Fake Hustle #1: Multi-Level Marketing (MLM)
Allow me to introduce you to a series of posts that highlight the Fake Hustle (FH). What is a fake hustle you ask?
Anything that people do to try to convince themselves (and you) that there is legitimate money to be made in their activity or line of work. Basically, if there is a high sales pitch involved because the average person would see this fake hustle a mile away, it’s more than likely a fake hustle.
Run. Away. Quickly.
One of the biggest forms of the fake hustle is any type of Multi-Level Marketing program. Also called Network Marketing, Access Marketing, etc., these schemes basically necessitate that you get other people to sign up for something, then get them to do the same thing that you are doing — a fake hustle. You may have heard of some of these FH’s before:
- Tahitian Noni
- Melaleuca
- Xango
- YTB
- Amway
- Quixtar
- Mary Kay
- and on and on
A good way to tell if an hustle is really a MLM job in disguise is to closely listen to the people who present it to you. Often, they will be all geeked up to tell you about the “next big thing” or an awesome “opportunity.” These are keywords you should recognize so that you can start planning your exit from the conversation. Here are some traits and actions that you will also notice:
- Your friends — the ones you haven’t talk to in years or do not talk to on a regular basis — will call and ask about what you are doing in your life, and if you want to make more money. (this is always a trap because who doesn’t want to make more money? Except for maybe Bill Gates)
- People you know will be overly eager to get in contact with you so they could show you an “opportunity.”
- You will be invited to see a “demonstration” of something at your friends house, but they won’t tell you what it is
- You will be invited to a “briefing” and are asked to dress business casual, and again, you will not know why you are doing this
- You will be asked to leave your kids at home
- Almost always, the product or opportunity in question will have something to do with your health
- Someone will want “only 5 minutes of your time” for you to listen to a speech that is done on the spot or pre-recorded in a telephone message.
- People will try to preempt your questions or concerns by answering whatever questions they think you might have, or the ones that are most common
- You will be shown a book with check stubs of the person who is presenting the opportunity to you, or of some well-known person in that industry
- You will be shown news reports, magazine articles, and any other publication that makes the “opportunity” seem real and legit
- Virtually any question you ask will have an answer, and if it doesn’t, they will wonder why you are asking that question anyway
- You will be drawn into a room full of people who are abnormally excited and happy about whatever it is that they are selling, almost to the point where it is just plain sickening and you will desperately be looking for the exit
- You will find the representatives adorned with magnets, stickers, pins, hats, shirts, bumper stickers, car magnets, license plate frames and covers, pens, pencils, and even jewelry advertising the product they are promoting
- Basically people will treat their product as an idol, to the point where Jesus himself will be extremely jealous
- The “information sessions” are poorly disguised pep rallies where the audience is in agreement with everything the presenter says and does. Also, there will be “bona fide leaders” strategically placed within the audience to try to add to the realism of the opportunity, and sometimes they will get up and speak to the crowd
To be fair, there have been a lot of people who have made a decent living doing this kind of thing. They followed the system to a ‘T’, and it has worked wonders for their lives. I do applaud their efforts, because they have beat the odds and found something that works for them. Also, the companies that offer these opportunities these days are mostly legitimate entities, they fully comply with all laws and ordinances, and they are usually staffed and operated just like a regular brick-and-mortar business.
However, the major problem with these programs is that most times, only the people at the very top of the compensation plan make any real money worth writing home to momma. Everyone else is doing most of the hustling, and all for the same group of customers. Imagine going to the store on Black Friday, seeing virtually everyone fight over the same items. This is basically what MLM people do — they fight each other for new recruits. It tends to be a never ending cycle that can leave many very fatigued and angry at both the companies involved and themselves. You have to really ask yourself is this the type of thing that you want to do for the long-term?
Well, this serves as just a basic overview of the problem I see with MLM programs. Also, be on the lookout for a follow-up to this post, where I will have video evidence of the behind-the-scenes scheme that the marketers DON’T tell you. It promises to be very juicy.
But in general, a Multi-Level Marketing opportunity is NOT the business.
Please, no MLM’s. Get you a new hustle.
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You say -
…However, the major problem with these programs is that most times, only the people at the very top of the compensation plan make any real money worth writing home to momma…
In a legitimate MLM compensation there is no “top”. It’s extremely common for people to earn more income than anyone “above” them, and there is nothing stopping someone joining tomorrow earning more than anyone who has been involved before. How? Because it’s performance based, Whoever does the work earns the money.
Contrast this to traditional “business”. How many companies can you think of where the CEO doesn’t earn more than the VPs who earn more than the Division Managers etc etc etc.
The ‘top’ could be a certain level with a name, i.e. Platinum, Diamond, Pearl, Uranium, etc. These positions, along with the traditional business types you mentioned (CEO), are few and far between, meaning you won’t find a lot of company with you at the top. I do agree that some people may be able to make more than their predecessors, but like you said, it’s gonna take a LOT of work!!
If you like this post, you’ll LOVE the next part in the series!
