3 Reasons Why I Hate MLM Companies
Multi-Level Marketing has been a successful business model to some companies. Pay people to recruit more people to recruit more people to sell a product so that this scheme forms a pyramid of people. Seems genius, especially if you have a great product right? Unfortunately, that isn’t the case more times than not. Many of these MLM companies absolutely prioritize the product 2nd,3rd, even 4th on the list of priorities. This is why people have grown extremely suspicious of these companies. I have numerous experiences with these companies and have seen the bad stuff up close.
Here are the 3 reasons why I hate MLM Companies.
1. Totally Unscrupulous
Back in the day I joined a Vector Knives team. I was hyped. When our team leader ran down the pay scale (which looked good but was actually convoluted) I was excited. He told us what we need to wear and that we need to buy a set of knives for our demos.
I bought the knives and went door to door in well off neighborhoods to try and sell these knives. I sold a few. But the checks looked funny. I realized there were asterisks on the pay scale that were outs so they didn’t have to pay people. While the knives themselves were good quality ( 1 piece of steel, handle with rivets) the company they contracted to sell the knives, was not.
I ended up leaving and later realizing that this MLM company made most of its money by getting the recruits to buy the knives for the demos. Horrible!
Had an experience with the rich dad seminars as well. I’d read the book, bought one of the others. And saw an ad for a Real Estate seminar in the area. It was free so I thought why not. I went and there was a main speaker and guest speaker. I thought it was amazing. They were riveting speakers. We were given some free things, a book, dvd, planner, and a few other items. We were also offered (upsold) an advanced class for $500. I took the bait and signed up.
A month or so later, I attended the $500 seminar. The thought was I was going to get some really actionable information. We got some stories, some hypotheticals of how much money was possible using different methods of real estate investing. It sounded great. Then the hook came. Join our specialty real estate classes, they’re $7,999 each, and you take all of them for something like $55,000. They then pressured us into maxing out multiple credit cards to pay for the classes.
That’s when I saw what was up. It was totally absurd. When I got home, I did my Googles on the seminar “teacher” and he was simply a salesman, not a real estate mogul as purported. I dodged a bullet, but sadly I saw others line up to buy the classes. Many middle-aged, retirees, or just desperate people in general trying to make something happen.
Wake Up Now
Wake up now was a company that sold all kinds of health products using MLM. I remember I got cool with someone while I was in college. After some months he texted me about a way to make money. He wouldn’t tell me what it was, just wanted to meet at some hotel convention room. I asked him what it was and he was reluctant. Once he told me, I deleted his number.
This was another one from a long time ago. A friend tried to recruit me into this as well. He never made any money though. Another one where spending money to become a salesperson is how they make their money.
2. Big On Sales, Small On Products
MLM Companies are often contracted to move a product for someone else (in the case of vector knives) or licensed to use someone’s brand (Rich Dad, Trump University) to push their own products. In both cases, the MLM company has no real loyalty to the brand or product other than what they can profit on.
So what you get is a lack of product quality because sales are first, the product is 2nd. These companies slap together subpar products and then allow salespeople and marketers do the rest, from top to bottom.
Not the greatest model. Mind you that may work only if there is an actual product. There are also MLM scams out there under the guise of MLM companies.
3. Damage To Reputation
If you have a good reputation, your business has a good reputation, and you contract marketing out to an MLM company, you might damage or even destroy your reputation. You might have a great product but all kinds of elements are pushing the product. Some may lie or otherwise misrepresent the spirit of the company and the product(s) they sell.
Eventually, all of that comes back and ultimately could spell the end of the business. Who wants to be associated with that?
Why I love Affiliate Marketing
Affiliate marketing is a totally different animal. Promoting products that you use or have used in exchange for a commission is an ethical way to market. On this site, I only share links with products that I use. I’ll only use them if they work, so If I’m promoting it, it will work for you too.
This method of marketing is usually a company itself, or a third party paying directly you to promote their product. No crazy convoluted math schemes or ifs, and’s, or buts. A flat commission rate and then a payment schedule, that’s it.
I will be doing more product reviews on here like the TRX GO Review. This is one of the good products I use all the time. So are the Indian Clubs. However, I will also share some of the trash products I’ve bought as well and review those. But see that way I can share with you the products that are good, you can try them, and then you can also refer others to it as well.
Some companies rather do this than to run ads. It’s a word of mouth marketing strategy. Often times the products are excellent and sell themselves. So you just have to show other people they exist. Nothing unscrupulous or dishonest about it. The companies just pay you to show others they exist and are quality products.
You may have a different experience or feel differently.