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  • Writer's pictureRodney Alkins

Do Network Marketers tell lies to get your money?

Just imagine, a luxury mansion with panoramic views, vaulted ceilings, lavish furnishings, and an outdoor pool – your home – until you wake up with your face in the mud. That’s multi-level marketing (MLM). They prey on your dreams and naiveté, just waiting like a ticking time bomb until you catch onto the truth.

This style of business has been around since the 1920s. And according to the Direct Selling Association, millions of Americans are involved in direct sales. With those numbers, you would think that people had discovered something worth getting into.

However, here is a very grim result.... A minimum of 50% of MLM representatives drop out in the first year. A minimum of 90% of representatives leave within five years. By year 10, only those at or near the top have not dropped out—which means at least 95% of representatives have dropped out.

As you can see from above people join MLM and other network marketing companies out of a misconception of delusions of grandeur and years later they have spent much of their hard earned money making the 5% who did not drop out very rich.

If you’ve joined an MLM, or know someone who has, chances are, you’ve heard these lies before. Even if you have, it’s good to read about them again, to gain a new perspective on business.

Lie 1: You’re An Entrepreneur Of A Small Business

Nope, you are not! Any entrepreneur knows that starting a business on 10.00 is not reality. This 10.00 you pay is really a subscription to make your sponsor more money not you. The network marketing companies make you feel like you can become an entrepreneur for nothing when the reality is entrepreneurship is very different than the picture they paint.

So what is a more realistic picture? MLM businesses cost as little as $100 to start. In comparison, microbusinesses (a small scale business with around five employees or less) cost about $3000 to start, and franchises between $2000 to $5000. There’s a huge difference.

Building a scalable business costs a lot of money.

It’s one of the reasons MLM businesses fail. If someone is investing just a couple hundred in a business, they don’t feel the need to do as much research into the probability of their success. For example, a person starts a hair products business because it’s popular, not realizing that if they aren’t interested in the niche, they won’t do as well.

Their business will also fail if they’re desperate and have no money. Developing your business takes time, up to 10 to 15 years. This is true whether you want to succeed at an MLM or your own business. It’s not a job.

It’s not a matter of waiting till the end of the month to get a paycheck. A business requires a consistent effort, attention, and skills. If you don’t put in the work, you won’t get paid.

But, when MLMs tell you that you can avoid all those business start-up costs by joining an MLM, that’s a lie.

Lie 2: MLM Is A Part-time Business

It certainly is not. That does not even make sense in a normal job, you simply cannot build a business and be successful if you are only attending to it part time. They make it sound very easy. They say you can do your MLM business on the side by putting in just a few hours every week. However, if you want to get to the top levels, or even make enough to replace your job, you need to be full time. Seven days a week. On top of your regular job. On my goodness this really hurts!

The proof of how people feel about MLM or network marketing is very simple. If you go to any function, such as a wedding or business networking session, and someone asks you, “What do you do?” Just say, “I’m a multi-level marketer.” See how people react to you.

If you want to avoid people at a social function, saying those words is also effective. Just to be clear this is a global reaction.

Lie 3: Their Products Are Cheaper

Lies lies lies! There are not cheaper, There are always more expensive. They mark the prices up because they need the profit margin in order to pay all the distributors on all these levels of the upline. They make it sound as if the premium prices are for better quality products that are scientifically and clinically proven. I will be fair, some of the products and services are actually good but by far and large some of these companies sell you stuff not worth putting in the garbage they never work. They make you think the product or service can work any where and that is certainly not true, There is a concept called economies of size and differently sized markets behave differently for a number of variables due to STEP. Sociological, Technological, Economic , Legal and I will add this last one here, Cultural. You can't tell me that a western product or service can be used without any modification or adaptation in an eastern culture. Certain folly. Yet we see it all the time. Are we this gullible?

Here is a lion...

Lie 4: Anyone Can Do Multi-Level Marketing

The fourth lie is they make it sound like anyone can do it. The truth is, people who are driven and outgoing will find success more quickly than introverted people. Let us be honest, some of us expect to be successful just be advertising our link sitting safely behind our computer screen. That may work for some novel products and services that are literally in demand by the market, but no this does not usually happen in MLM. You will need to get out there and host people and network and social, hold MLM parties and such like. So clearly not anyone and everyone can do MLM or Network Marketing. You are also seeing from all the back office work you will need to do, you will need to have money. Which goes back to my earlier point of MLM not needing much money. Don't believe the hype.

Lie 5: You Can Make Good Money

Statistics have proven that most people don’t make enough money in MLM to be able to quit their day job.

On average, distributors spend over $25,000 and earn $2500 a year. This number includes the conferences, the sign up kit, buying a suit if you don’t have one, driving to places, the products, the marketing, and the telephone bill. This doesn’t include the price of spending time away from your family.

Think about it. You spend $25,000 and make $2500. How is that a good investment? You’re better off if you just stay home and do nothing. Then you would have made nothing and spent nothing. At least you’re breaking even.

In his study of 400 MLM companies, Jon Taylor found that 99.71% of participants lost money in MLM. Here’s another statistic. Amway, considered one of the grandfathers of MLM, makes around 9 billion a year and has been around for 60 years and counting. But 48% of its distributors, or representatives, make an average of $200 dollars a month.

Thanks to DanLok. I could come up with more lies about MLM but I have to go to my 9-5 and make an income. I hope these humble opinions give you insight so that you don't blindly waste your hard earned money for years to come chasing a flying pig.

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