Are MLMs a Scam?

And Other Complaints About the MLM Business Model

To answer the question, are MLMs a scam, we need to go back in history.

In the 1950’s people thought Ray Kroc was a scam artist. His idea of creating a new business model called a franchise just did not make any sense. Those who had a chance to invest missed out big time.

MLM has had some shady people working in it. The vast majority of MLM businesses are legitimate business models. Like any business, there will be those who will use this model for unscrupulous gain.

Bad people do not make the business model bad.

Some sites will say that you do not need to sell to be successful in the MLM business.

I disagree. The most successful MLMers that I know have a sales ration of anywhere from 20 to 80 percent of their income. If you cannot make a living off of just selling the product, then you are building a house of cards that will blow down with the first wind.

This is because product has to sell or there is no profit and if no profit, there is no income.

Are MLMs a Scam

The simple answer is no.

The MLM difference is in building a network of sales people. If you try to get friends and family, you will lose all of your friends and family. If on the other hand, you try to only recruit people who are good at or love to sell, then you have a strategy to improve the successfulness of your company.

Notice I didn’t write the odds of your success.

This is because odds have nothing to do with MLM success. The only thing that will make you successful or cause your failure is the amount of work you put into it. The fact that other MLM distributors are successful says the business plan works.

For your business to work, you have to work. So if your going to ask are MLMs a scam, you need to ask if other business models are scams. The answer is obvious.

MLM’s are Pyramid Schemes

First, Pyramids are illegal. If anyone should say this to you, then the first words you need to ask is what do they mean? How is it that they know that MLM’s are pyramid schemes?

Even ask if all MLM’s are pyramids? Then ask if they have ever actually looked at the business model of a MLM. Have they ever looked at the pay out schedule and how it works?

Then ask if they were aware that many Fortune 500 companies use MLM as part of their marketing strategy.

Next explain that in traditional pyramid scheme there is no product. In your business there is a product.

But it is Not Sustainable

The question again, why do you say that? How do you know that? If it was not sustainable, the company will eventually collapse.

This is one of the best 'are MLMs a scam' questions. The people who say this often are just repeating what they have read or heard.

WarningThis being said, a gas rebate company is offering gas cards that enable you to get cheaper gas. The problem is they are hoping that the buyers do not use the coupons. Statistically this is true. However it borders on illegal and I suspect it will be shut down.

They boast $3000 per day possible. Well, if it is too good to be true...

So, are MLMs a scam? No. However some scam artist can take advantage of this business model as they can any other business model.

Are there other complaints not addressed here. Contact me and let me know of others you have heard.

1 of 6 What is MLM? Take a look at what MLM / Network Marketing is and is not.

2 of 6 Marketing Models will give a brief look of how businesses get products to consumers.

3 of 6 Online MLM Business How does this work and why would this be a good business model for you.

4 of 6 Web Site MLM Business

5 of 6 MLM Business Plan

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