SUBMITTED: Saturday, March 01, 2003
POSTED: Sunday, March 02, 2003
They are told that they are self employed, and their self-employment extends so far as to cover the parent company from liability, but not so far as to grant the agent actual autonomy. An MLM man is no different from a car salesman, who sells a company's product and is paid only in commission. Each may be responsible for earning his own money, but the product supplier controls their behavior, and as such they are not self employed.
Neel raises a good point, though, and regardless of whether or not an MLM job is in fact a business, you need to treat it as such if you want to be successful at it. Here's a list of a few major problems with MLMs:
(Please note that these comments pertain to MLMs in general. I have had no experiences with SFI and have no knowledge of its practices.)
1) MLMs market themselves to potential recruits as though they are offering a regular job. Look at any newspaper ad recruiting for MLMs. What do they say? They say things like "Rapidly expanding company needs to fill 15 production positions, 450$ a week to start, no experience necessary." This is, verbatim, an ad that I was once naive enough to fall for. The "production position" was selling 2500$ vacuum cleaners, and the 450$ a week to start, which didn't actually include the first week, was only attainable if you made 15 presentations, which was impossible because there weren't that many people to make these presentations to. This "job" translated into three weeks of wasted time and absolutely no money, not only for me, but for several other people who probably could afford to waste this much time less than I could. Sound familiar to anyone?
2) MLMs are deceptive to their new recruits as to their potential incomes. If you were to ask a group of new recruits in any MLM how much money they planned on making, and then compared the results to how much money the average recruit in their company actually makes, you would find a huge discrepancy. Regardless of whether or not an upline tells the recruits that they will have to work hard to make money, they still make six figure incomes seem very attainable, often by fraudulent means such as grossly exaggerating their own incomes. The truth of the matter is that people who lose money on MLMs outnumber the winners by a staggering 99 to 1 ratio (from "Where's the Greatest Harm," 1998, by Jon Taylor, Consumer Awareness Institute).
3) MLMs do not pay people for training periods, even if the recruit makes sales. The rationale behind this is that colleges don't pay you to go there, and all you do at college is learn how to do a job, so why should we pay you for learning how to make money? The fallacy of this logic is that colleges do not "train" people, they "educate" people. Training is learning the motions of a particular job, and any reputable employer will pay his new employees for their training period, because he expects the new employee will be successful. The reason MLMs don't pay trainess is that they recognize that only one out of every hundred or so will be successful, which brings me to my next point...
4) MLMs hire indiscriminately. If you read through reports on here about different MLMs you will find that the only way an MLM will turn down your employment is if you ask too many questions. This is the reason so many people fail, MLMs don't care if you have any kind of experience or natural ability, they focus on bringing in masses of people, many of whom end up facing severe financial hardship because of their involvement.
5) One reason for bringing so many people in, when so few will succeed, is that virtually all MLMs require new employees to make practice sales pitches on friends and relatives, knowing that a few sales will be made on symapthy, and a few more due to the trusting relationship. These acquaintance sales made by trainees represent a huge portion of the sales made in most MLMs, but usually the trainee is not compensated for them.
6) MLMs seek to exploit, and end up harming, personal relationships. The focus on selling to(and recruting of) friends and relatives makes social interactions awkward, and when people bring their MLM business into their personal relationships, they often find themselves avoided and lonely.
The list goes on, but the time to write it (and probably the patience of the editor) does not. Just one last note: it is a common MLM tactic to make people think that the people who have failed did so because they didn't put the work into it. This is not true. People drop out of MLMs for several reasons, of course some of them are just too lazy to do it, but more often it's because they see the scam involved, or they are rightfully intimidated by the idea of doing a job they are completely unqualified for.