Don’t Fall for the MLM Scam
Just because a business has been online, or on-world, for years, doesn’t mean it’s “legit.” Just because it’s got a nice website and glowing testimonials (that you can’t independently verify), and hasn’t been shutdown by regulatory authorities, doesn’t mean it isn’t a ‘scam’ that really does exist for your benefit, not the owner’s.
Personally, I look at the multitude of Multi-Level Marketing (MLM) schemes out there, and wonder how the hell some of them have gotten away with it for so long?
And why the hell people continue to signup and give them their money like cult-member Moonies.
More Red Flags Than a Chinese Mayday Parade
I think, first off, the initial red flag has to be where the business is registered. If it’s a couple of countrymen of yours, then why haven’t they registered the business in the financially regulated home country, and chosen instead to decamp to some offshore principality or a banana republic with no extradition laws and a banking system that asks little to no questions – no matter who comes asking.
Now, there are undoubtedly legitimate reasons for registering elsewhere – but there’s some parts of the world that it’s more about evading the law, not tax. It’s not done to save on a tax bill – like big companies do by settling in more tax friendly parts of Europe – but to avoid the stricter regulatory authorities (and maybe even jail).
The people who do that aren’t setting up in the sunshine because they’re living the dream, they’re doing it because the shit they’re selling won’t be called on its stink in that part of the world.
And a lot of these MLMs stink.
They sell themselves as a “business opportunity” to you; a chance to escape the 9-5 grind and be your own boss. More than that, to become rich while doing it. Don’t stop at just making the same living, upgrade your life to a mansion and a supercar, too!
And you don’t need any prior business experience or acumen to do this feat with the “proven” system.
It’s never “guaranteed” but it’s always “proven.”
I mean, come on, get real – in what other field would anyone believe you don’t need at least some talent and experience to be successful? How can you just walk into the ‘job’ and start rolling right after the induction and the ten step training course – that you could complete in a day, not a week if it wasn’t eked out like they do it.
Your bullshit meter doesn’t start ringing there and then?
I’m not saying that I haven’t been intrigued by the advertising on these things, hell I’ve sat through enough webinars and had to create a separate email account to deal with the deluge of marketing that comes from signing up to have a look-see.
I’ve even come close to joining on occasion.
But I never have.
Because I am never joining something where it is not the application of the method that will generate me income, but the selling of the method to other people.
The ‘business’ is selling the idea that you can have a successful business; not actually creating one independent to the idea.
Now, these scammers try and get around the technicalities of being an out-and-out pyramid scheme by ensuring you first buy-in to a ‘product’ that could allow you to do just that – create a business independent to selling the product.
That will usually take the form of some flavour of internet marketing training.
Which will cost you anything from $2,000 to $50,000, depending on what level of ‘advanced’ and super-secret proprietary system knowledge you’re purchasing.
Information that you could pretty much get for free off the Web or at a fraction of the price in a book or some other course.
The real reason you buy that shit is not its intrinsic worth, but because purchasing it then allows you to sell it to others – and receive a big commission from doing so.
You’re not prevented from selling it until you buy it… you just won’t make any money, the guy above you will.
That’s another red flag: a convoluted commission system that’s based on hierarchies and leap frogs some of your commissions, kicking the revenue up to the person above you.
To put the products in perspective, would you purchase a package on how to learn to drive for $10,000 based solely on what it will teach? Or are you only doing that because you’ve been sold on the idea that other people will be that stupid – if they think they can sell it on and get $9,000 for doing so each and every time, too.
You know, buy the same overpriced junk: just like you did.
And that’s your business. Trying to convince other people to buy a vastly overpriced product, so they they can make money by selling the same vastly overpriced product. It’s compensation, and the products have to be overpriced to make the commissions big, and thus the sale, not the product, so alluring.
That starting to sound like a pyramid scheme?
But, as I’ve said in other posts examining MLMs, the (cult) members will proclaim that you can use the training to market anything, thus it is not a MLM pyramid.
I wouldn’t argue with that either: you could use the training to create any other sort of independent affiliate marketing business.
