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What is MLM & How to Identify One

What is MLM & How to Identify One

Surely sometime in your life you have heard of Herbalife, Usana, Mary Kay, or Monat or even Amway.


If not them, then you must have been approached by smart looking, smooth talking, very articulate people who would tell you that you can "become your own boss", "work from home", "At your own convenience" and they can even help you "create a secondary source of income".


These businesses that offer you attractive proposals that include "working from home, being your own boss, choosing your work hours, being an entrepreneur and ready to succeed." These are multilevel companies or known in English as MLM -Multi Level Marketing-.



What makes a business an MLM?


This business is made up of a network of independent salespeople who are usually called representatives or distributors. They make money from the sale of the products that the company offers: Mary Kay offers makeup, Usana and Herbalife offer vitamins and nutritional supplements, Monat offers vegan beauty products, etc.


But these salespeople also make a profit for every salesperson they successfully invite into business. If you, María, are a Monat distributor, you can earn money by selling products to clients, or you can also earn from each sale made by the salespeople you brought to the business on board.


Technically, there are two ways to make money in these MLM businesses:


·     Direct sales:


Classic sale of a product to the potential customer. Either in person or online.

It's what many of us have received or seen, the Avon books being passed around the office and the person selling the products.


·     Creation of dealer networks:


This method is about inviting a person to become part of the MLM business. And, if she joins, it means that she becomes part of your network of distributors and for each sale she makes or the person she brings on board, you will get a percentage.



Studies conducted by the Direct Selling Association (DSA, or Direct Selling Association) showed that people who were engaged in direct sales in an MLM earned an average of $ 5,702 in annual sales in 2018. There are cases where the seller earned $ 100,000 annually, but this is a minority of cases.


Those who do it is because they not only dedicate themselves to direct sales, but also dedicate time to create a network of distributors that generates commissions - do you understand why it is called a “multilevel” business? -.


Finally, a 2018 study from the AARP Foundation found that 47% of older adults who participated in MLM reported lost money, while another 27% reported zero earnings. The rest of the percentage said that they had already had experience in this type of business.



Too good to be true?


Could be. MLMs sound like a very attractive proposition. Whether you are looking for work, or when you want to have an extra income. But you must be careful and know the business very well before entering.



Signs of a bad deal


If an MLM company - or any other company - shows any of these points, it is best to politely decline and continue looking for a conventional job or a better offer :


·        Exaggerate your profit potential : keep your feet on the ground and don't be swayed by a "huge and promised" profit from the business. MLM is not easy and it takes time to see real gains - if they ever come.


·        Push for you to sign a contract quickly: never sign anything without researching the business and reading other people's experiences.


·        It requires purchases or training with high initial costs : some of these businesses ask you for an initial investment either to receive courses or buy products. Remember that studies prove that more than 50% of adults who venture into these businesses see no profit and even lose money. Don't invest money that you could use for basic necessities, in a business with impossible promises.


·        It does not allow the return of unused inventory: This refers to when you buy product to sell, but if you did not manage to place it, the company does not allow you to exchange it with other products that are more requested by your customers. This system is, in general, to force you to buy more product and go into debt with them.


·        Suggest that you go into debt to buy inventory: Companies like Mary Kay offer you a credit card to buy product and give you an amount of sales that you must make; If you do not reach that number you still have to buy a product and since you did not have real profits, it is necessary to use the credit card again. The debt with the business rises and the profits do not come.


·        It has a bad rating with the Better Business Bureau (in English)


Listen, we get it. A lot of us are looking for jobs. Especially since the pandemic, it has been difficult to find one even more.


Conclusion


"Not all that glitters is gold" is a phrase we hear from our grandparents, but in the case of multilevel businesses it takes another turn.


The proposals of distributors trying to form their network of salespeople sound attractive, yes, but do not get carried away by the excitement of "being your own boss" and "working from home to take care of your children". Don't forget to do your research before signing anything, to ask direct questions of the dealer you interviewed and to remember that if it sounds too good to be true, it might not be.


There are other businesses that involve being your own boss, choosing your hours, and working from home like Fiverr or opening an Etsy shop or even actually starting your own business.


Our suggestion, don't fall for such offers please. And if someone approaches you on homeis with such a proposition, report them to Varsha please.


Have a great day.

Good Luck.

14 Saved
53 Comments
Ainel · Sep 16, 20:56
Thanks for the caution..!
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Mihir· Sep 16, 22:01
These MLM guys are a real headache
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1 Like
Hisoka· Sep 17, 18:30
Yes, WFG is one of them targeting all south asians and it is spreading like a virus.
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5 Likes
rajni· Sep 18, 00:03

Hisoka if you dont like then dont adopt it but dont spread negativity..no one force anyone here to join wfg

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3 Likes
Gracy· Sep 19, 22:03
😂😂😂
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Sharan· Oct 14, 15:14

Hisoka that is mga not mlm

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Berty Neeman· Sep 16, 22:06
I agree but can any one tell any job that gives you income security and any job that you can make any amount of money if you wish. MLM is the best way to create passive income
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7 Likes
Jonathan· Sep 16, 22:44
Imagine working till 65 and then retiring & hoping to do things and passion you loved when you were 45 years... you just can’t because you lost traded your time for the dollars however if there is a legit way if you can make additional income there is nothing wrong...
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7 Likes
Naeem· Sep 16, 23:33
Has anyone delt with WFG (World financial group)?
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Zeeshan· Sep 17, 00:47
Yes I am
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Naeem· Sep 17, 01:25

Zeeshan how was your experience?

