Promises of MLM - you laugh or cry

All MLM companies promised their agents (they called distributors business partners, independent business owner, members etc):-
1) Own boss
2) Financial Freedom
3) Passive Income
4) Earn big money
5) Unique quality products/services.

Would you laugh now or cry later?

1) Are you really your own boss? Look at this business objectively and then tell me if your are really your own boss. You can decide when your want to work, how many hours you want to work, how much you want to earn, who you want to sell or attempt to sell the products to, how many people you want to recruit to boost your sales. Yes, you can decide. Yes, you have the personal freedom. But are you really the boss or the owner of the business? The answer lies in your mind.

This is a perception that varies from person to person.

Where is your earning from the business coming from? It is not from your sales collection. You earn very little retail profit (profit from selling the products to your customers). The bulk of your earning is your commission. And this commission is paid to you by the MLM company either once or twice a month. So, your earning is totally dependent on the MLM company's ability to pay you. Who is the boss?

So do you still believe you are your own boss doing MLM business? This is your perception.

2) Do you have the total financial freedom? Firstly, your monthly commission is controlled by the MLM company. If you breached any of their terms and condition, the company can withhold your commission. In the worst scenario, your membership or distributorship can be terminated. Some MLM companies are very accommodating, but not other less ethical ones.

Some less ethical MLM companies go to the extend of changing the commission scheme (they called it Marketing Plan)frequently, when they found some pioneer distributors are not working hard enough to boost the company's sales.

Even in the most ethical MLM company, if you slow down or stop doing the business your earning will not continue to flow in indefinetely. The minute you stop doing the business, your earning disappear. There is no free lunch.

MLM company is the master that pays your earning. So, tell me where is the financial freedom?

3) Passive income is another myth. Who on earth would pay you if you are not contributing? The commission scheme (marketing plan) sets conditions to earn the so-called royalty income. This so-called royalty income is from a percentage of the prevailing month's sales. If the sales for the month is ZERO, everybody earns nothing. Have you heard of Shaklee and E-Excel direct sellers crying during the months when the sales were suspended due to licencing problem and shareholders problems?

Under normal operating condition, direct sellers earn this royalty income, but the moment your sale and recuitment (that is sponsoring new members or distributors) is zero for a few consecutive months (usually 3 months) your earning will be ZERO.

Tell me which MLM compoany can pay you passive income without your continueous contribution? I would like to join if there is one.

4) You can earn "big" money. Yes. You can, Just like any other business you can earn "big" money. The big different is that direct seller publishes their earning to attract more potential recruits. The conventional businessman do not announce his/her earning.

Where is the money coming from? Is it so easy to earn "big" money from MLM? The MLM companies pay a portion of their monthly sales to direct seller in the form of commission. There is no special funds or reserve to pay royalty. If the sales for the month is down, the commission(royalty) income is down. If the sales for the month is ZERO, the commission will be ZERO. It is as simple as that. There is no special fund to pay direct seller continueously.

5) Unique quality and superior products is the trade mark of all direct sellers. How many MLM companies have their own manufacturing facility? Very few. These few MLM players do produced superior products. So, how to differentiate the few from the thousands.

There are thousands of MLM companies but only a handful of them owned factories. So, where do they source their produts from? The answer is OEM (original equipment manufacturer), contract manufacturing and private labelling. What is so unique and superior about their products. It is the perception created by the direct sellers and the MLM companies. You may be paying high end prices for generic products. Or worst scenario, buying inferior products at superior prices.

Be wise with your money and your so called "long lost friends". Not all MLM companies are bad, but don't get yourselves scammed by them.

Back to you for more posting later.