5 MLM Myths
by Michael Sampson
Members of multilevel marketing (MLM) currently are growing by
leaps and bounds. But just as there are multiple members of MLM,
there are as many myths and misconceptions that surround those
who practice multi level marketing.
The following are myths commonly associated with MLM.
First MLM myth: Multi level marketing is a form of pyramid
scheme. The fact is that - it is not. Fist of all the obvious
difference between MLM and a pyramid scheme is that the former
is a legal means to perform business while the latter is
definitely illegal.
The common process in a pyramid scheme is that you usually have
to part with a significant amount of you hard earned money in
exchange for literally nothing. You get no visible services or
goods. What you are supposed to have is a lot of luck and a
chance to double, triple or quadruple the money you put in - if
that is ever possible. But chances are --- and there is a lot of
chance of this happening - the only person or persons that do
get rich are the ones on top of the pyramid.
The idea is that pyramid schemes is a way to transfer funds from
one person to another. But in multilevel marketing, you are
given the opportunity to involve yourself in a system of
business that is legal. There are actual products distributed
among MLM members and networks composed of various clients and
buyers.
Second MLM myth: Multilevel marketing provides better money
making prospects than conventional businesses and business
models. The fact is that that is not the case for all MLM
ventures. There have been instances where only a mere one
percent of MLM investors and distributors actually gained
profit. Meanwhile, those who earn a living via MLM are also
smaller in number. The conclusion that opportunities for success
in a multilevel marketing business is slim is mathematically
sound. This is because the structure of MLM can actually support
a very small number of successful MLM winners.
Basically the system is unstable and the quantity of
distributors in a specific area is unlimited, also there is no
clear or specific market potential evaluation.
Third myth: Multilevel marketing is a Ponzi scheme in disguise
The fact is that - it is not. A Ponzi scheme derived its name
from a man who existed during the 1920's who'se last name was
Ponzi. Charles K Ponzi operated a scheme wherein older investors
earned money literally by sitting down and doing nothing thanks
to the influx of money invested by newer members.
The difference between a Ponzi scheme and a pyramid scheme is
that the Ponzi scheme ollows no clear structure or hierarchy.
Actually, there is only one --- lucky - person who collects
money acquired from new investors. This person then uses the
collected funds to reward, award and give these cash to older
investors who were earlier promised that they will be given the
proceeds originally promised to be given to them.
So the bottomline is: if you are involved in a Ponzi scheme, you
are then merely paying off profits originally promised to
earlier investors. Ponzi schemers make you believe that they
will help you make money when in actuality they are taking your
money and giving it to those investors who earlier put their
money in long before you did. In a Ponzi scheme there is also no
visible goods and services provided or distributed.
Fourth myth: Multilevel marketing is a way of life that gives
you security and fulfilment.
The fact is that --- it does not. In reality no such business
exists that will give anyone a secure and fulfilin way of life.
No business is perfect, there will always be financial ups as
well as financial downs. And multilevel marketing is just as
subject to that. Unfortunately most MLM advertisements and
come-ons involve truly tempting forms of materialism. The
excesses presented by multilevel marketing companies would make
even Fortune 100 companies blush. Most MLM ventures promise
scandalous wealth, personal fulfilment and luxury.
Fifth myth: Multilevel marketing is as easy as one two three.
The fact is that MLM is not for the lazy at heart. There is a
misconception that MLM equals to easy money. Some even think
that all they have to do is establish a few contacts -
preferably those they already know like family and friends - and
from there wait for their checks to arrive in the mail. Most
people who actually get rich from MLM ventures are those that
worked the hardest.
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