About MLM -

Alright, now I would like to discuss about Multi-Level Marketing (MLM). If you read my other blog regarding MLM vs Affiliate Marketing, I may sound a bit bias base on my experience. However, there are many people out there who find success (monetary anyway) in MLM.

Well, not many people heard of MLM outside of North America I believe because that is where most of the big international companies originated from such as Amway, Nuskin and Herbalife. I got my first encounter with MLM when I was still struggling college student trying to find a paid part-time job (I done many different jobs in the past, Food and Beverage, Construction, Health care and Agriculture).  I chanced upon a ads (base on how I remember) written "Health and Wellness job, need multilingual" on a gumtree ads.

Thought that it might be a suitable job for me (ya, I speak 4 languages), I decided to make a phone call to the company. Back then, I have no idea what is Herbalife and MLM (being an ignorant 24 years old). I received an answer and was told to come down the next day in a very friendly and welcoming tone.

I came down the next day, got greeted by Herbalife staff and it has a very welcoming atsmosphere (job interview always make me very nervous). We have a seminar to discuss Herbalife products and how great was it. We had a shake party to try out Herbalife nutritional drinks (well, I do admit that it taste really good for a protein supplement, I always have to pinch my nose drinking GNC stuff). We had a lot of chat, teaching us about Herbalife success story by being a Herbalife distributor and "successful" people were showing off their nice clothing, cars and real estate. Many people were hooked to the get rich quick story, I was kinda in Wonderland (hahaha!)

However, here come the bad part, turn out that I have to pay a fee (50 AUD i think) to become a Herbalife distributor ! I was a struggling student back then and there is no way I can come up with that money (Every cents count to me as I have to pay rents, travel etc). So I told them, I have to decline temporarily until I can find a real job to support that "business" dream (ya, right). They do allow me to come to the seminar anyway, I was kinda confuse about the whole money making scheme by hosting a shake party with friends (impossible, I just came to Sydney, there is no way I have friends in such a short period of time), inviting friends into the membership etc. 

From my traditional business sense, customers love to shop and buy but do not like to be sold to. Anyway, I just thought if I was to invite other people into my business, wouldn't I be creating my own competitor. Anyway, I have to sadly decline and I know that I could not afford certain luxury such as protein shake and gym membership. So I have to walk away on this one.

Now I will explain the whole MLM scheme, there are a few terms called "upline" and "downline". Many MLM distributors do not really sell their products to other customers and even if they do, their customers are often their own social circle of friends and family members. So what most actually do is that they recruited people into their MLM programme and use them as downline.

So whenever a downline purchased a product, the commission will go to the upline who recruited them. The downline was expected to sell the product but many could never be able to and could only sell the product to only their own circle of friends and family. These friends and family are expected to become a member of the MLM company (if they are introduced to Amway or Herbalife product, they are expected to be the respective member of those company). They will gain all sort of benefit such as purchasing products at a distributor rather than at consumer's price.

Once they joined the company as a "distributor", many people have pitched various direct sales products to their friends, family, neighbor, employees, employers, colleague and teachers (much to their annoyance!). I remember a story regarding a psychologist trying to pitch his sale and try to recruit his patients to his MLM scheme while at work ! He got his license suspended from practice for a period of 3 months.

Even though I am a member of Amway and have a few downlines (Well, I did not really actively seek them out and pitch my sale to them, I just asked if they want to be a member of Amway and asked them if they want to use those products at their own convenience. The other downlines were recruited by my friend in Sydney.) and have used Amway products a few times, I will never go around and pitch them to friends and family at the expense of souring my relationship with them. I can find very few flaws and never doubt the quality of the Amway products but I do question the inflated cost of certain Amway products.

Successful entrepreneurship is never easy and it doesn’t need to rely on the giving nature of your friends to succeed. Remember your friends are not a cash cow to be exploited to your own get rich scheme benefit. 

Overall, the business model of MLM seems to prey on human's sense of guilt, pity and obligation. I believe many of you get very annoyed by chuggers (charity muggers or fundraiser), if you are doing MLM, please do not do the same thing to your friends.