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Zeeshan· Sep 17, 03:15

Naeem working as a Marketing Director for last 2 years and I am big fan of this company and its business model. If someone showing you the path just listen and follow him. If anything I can help you so feel free to contact me

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1 Like
rajni· Sep 17, 15:09
yes
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Naeem· Sep 17, 15:25

Zeeshan can you please send me your personal information in the private msg?

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Zeeshan· Sep 17, 17:03

Naeem brother I messaged you my number

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1 Like
Hisoka· Sep 17, 18:27
The worst, pyramid scheme stay away from it. Me and couple of my friends were all ripped off by this scam!
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2 Likes
Sharan· Oct 14, 15:18

Hisoka did you know pyrami scheme illegal in Canada?

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Shalinder · Sep 17, 00:40
Wow! Thanks a lot for such valuable information. I really appreciate your efforts for gathering and sharing information. As peole say there is no smoke without a fire so there must be something positive about it. If you can explain why Billionaire Warren Buffet, after purchasing a network marketing company, called it the best investment he'd ever made ? Robert Kiyosaki says it didn’t take him long to realize that network marketing isn’t about making money. However, it is about helping people to help other people make money so they can become financially free. Please explain
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8 Likes
Bhargav· Dec 15, 22:01
It’s true sir
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Srunaj· Sep 17, 01:49
Everything you deal with is a transaction, you sell your self for work, you sell services, you sell products, so is network marketing. But the beauty with MLM is the training part, where you master the skill of selling. People who have no clue where they are going or what they are doing in life needs a mentor and that's what a network marketing offers, a well groomed person as a mentor, you don't make money but you find ways to sell yourself high,
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4 Likes
Jagat· Sep 17, 14:33
Wow. the comments section is filled by pro MLM people. sorry, Network Marketing people. Earning passive income. haha. Warren Buffet buys a network marketing company because it makes him richer. Period. Kiyosaki has been keeping a low profile since his company was sued for $24 million dollars. His company filed for bankruptcy in 2012. His famous book has been in my forums deemed irresponsible for creating amoral sales people. Basically, any company that says that the "income potential" is greater if they recruit more people into the company is a pyramid scheme. Ask yourself a question before: "Are you selling the company or its product or services?" Short advice. Read up on any company that comes to you with such an offer. Go To Reddit. Go to Quora. Read review. Don't get lured into the mumbo jumbo of passive income and be your own boss. There's quick money in Stock Markets. maybe invest your time in learning that.
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5 Likes
Hisoka· Sep 17, 18:28
My advice is stay away from WFG!!
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2 Likes
Naeem· Sep 17, 21:41
May I know why please?
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rajni· Sep 18, 00:06
dont need your advice.. if u are not capable to do this then dont tell others to stop progressing in their life..
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1 Like
Hisoka· Sep 18, 00:55

rajni hahahaha!! You are probably one of the WFG suckers lol. Don't you feel bad for ripping off ppl??

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2 Likes
Gracy· Sep 19, 22:04

rajni 😂😂😂😂

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rajni· Sep 19, 22:09

Gracy thanks.. i dont mind unless im progressing in my life.. i dont see people who laughed on anyone... its more encouraging to me to go into it..

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Gracy· Sep 19, 23:52

rajni no no I was laughing on a comment saying they are an headache..

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rajni· Sep 20, 02:38

Gracy may be its headache for him but for so msny people its blessings..its way of looking for everyone.. u r a RN u tell me financial planning is how much important in life if something happened??

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Gracy· Sep 20, 05:56

rajni It’s very important 💯

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rajni· Sep 20, 10:31

Gracy this is the answer.. this is what we do for families coz we want no family left behind.. if someone loose any life in their family no one brings it back but we can secure future financially.. thanks

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Hisoka· Sep 20, 15:43
WFG = World Fraudulent Group " No Families Left Behind to be cheated" Do your own research its a scam. Omg!! Wake up ppl!! Abhi bhi waqt hai sudhar jao aur paap ka praischit karlo!!
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rajni· Sep 20, 20:50

Hisoka tumhare me to itni himat nahi apni shakal dikha sake.. profile pic bhi ni lagayi.. if it is scam go complaint to FSCO.. go man go... i just even dont want to see your messages

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Hisoka· Sep 20, 22:45

rajni kya behenji, mein karwachoth ka chand thodi na hu aapni shakal aapko dekhau! 🤣🤣 mein ni kiya hai complain ab toh mein dusro ko bacha raha hu es scam se. WFG ne na jaane kitne masumo k paise khaye hai only God. Rab aapko jaldi akal de 🙏

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rajni· Sep 20, 23:02

Hisoka i dont even want to say anything to you now.. you are really very idiot personality..