However, show me an example of one MLM members who’s done that? And why these MLMs run leaderboards on who the most successful salesman of the MLM is in any given week or month.
Don’t kid yourself that the MLMs are about anything more than recruiting more people into the MLM by selling them membership: it sure isn’t about the product or any ‘training’ per se.
These people will tell you to take out a loan to buy their shit; sell your car or drop out of college and use the money to purchase the next level as an ‘investment.’ What sort of low-lives would do that? Hurt you that way and try and pretend that they’re helping you?
And when you don’t, berate you and try and shame you into doing it, or tell you what you’ve already spent in good faith having been told it will help you, is worthless without the next add-on or fee.
People more interested in lining their own pockets, and to your detriment, is the kind of low-lives who’d do that to you.
I mean, jeezo, how do these folks sleep at night? Knowing they’re selling overpriced shit that will be of no benefit to those that they can con into buying it.
Is it possible you could make money from these sorts of scams, though?
Absolutely, and a handful of marketers do. The ones that already have a big list and get in at the start.
These guys are usually approached to join in the initial launch, they don’t have to go looking for the ‘opportunity’ because the people launching it know these are the best guys to get other folks signing up. They don’t care about payouts to these dudes, that’s just marketing costs! It’s the suckers they’ll pull in that they’ll make their money from.
Empower, before it sunk, had a disclosure of earnings page: 92% of members made less than $10 a month.
And you can bet that 92% were responsible for putting millions into the coffers of the system with the never ending up-sells and conventions that were ceaselessly pushed.
There’s also an insidious cult-like atmosphere that’s fostered in these programs, and not too hard to encourage as after folks have bought-in, they don’t want to maybe face the reality that they’ve been duped. Empower used to shame people, and have a mantra-like chant about going “all in” and not being a pussy.
That is scary shit. When do we start drinking the Jonestown Kool-Aid, too?
Hangman’s jokes aside, the cult element is very real and prevalent. People tie their identity up in being a member of the program, privy to this ‘secret knowledge,’ and even if they’re not making a dime themselves from it, will protect it with all the zeal of a Scientologist.
That’s all great for the owners and the folks at the top of the pyramid: keep bleating the party line and buying the shit. Remember, as above, 92% of the faithful aren’t making anything.
Just remember that, and remember the person selling you it is in a hole because they’ve already bought it, and are looking to drag you in too, in the hope of using your body to stand on so they can get out.
A business should be sustainable even if the source of the advice disappears. Meaning, when Empower went tits-up, no one was carrying on with their business model.
How could they? The business model was to sell Empower. That was what all the affiliate marketing revolved around. Just like it does every MLM.
So a lot of people, lost a lot of money, because all those four figure priced products they purchased with the intention of selling on…? They vanished in the same puff of smoke.
How about trying something that does actually sell more than just itself, then? That actually tells you how to make money from more than just marketing the brand.
For that I’d recommend going to Wealthy Affiliate. Its focus is on creating an affiliate business that sells products, not the training.
It doesn’t cost $$$$$ either, and there are no up-sells. Imagine that. Novel, if you’ve ever experienced a MLM.
Read my review here.
Don’t take my word for it though, have a look for yourself. It’s free to join, none of that “credit card required for verification” bullshit, and you get a week’s worth of full membership to give you time to look around and check the place out, see if it’s for you. After that, your membership reverts to the free level.
Don’t get sucked into something that will suck you dry and relies on you sucking in others. That’s just being a marketing vampire, with as much interest in people as Count Dracula had.
Do something for yourself, that also benefits others, and won’t cost you the down payment on a house.
If you’ve got patience and don’t expect to be a millionaire by next Tuesday, it’s possible to generate income from the Web, and still be able to look yourself in the mirror.
And not lose all your friends and family by trying to get them to signup to the “great opportunity” that’s done nothing for you.
Wealthy Affiliate, have a look, and if nah, then no harm done and hasn’t cost you a penny.
That there is a green flag in my book.
Recommended further reading:
A classic from an actual millionaire:
Crack the Code to Wealth and Live Rich for a Lifetime!
by M. J. DeMarco