Why I Asked Is MLM A Scam?
I was about fifteen years ago when I was first exposed to network marketing or as some call it, multi-level marketing and to be honest I really didn’t understand the whole model. I was only in my early 20′s, just married not to long ago, and had one kid. So it was natural for me to ask quite quickly after I signed up to ask myself and others, Is MLM A Scam?
Truth be told the only reason I joined was because my wife had dragged me to one of those home party meetings. The company was Amway and to be quite frank in those days going to a meeting was like attending a cult meeting. Man were they dedicated to their company and the products. Now don’t get me wrong it wasn’t horrible, but it kinda turned me off to the whole idea and went out of my way to ensure that I never attended another meeting. We bought some product for a bit but really other than that we didn’t do much else.
Fast forward about five years and my wife and I are looking at our military careers and wondering if there was something more to do in order to have more time to spend with our kids. Deployments, shift work, field problems, and other misc trips end to keep me away from them more often then not and we wanted more.
Is MLM A Scam or Pyramid Scheme?
Truth be told I have to admit that when I first got involved in network marketing I did ask the question, is MLM a scam. And during the course of my thousands of phone calls or e-mails to and from prospective prospects I have also had the question posed to me as to whether or not it was a pyramid scheme.
There are several ways for network marketers like yourself to address these particular objections but you need to keep one thing in mind. People that are making these objections (asking the question, Is MLM A Scam is an objection) have either 1) been burned by other network marketers or 2) they are just afraid to take a risk in that they don’t want to fail. Not will say that if you’re prospect has a mind that what you’re offering is a scam and they are trying to get you involved in the conversation resulting in you having to in some way justify how it’s not you need to move on.
It is way easier to prequalify people before you bring them into your team then it is to deal with someone who brings a lot of negativity into your group. Or even worse yet does not do or follow your proven system resulting in a negative experience. These other people who will use a lot more energy bashing you and your company than they actually did in expanding their business. They will have failed because they were not disciplined enough to follow the system. Ultimately you and your company will be the target of their anger with themselves.
Remember that we as network marketers are not salespeople. Sure our companies have products and we also have the business opportunity that our companies provide. But it is our job as network marketers not to sell prospects on or product or business. It is our job as network marketers to provide information to people who already have come to the conclusion that they want to be involved in the network marketing business. It is our job as network marketers to give them that information and allow them to make an informed decision.
When we approach our business in this manner and completely avoid the question is MLM a scam, we now have prospects and members of our team’s that have a understanding of what is involved in running your own business. And we have a group of people who understand that there is a great deal of discipline when it comes to ensuring their own success. Now you as a leader of your team are positioned in a place where you can assist them in their journey rather than having to hold their hand or do the work for them.
Is MLM A Scam? Of course its not a scam but don’t take my word for it. Here is an article published in USA Today on network marketing written by Craig Lapp.
Not long ago, Craig Lapp made his living driving a truck that helped carve Southern California’s soil into new developments. But then housing sales slumped, and in November 2007 Lapp’s construction company let him go.
While he searched for another job, Lapp began working alongside his wife, Lynne, in a business based in their Temecula home, selling nutritional supplements made by the direct-sales company Isagenix. Nearly two years later and with no construction job in sight, Lapp says a one-time sideline has become the couple’s bread and butter.
“It’s paying our mortgage, our car payments … putting food on the table,” says Lapp, 55, who adds that he and his wife are earning a six-figure income. “It was our ‘Plan B’ that turned into our ‘Plan A.’ ”
Direct-sales businesses that rely on home-based representatives to peddle their wares are seeing their sales forces rapidly expand as the nation’s unemployment rate soars to nearly 9% and those who lost jobs and nest eggs look for new ways to make money.
“We’re recession-resistant in the sense that more people come to us during economic hard times for supplemental income or replacement of a lost job,” says Neil Offen, president of the Direct Selling Association, the trade group that represents the largest U.S. direct sales companies.
While 2008 industry figures aren’t yet available, “Anecdotally we’re hearing that recruitment is up and … unfortunately as the unemployment rate rises to 10% or higher, we’ll be picking up more people who need an income-earning opportunity.”
The recession has become a recruiting tool. An Avon (AVP) cosmetics representative declares in TV ads that “I can’t get laid off. It’s my business.” Companies such as Isagenix, a marketer of weight-management and nutritional supplements and snacks, and jewelry maker Silpada Designs are coaching their representatives to spread the word that direct selling can keep you afloat in the faltering economy.
“Right now, our direct-selling opportunity is really the No. 1 product that we have to sell,” says Geralyn Breig, president of Avon North America.
With that in mind, Avon this year launched its most ambitious recruitment campaign and saw its U.S. sales force grow to more than 680,000 through March, its largest ever, Breig says.
The same month, cosmetics company Mary Kay began airing its first TV ad for new representatives. In its first three days, visitors seeking information about becoming “beauty consultants” at MaryKay.com spiked 108%.
Silpada Designs, a Lenexa, Kan.-based company specializing in sterling silver jewelry, says its sales force in the U.S. and Canada was up 11.8% on May 1 from a year earlier. And Chandler, Ariz.-based Isagenix says its sales force was up 30% in March from a year before.
The hope is that larger sales forces will grow revenue, even in an economy that has shrunk sales for many companies.
“Representatives and recruiting are a leading indicator of future sales,” says Jerry Kelly, Silpada’s CEO, who acknowledges sales for his privately owned company were down roughly 10% in the fourth quarter of last year. “We’re optimistic that we’re going to fare fairly well this year as a company in a very difficult climate. … We’re seeing a more determined and focused representative who might be looking to supplement lost income for their family.”
There are roughly 15 million direct sellers in the U.S. — independent contractors who sell goods or services primarily through parties, demonstrations in someone’s home and one-on-one interactions. In 2007, the most recent year available, the sales industry generated $30.8 billion in U.S. sales, according to the Direct Selling Association.
Sellers are recruiting
Avon aired its first infomercial last month, and
Is MLM A Scam?
