-rich-quick dreams, is another matter entirely.
USA Today’s Rhonda Abrams is there to help you out, with red flags that give away the truth about shady multi-level businesses:
•Recruiting competitors. No one in legitimate business wants competitors. In MLM programs, your goal is to get lots of others selling the same product or service. In real businesses, you’d pay for exclusive territories. In MLM, you recruit competitors from among those nearest to you – in your church, neighborhood, friends – your best sales targets.
•Pay to be a customer. You’ll buy products or services you sell as well as training materials. Overwhelmingly MLM revenue comes from those recruited to be ‘business owners’ within a program. I view most MLM programs as thinly-disguised schemes to find customers, not build businesses.
•You’ll face pressure. Expect to be required – or pressured – to buy samples, marketing materials, training courses and tapes, attend seminars, and more. You’re very likely to spend far more than you’ll ever bring in from sales.
•You turn your friends and family into “prospects.” MLM programs typically suggest you sell to – and recruit – people you know well. Do you really want to be constantly beseeching those closest to you?
I’m printing out the column and taping it to the forehead of the next glassy-eyed salesman pal who asks me to stop by for a party at which I’ll discover an “exciting business opportunity.”
Strategies: Is multi-level marketing a good choice for you? [USA Today]