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?