Why is Network Marketing/MLM seen as a Scam, and How to Choose the Best MLM Opportunities

Why is it when anyone mentions Multi Level Marketing (MLM) or Network Marketing that people get glazed eyes and start mumbling something about ".... scam...." under their breaths? And why do there always seem to be counter-attack websites listing scams or naming-and-shaming Network Marketing companies (check it out - search for the name of any MLM company + scam and you'll get lots of sites coming up)?

This is going to be an honest attempt to answer these questions, looking at both the positives and negatives, from a Network Marketer who has had a good share of ups and downs in MLM.

Let's quickly define MLM. For the purposes of this article, MLM - multi level marketing - refers to a business structure with lots of levels. The Sales Reps/Distributors recruit other reps beneath them, who in turn recruit more reps under them, who in turn have more reps beneath them... (you get the picture - called a downline). Network Marketing refers to something similar - the building of networks of reps/distributors. Usually the reps are self-employed but part of these networking/multi-level teams, and the beauty of this business model for them is that they not only earn commission from their own sales of the company products, but usually also from a number of levels of reps below them.

Network Marketing / MLM is, in theory, a good business model, for both the main company and for the reps/distributors. The company benefits because they don't have too many actual employees and thus have less costs usually associated with wages and company premises. And it is possible to join an MLM company as a rep and grow residual income, because you're growing your network of reps, who will recruit more reps. As long as most of these people are happy and succcessful doing this, all growing their own little corners, if you like, your income will continue to come in, on an ongoing basis, even when and if you don't sell much product yourself.

But unfortunately both distributors and customers have had their fingers burnt many times from MLM companies, and really, this is why there is such a large anti-MLM movement. Let's look at the reasons:

Many Network Marketing companies distribute novel products in the health sector, and often customers have been duped by reps over-claiming the benefits of the products, or making medical claims (which are usually not allowed, as these companies sell health and beauty products, not registered drugs). The problem is that because reps are not actually employed by the MLM companies, the companies can offer guidelines on what reps should say and do, but have less control over their behaviour and actions.

The other issue is how MLM companies have 'treated' their reps. A lot of these companies recruit their self-employed reps aggressively, with similar messages to potential recruits - usually a fluffy pink version of "you don't have to sell, the products sell themselves, all you do is show or share them with your friends and family, and you'll make a residual income for life". This story is unfortunately an inaccurate picture, aimed at recruiting as many reps as possible, rather than the truth which is:

• Reps are salespeople and will need strong sales skills and business acumen to survive,
• They'll soon run out of friends and family members who'll probably get annoyed being constantly accosted in this way for business,
• They'll possibly end up spending money on company stationery, stock, promotions, and so on, without necessarily bringing in enough to cover their costs or pay the bills, especially in the first year.

But, there are people who do make it in Network Marketing. Even those who make it really big. And there are good MLM companies out there. The trick is to do all the research you can before you join any MLM business opportunity:

• Ask the Network Marketing rep who's trying to recruit you all those uncomfortable questions they'd probably prefer you not to ask, like "how many reps have joined and left in the past 3 months", "has the company had any court cases brought against them", "how much money did you make in your first 3 months as a rep", "what's the most frustrating thing for reps", and so on.
• Do your homework - check out the company on the internet, and read not only the official company website, but also some of those 'scam' websites.
• Contact other company reps in the area - simply to hear their stories, good and bad.
• Keep in mind, there is positive and negative in everything - evaluate the opportunity with both your heart and your head. Don't make any firm decisions immediately - always think about it for a day or two (if the person recruiting you is a good leader, they'll understand and shouldn't be pushy).   

So how do you become successful in MLM then? Well, you'll need your upline (the person recruiting you) to be a strong leader, mentor and motivator. They'll preferably need to already be successful in Network Marketing, and know some tricks of the trade that really work, so that you're not left 'showing' products to friends and family and spending more than you earn. Make sure the company is strong, and that you can relate to and are passionate about the products and how they can help people. If you're thinking about joining an MLM home based business opportunity, have a look at this one: Forever Living Products, who market Aloe Vera and Beehive health and beauty products. It's one of the longest standing, financially sound, ethical and most positive MLM companies I've come across.