The Problem With MLMs

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Home Business The Problem With MLMs
Published on April 23, 2008

My first intro to multi-level marketing was for Amway, about 30 years ago. I was living in Ohio, but went to Philadelphia to visit. I was invited to the presentation. I only remember one thing about the presentation. They either demonstrated or described their drain cleaner product. Then Barbara who invited me, turned to me and said “Aren’t you excited”. I thought it was ludicrous for me to be excited about drain cleaner.

I didn’t write them off altogether, since the benefit part was intriguing. Stories of writing off vacations and travel appealed to me. Not to mention the possibility of a big boost in my finances and financial situation. I even did a light weight query of some of my friends. All the ones who I thought would be good at it had already heard about it and or tried it.

At that time, MLMs were structure as the infamous “pyramid” structure. What that meant was that new people coming in could never make more than those above. Organizations with that structure were deemed illegal. And thus, they went away or were restructured.

One problem with MLMs is that the product costs are inflated to fuel the payouts to the independent marketers. And then there were the personal disasters I heard about. There was the scenario of people with garages full of product inventory that they could not sell. For couples (meaning married people) in the business, when the business failed, the marriages generally failed also.

But, there are people who swear by MLMs or network marketing. Not sure I have the personality for it.

Sandra Noble
NOBLE FINANCES
NOBLE & ASSOCIATES CONSULTING, INC

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