02 April 2011

Just say no to multi-level marketing



The other day, someone with whom I have a passing business relationship called to tell me about a "business opportunity" he had in mind for me. Warning sign number one; authentic opportunities never refer to themselves as "business opportunies."

Because I'm a courteous man, I listened to the details of this "opportunity" for about ten minutes. What I got was a canned spiel about financial independence and the chance to latch onto the American dream. God and country want me to proper!

As I suspected, the "opportunity" was a multi-level marketing scheme. During the course of this pitch, never once did this passing acquaintance mention the product being sold. Rather, all he talked about was the opportunity for me to make money from the network I'd build. Seriously. To this day I have no idea what's for sale here. But what's for sale is always secondary when it comes to multi-level marketing. The actual thing that's being sold here is a snowball's chance in hell that I'll convince enough people to get into this network to make this worth my time.

When he stopped for a moment to ask me if he could e-mail me a link to a video that would explain the whole system I told him I wasn't interested. He was taken aback by that and he asked me why. I told him that I think multi-level marketing plans rely on on an immoral business model.

He was taken aback even further by that but he opened the door when he mentioned that he'd been introduced to this program by someone at church. Warning sign number two; church isn't for making money.

We ended the phone call on a courteous note and honestly, I don't bear him any ill will. What he was selling just isn't for me. But it has left me wondering, is it for anybody? Really. The only people who make money from these schemes are the ones who dream them up. Is it possible to gain some kind of financial freedom from these schemes? If so, at what price?

Well yesterday he sent me another e-mail and he asked me to expound on why I think that multi-level marketing plans are an immoral business model. Here's what I wrote back to him.

Ordinarily, when a product comes to market, someone sells it as a value proposition. I mean that the person selling the product convinces a perspective buyer that there's value in the product itself. Network marketing ignores the product and instead sells the system for making money by selling the product. The product itself is usually an inferior one but not always. In any case, the product comes second, The System comes first.

Add to that the cloak of secrecy that surrounds these enterprises and who wouldn't be suspicious? In our conversation the other day, never once did you mention the product or describe it in any way. Instead of talking to me about a product and its benefits you wanted to send me a link to a video for me to watch. Before I watched it, I already knew was going to be about a system for making money from selling a forgettable product by foisting it on my friends and loved ones. But more importantly, convincing them to sell it too so that I can start making money from their labor rather than from the direct benefits of of a product that has value in and of itself. People in multi-level marketing programs never make their money from the mark up on a product, rather, they make money from the other people they convince to sell the product.

I find this business model to be distasteful, mostly because it's so secretive and deceitful. Yet, like Amway or Shaklee or any of the rest of them, that deceit is wrapped in a veil of altruism and virtue. Products sold in this manner usually can't compete in an open marketplace, they need a captive audience who's obligated to buy them.

I have no problem at all with someone making money from me when he sells me something I find to be valuable. In fact, I go out of my way to shop in places where I know the salespeople are commissioned and I avoid places where they're not. I want to pay for good products and I want to pay the people who are knowledgeable about them. When I buy a washing machine at Apsco in St. Pete or a pair of shoes a Pelz it's a commercial transaction --a business deal and that's it. They have something I want I have the money to pay for it. There's no veil of secrecy or claimed virtue in the exchange of my cash for their goods. The person selling to me is concentrating on the sale, not convincing me to start selling washing machines or shoes so that he can get a cut of my sales down the road.

And that [name redacted], is how I see it.

Am I wrong? I highly, seriously doubt it, but is there some hidden virtue to multi-level marketing that I'm missing? Is it ever OK to shake down your loved ones to convince them to buy something they'd never buy otherwise?

11 comments:

  1. Great response! Best argument against multi-level marketing that I've ever seen.

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  2. If you can't shake down your friends for money, who can you? In fact, I consider you a friend, and boy do I have a fantastic business opportunity for you, friend.

    Heehee.

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  3. You are far kinder than I would have been! No one has pitched one of these things to me in person (I hope because I'm in academia), but I cringe when I come across references to them online.

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  4. Very professional response. I feel the same and you said it better than I could. (Not surprising.)

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  5. Thanks. I'm glad to know I'm not the only one who's rubbed the wrong way by this stuff.

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  6. "But it has left me wondering, is it for anybody?"

    It's for suckers and people who want to drive pink cars.

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  7. True friends do not pitch their friends multi-level marketing. These are desperate people who have mortgaged their souls for the promise of a buck. My mom was in Amway for 12-15 years before she realized she was never going to make a living at it. She was one of the few that believed she was supposed to sell the product instead of the dream. It was heart-breaking to watch people prey on her, but she got out got a job working for the MN DMV. I guess she finally got the last laugh :-)

    You were a lot lot kinder than would have been. I would have just ignored the second contact, not explained myself. I think perhaps your explanation fell on deaf ears.

    I am going to differ with you on one thing; Church IS for making money. There is no other reason to form a church other than to collect the tithe.. and dues.. and donations.. and....

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  8. Raina: Hah! Exactly.

    Rufus: Happy birthday by the way. With that out of the way I agree with you (obviously), it is heart-breaking to watch good people fall under the thrall of these schemes. My first inclination was to ignore the follow up e-mail but I can't resist an opening sometimes.

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  9. I am so glad you gave that person an opportunity to think about what they are doing beyond the make-a-buck side.
    If people are running MLMs through a church, the minister needs to stamp on it. But my thought is that he heard the word "immoral" and thought he'd better baptise his product on the spot!

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  10. I think he was taken aback by my use of the term "immoral" when it pertains to something other than sexual behavior. I doubt it will make him re-think anything but it sure made me feel better.

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  11. Thanks for posting this, my cousin is in a few of these schemes and is relentless in trying to get me and my wife into one with him.

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