Truth and Lies of Network Marketing (Part 3)

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By Andy Uyboco

Freethinking Me

Thursday, September 18, 2014


I BEGAN this series by explaining what network marketing or multi-level marketing (MLM) was, followed by a discussion on how unscrupulous groups or individuals used the MLM concept to perpetuate illegal schemes. Today I want to deal with questionable, unethical, and unsavory practices of network marketing distributors. I have committed some of these in the past and I regret not having the maturity, foresight or discipline to refrain from them.

During that time, I was impressionable, idealistic and naive (in terms of business). Some MLMs create a clannish, cultish culture where you were expected not to question too much the practices of your uplines, but rather, to follow them. After all, they were successful, weren't they? We would try to copy our uplines, the way they talked, the expressions they used (e.g. "Power!", "Grabe!"), the way they dressed and the way they behaved. We were encouraged to do this because we were supposed to duplicates of our uplines and in turn create duplicates of ourselves.
"Don't think too much. Just follow your upline," was our mantra.

In some ways, it was beneficial. Former janitors, security guards or maids would get up on stage and explain the products and marketing plans, and even crack jokes – none of which were original but were simply copied from their uplines or other speakers. It was inspiring to see people like them gain tremendous self-confidence and self-esteem.

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On the other hand, when we saw or heard questionable advice, the "follow your upline" mantra made it difficult to object to those. After all, we didn't want to be seen as troublemakers or dissidents.

Dishonesty

Many questionable practices of distributors stem from dishonesty. There is the "kidnap" method of inviting people to business orientation seminars. This involves calling people you normally don't call, or haven't called for a long time, telling them you want to catch up or meet for coffee (or something to that effect). When that meeting takes place, you would either be waiting with your upline or try to persuade them to join a seminar, or present the business outright.

This seems like a harmless little lie but in truth, it already creates a small crack in your integrity. In hindsight, I now see that it was not the best way to start a business relationship.

Omission of truth is another form of dishonesty. I remember, when I presented with the marketing plan, that there were all these rosy promises of getting overriding commissions from my downlines.

When I had actually joined and read the distributor manual, I found out that there was a monthly sales requirement I had to meet in order to earn my overrides. That was not explained from the start and it was a huge letdown for me. But I was already in at that time, and so had to make the best of it. Some MLMers still do this -- presenting you all the good stuff up front but not letting you read the fine print until it's too late.

Exaggeration

MLMers are fond of exaggeration. They promise you a 6-figure income in the span of a few months, your dream house or car, vacations, and so on. Some would even promise "no selling" which is a blatant lie -- at the very least, you would have to sell the idea, so be wary of this. It is true though that there are many successful MLMers who can show you large paychecks, but you have to ask -- how much did they have to spend in order to earn those paychecks? Remember what Robert Kiyosaki says, "It's not how much money you make that matters, but how much you keep, and how long that money works for you."

Product Loading or Buying the Position

This is a very dirty trick where your upline persuades you to advance in your position by buying the product requirement needed for that position, or in the case of binary systems, to buy 3-heads, 7-heads, etc. This will require you to put up a lot of cash up front (in the hundreds of thousands or even millions) for the promise of a huge return. That return almost never comes and the only thing huge here is the commission your upline will receive at your expense.

Remember that the basic MLM concept is for a small cash outlay, you get the chance to sell some products and build an organization of people who will do the same thing. Over time, you will be earning small commissions and overrides from each of those people under you, and if you have a large group, then those small amounts add up into a huge amount. It makes no sense pouring in a lot of cash when you still don't have a single person in your organization.

Conclusion

Looking back, my primary mistake was not using enough of my head when I did MLM. I was driven by my emotions and desires -- not that those are bad things, but very often they need to be tempered by reason and rationality. Yes, we read of people who threw caution to the winds, followed their dreams and became deliriously successful -- but those people are few, that's why they are celebrities.

To balance this, try doing some research as well into those people who followed their dreams, threw caution to the winds, and ended up worse than they were before. There are a lot of those as well, more than those who became successful, but they don't get their stories written, they don't have books or movies about them. That's why we don't hear about them.

It is true that there will be a select few who will go on to become wildly successful in MLM. But that is true in almost any endeavor be it business, sports, entertainment, showbiz, the arts, etc.

For non-MLMers, learn to look at the opportunity you have objectively. Hopefully these pointers I gave will give you a better idea of what to expect and what questions to ask. Don't be taken in by sweet promises of easy money. There is no such thing. Being successful in MLM takes hard work.

Published in the Sun.Star Davao newspaper on September 19, 2014.

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