Multi-level-marketing and its Pitfalls

Multi-level-marketing and its Pitfalls
Multi-level Marketing. Some view it as a godsend, others a scam. I personally feel bad for the former group, as there are an overwhelming amount of testimonies and data to argue that multilevel marketing (called MLM from here on out)  is a scam, and a very bad one at that. 
MLMs are, according to the Better Business Bureau, “…a system of retailing in which consumer products are sold by independent salespeople…”. Now, that doesn’t sound bad, does it? The BBB goes on to add that compensation is based on the ability to sell a given product to the consumer, and that the salespeople, colloquially called consultants, can also recruit to build their own force. 
Last time I checked, any good and credible job doesn’t push its employees to recruit more. When I go out to the grocery store, I don’t get a job application with my receipt. The pizza delivery place doesn’t harass me at all hours of the day about when I’m going to buy from them.  Most MLMs have in their compensation plan (SeneGence International) (the way one gets paid) a scummy little clause. Any consultant is able to make money off of the sales their recruits, called downlines, make. More recruits, more money. One’s recruits are also encouraged to recruit – keep this iteration going, and one eventually has something akin to a triangle, no… A pyramid. 
Yes, I said it. MLMs are akin to a pyramid scheme. Going back to the BBB that I mentioned earlier, they point out that one of the signs of a pyramid scheme as the ability “…to make thousands or even millions of dollars with little effort.” While MLMs aren’t quite so blatant, they do make the tempting promise that one can make money from home just by posting on social media. To most people, that sounds like a really swell idea. What isn’t mentioned are the upfront costs, which can run up to eight thousand UsD or more! And the harshest truth of them all… ninety-nine percent of ALL MLM recruits lose money according to the Federal Trade commission. Author Jon M Taylor calls them the “epitome of an “unfair or deceptive acts or practice” that the FTC is pledged to protect against.” For many, that’s awful. For some, that kind of capital loss is unreasonable. 
Think about the average single parent – to be able to post on social media and earn a few hundred dollars extra a month would be a blessing. To do that and be able to spend time with children, even better. The catch comes from having to actually sell things. Many MLM products are quite expensive, and out of reach for most families. Can you imagine what it would be like for a family that lives from paycheck to paycheck? And again, when ninety nine percent of all people lose money… it isn’t the best decision to make. 
With raw data like that, I have a hard time seeing how these companies are a good choice over working part time – being successful is akin to winning the lottery. Having personal experience with scummy companies that use this strategy has made me come to an extreme dislike. I write this in hopes that someone will realize how dangerous this style of business is, and refuse to sign up. 
Bibliography
SeneGence International®. Independent Distributor Compensation Plan. SeneGence International®, seneweb.senegence.com/us/career/earning-opportunities/independent-distributor-compensation-plan/.
Better Business Bureau. “Opportunity or Scam? Multi-Level Marketing vs. Pyramid Schemes.” Better Business Bureau, Council of Better Business Bureaus, Inc, 1 Mar. 2018, www.bbb.s-events/consumer-tips/2015/03/opportunity-or-scam-multi-level-marketing-vs.-pyramid-schemes/.org/phoenix/new
Taylor, Jon M. “The Case (for and) against Multi-Level Marketing.” Federal Trade Comission , 1999.
 
law requires that an MLM pay compensation that is based on actual sales to real customers, rather than based on mere wholesale purchases or other payments by its participants.
 

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