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Hisoka· Sep 20, 23:23

rajni 🤣🤣🤣🤣🤣 thank you for your lovely compliment. Ab bas aap ko meri dua hai ki aap jald se jald SMD ban jau WFG ka aur Rajeev Bhatia se bhi aage nikal jai 🙏

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Adi· Sep 18, 01:20
If you fail in your exams doesn't mean the teacher is bad or misleading you. In the same way , if you were not having the good experience with WORLD FINANCIAL GROUP doesn't mean that this company is bad. Respect every business because it may not seem good to you but it may be building someone's dream too. Stop creating negativity and hatred and live your life with positivity. Lastly, i wish you a heathly life . Hisaka Akoi
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Hisoka· Sep 18, 01:41
Have you used all your friends and family memebers yet for your own gain? WFG focuses on recruits, they'll tell you time and again you can work part time.They hassle you day and night with emails and text messages and demand virtual meetings weekly. They have a brain washing routine that will suck most go-getters in like yourself.They prey on your friends and family members and rip them off by selling them insurance products structured in a way to give them big commissions while providing very real long term value to your friends and family. For instance, selling them a whole life policy but structuring it so that there is no cash accumulation value and it eats itself up by age 85, or sooner. Great if you die before age 85. But if you live to be 86, you just wasted all that money on a policy that is terminated for lack of funds and you can’t afford the new payment that is 100x greater than it was. If cheating people especially your friends and family is succeeding in life then I'm sorry my friend you are a total selfish piece of 💩.
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Adi· Sep 18, 01:49

Hisoka never mind . You can say me alot worse than this i won't mind . And for your kind information. I never looked to my friends and family . I am doing this on my own . May god bless you with positivity

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rajni· Sep 18, 21:32

Hisoka first of all wfg is not selling any of there own products.. there is lots of companies who are selling there products.. who are you to tell people sucker.. bcoz of like you guys there is bad image of business..

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Hisoka· Sep 19, 01:58

rajni 🤣🤣🤣🤣🤣 lagta hai mein ne aapke dukhti ragh par haath rakh deya 🤭🤭 I have been to their so called brain washing trainings and all they teach you is to target your friends and families so that YOU can add them to your list of accomplishments and whatever bullshit that 3-3-10 etc is... what a shame!! WFG sucks period!! I will raise my voice against this scam so if you don't like just keep scrolling no nees to lecture me. Cheer!!

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Sudeep· Sep 18, 11:58
Chill guys, there is nothing wrong in making money. No one is cheating anyone here. There are different types of jobs in this world. Some like to be employees and some prefer self employment . No one can force anyone to choose either one. There are many self employment careers like real estate, insurance , car sales etc and each have their own merits. Let everyone co-exist . Even though I’m not with WFG, when a life insurance policy is paid out to a family where a tragedy had happened, no one will criticize the agent who sold them that policy , may it be a relative or friend. This is just my personal opinion. This is a great forum bringing everyone together and let the bonding continue. I didn’t buy the LOTTO max last week as I don’t believe in it but I’m glad that the person who won the Jackpot didn’t think like me....:)
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8 Likes
Sumeet· Sep 19, 02:13
This is what you call a professional. Thanks Sudeep for sharing such nice views and real life scenario
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Sudeep· Sep 19, 02:39
Thank you Sumeet for your kind words, much appreciated.
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Gracy· Sep 19, 22:05
Well said
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1 Like
Sudeep· Sep 19, 23:44
Thank you Gracy.
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Naeem· Sep 20, 05:49
I think the only person who worked there for a year at least can offer a material opinion. Selling services/products to your friends or family members isn't ethically wrong as long you're not cheating. If they don't buying from you then they'll buy From someone else.
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1 Like
Prince · Sep 20, 10:31
Like any other venture one have to give his/her time and do hard work to get successful in Network marketing. This business is not for the people who want success over night and that's why people say negative about this business idea. If any one is consistent and work with system they can be successful.
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2 Likes
Kashish· Sep 21, 19:28
Sounds like pyramid scheme
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Adi· Sep 21, 19:32
Pyramid scheme is illegal in Canada. And government doesn't provide license for illegal actions.
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Hisoka· Sep 21, 22:45

Kashish you are absolutely right!! The new name for pyramid scheme is Multi Level Marketing (MLM), also called pyramid selling, network marketing, and referral marketing, is a marketing strategy for the sale of products or services where the revenue of the MLM company is derived from a non-salaried workforce selling the company's products/services, while the earnings of the participants are derived from a pyramid-shaped or binary compensation commission system.

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Baldev· Oct 07, 03:38
The person who wrote this article need to do more research about understanding the difference between MLM, Distribution & Brokerage. This article is not neutral instead it promotes only one side (negative side) of the things.
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2 Likes
Mahmud· Feb 19, 21:52
MLM is a misuse of the Marketing term. It’s just another form of scam. Stay away from it. People who are in this trap want others into this trap, nothing else.
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