Yes, it takes a lot of work, and anyone who says otherwise is either ignorant or being deceptive. A major difference with the corporate world though is that in the corporate world, generally only one person can be CEO. In a legitimate MLM *anyone* can be a Platinum etc, as long as they produce the results. (love that Uranium title btw!)
They’re not at all “few and far between”. Indeed, it’s possible for *everyone* to be a Platinum. Folk often get confused by our *strategy* of recruiting to think that the *goal* is recruiting. It’s not, the goal is to generate sales volume. Recruiting other folk, most of whom join to buy cheaper products not to make money, is not how we make money. Well, at least in a legitimate MLM, and there’s plenty I have my doubts about.
Well, business is business
Ibofightback,
It looks as if you’re in the MLM business. I agree that the goal is to generate sales volume after all, how else would you make money? What I think cooliojones is really eluding to is are the strategies used by many people in the MLM business to generate sales volume by openly mis-leading people.
It is very true that you have to work your tail off to get to Uranium status but you can’t deny that whomever you joined under is also benefitting from your Uranium status and they make it seem like everyone will get to Uranium status as long as they bring in more volume through recruting “help”.
If MLM businesses were more up front about the business aspect and making it a no-pressure option to either purchase the product for personal enjoyment OR join the business as a personal opportunity (or both, of course) I think that more people would do it. The “unintended” benefit of giving people the choice (with no pressure) would be the intended benefit of creating more revenue through volume sales.
Being a person who’s been to about 3 of those things on the list…the headache of being badgered to join is more than enough to make you NOT want to buy the product…even if it is good for your health.
Your points are definitely well taken. (Anyone want some Noni?)
Wow, it seems MsSkyBluez has a good handle on the whole MLM deal. You’ve been to about 3 meetings? How did you ever make it out?
IBO, I truly disagree that it is possible for *everyone* to be at a uranium status. The MLM business goes by tiers, and you have to have a certain amount of people under you in order to reach those stati (plural of status, if there is such a thing). If it took one man 100,000 people to get to that level, how could 15,000 more people also reach that level if they needed the same number of people? Sooner or later, you run out of people.
I wish I could draw a diagram to help illustrate this, and I might attempt that in a future post. But IBO if it’s not too much trouble I would like for you to show us how so many people could be on the same level… there might be something that I am missing here and it seems as if you may have much experience on this topic.
cooliojones – depends what “uranium” status is! Platinum, which is the example I gave from Amway/Quixtar is 100% based on volume, not recruiting. You can do it without having recruited a single person, and indeed, that has been done. People confuse the strategy of using recruitment with the goal. The goal isn’t to recruit people – it’s to generate volume.
Now, a Platinum in the US has a sales volume of around $25,000/mth. You could go an do that yourself, or you could find some people who want to earn some money and split the profits with them. That’s it, that’s network marketing.
Even if we take the “higher” levels of Amway, for example Emerald, it’s not based on recruiting per se. It’s again based on volume, except in this case it’s a “reward” for helping 3 people reach Platinum. So you could be an Emerald with just a team of 4 people. So it just depends on the strategy to reach Platinum – one person doing $25000/mth in sales, or 5 people doing $5000 in sales or 10 doing $2500/mth in sales or 100 doing $250/mth? In reality a Platinum business is actually about 10 people generating $2500/mth in sales, it’s just that some of those sales are generated by people who join in order to buy at wholesale price.
Strategies can and do change with changes in the marketplace and between different groups working with the concept. But no matter what the strategy, the goal is sales volume, ’cause that’s where the money is.
Could we “run out of people”? Sure. But if you were selling ipods you could run out of people too – everyone could buy one! Who would you sell to next? Similarly, if everyone sold ipods, who would you sell to? Same with what we do. So, I was wrong to say “everyone” can be a platinum – they can’t, just like everyone couldn’t be an ipod sales person and make money. But given the reality that by far the majority of people will not be interested in the business opportunity, there’s plenty of customers available for those that are – so all of *them* could be platinum! Which is what I meant! As for the “highest levels” – well, until recently the absolute “highest level” in Amway was one called Crown Ambassador – how many people are *necessary* to be qualified Crown Ambassador? 20 – you’ve helped 20 others become platinum.
I like to say “this business isn’t for everyone, it’s for anyone”. If everyone decided to join, yup we might have a problem! But if everyone decided to become an ipod dealer, same problem would arise! It’s really no different to other businesses.
MsSkyBluez, you highlight the weakness of this approach, that pretty much anyone can join! Some will treat it professionally with exactly the kind of approach you suggest. Others will do it less professionally, and give our industry a bad name. Doesn’t matter if you’re talking Amway, Noni, or whatever, there’s a lot of idiots
[...] this blogger, like me, does not like Multi Level Marketing too much and he tells you how to spot a fake hustle coming from those MLM agents. I take most of his pointers to heart for I too have been exposed to [...]
IBO, thanks for that great explanation! I think it gives real insight and could very well help those who may be on the fence or need more clarification. I will be very interested in your opinion when Part II of this mini-series is posted!
ibofightback is being misleading. yes, you can make 7500 without recruiting and go platinum. How many people have done it? I bet a small fraction of 1% of all platinums have ever gone platinum this way.