"MLM is either an expensive hobby or a lucrative business, it is your choice." ~ Unknown
Network marketing, or multi-level marketing (MLM), isn’t illegal, fraudulent, or unethical.
Network marketing isn’t an opportunity to get rich quick off the payments of others who join the organization. That’s a pyramid scheme.
Network marketing isn’t a pyramid scheme, which is illegal and unethical
Network marketing isn’t an opportunity to get rich quick. Period.
Network marketing isn’t build on simple mathematics where many losers pay a few winners. That’s also a pyramid scheme.
Network marketing isn’t an opportunity to let someone else build a sales organization for you.
Network marketing isn’t just for salespeople.
Network marketing isn’t expensive. Unlike most other business opportunities, the start-up costs are low, almost always less then $500 and often under $100.
Network marketing isn’t a way for companies to sell huge amounts of inventory to distributors.
Network marketing isn’t a way for distributors to sell stuff that nobody wants or uses.
Network marketing isn’t a license to sell products and services at inflated prices.
Network marketing isn’t for people who aren’t willing to work hard.
Network marketing isn’t for anyone who can’t or won’t follow a proven system that leads to business success.
Taken from Network Marketing For Dummies by Zig Ziglar
Is M.L.M Like a Chain Letter?
To an uneducated person M.L.M may appear to be like a chain letter. With a chain letter, one person is sending a letter and making money off each person that comes in later - but the truth is, M.L.M is much different than a chain letter.
First off, let me define what a chain letter is. It's an illegal scheme whereby the recipient receives a letter that attempts to induce the recipient to make a number of copies of the letter and then pass them on to one or more new recipients. To participate in the chain letter, the letter suggests sending money to the sender of the letter.
What makes this illegal is that there is no real product or service offered to the letter recipients.
Now, of course a chain letter is different than M.L.M or network marketing because in a legitimate M.L.M, there is a real product that makes someone's life better. With a chain letter, there is no real product.
Let's take a closer look from two perspectives:
1) Legal
From a legal perspective, a chain letter is illegal because it doesn't offer a real product. The fact that chain letters often make in.come claims is also sited in a recent U.S. Federal Trade Commission case against a chain letter sender. Personally I feel this is inconsistent with other industries (more on that below).
2) Ethical
From an ethical view, a chain letter is unethical because it is misleading and there is no "product" that makes someone's life better.
In a recent chain letter case brought before the Federal Trade Commission the FTC stated, "It is alleged that the scheme is an illegal chain-letter; that the earnings claims were false; and that most participants would fail to make any money."
Interesting...and inconsistent.
Here's something I find to be very inconsistent about the FTC's statement! The below graphic was taken from a STATE lottery web page that is "legal." The text below the graphic reads: "Players now have 4 chances per week to become a millionaire!"
I don't know about you but I would call that an earnings claim! It's also proven that most people who put their money in a lottery "failed to make any money." So why does the Federal Trade Commission allow this?
In addition, I'm finding it difficult to figure out where the "real" product is in lotteries, or gambling for that matter.
What I find most fascinating is these two statements from the FTC's web site concerning "foreign" lotteries:
1. "If you play a foreign lottery - you're violating federal law." I think it's obvious the government is after money for themselves - if they can't make the money, then lotteries are "illegal."
2. "There are no secret systems for winning foreign lotteries. Your chances of winning more than the cost of your tickets are slim to none."
Wow - can you believe that statement?! Like the "chances" are any better in the US lotteries!!
The bottom line is that M.L.M is not at all like a chain letter and rarely do chain letters use M.L.M to deploy their scams. Only to the uneducated would M.L.M appear to be like a chain letter. Chain letters are illegal and unethical because they only instruct recipients to send money with no guarantee of getting anything back, not even a product that would make one's life better.
Now, this is really interesting. As for earning claims, the FTC doesn't want people in business opportunities to show their bonus checks or make ANY statements concerning money that one can earn in M.L.M because that is what they call "enticing someone into the business with money."
Hmm, that's odd...I wonder what they call this?
It's illegal to show your M.L.M bonus check...that's about the size of your hand... but it's not illegal in lotteries to show a check THE SIZE OF THREE PEOPLE?!!
It all comes down to this...your M.L.M business is a legitimate business. You sell real products and services that people need and want. You help other people to sell those products and services too. I think you can see from the comparison above that chain letters are not a legitimate business.
In the M.L.M industry we have to overcome people's misperceptions about the industry itself, but here's the real truth: It's not that hard to do if you are educated on what M.L.M is and what it is not.
My purpose with these newsletters is to educate you so that you can never be thrown by any objection to M.L.M that you may get. Think about how it will feel to be rock solid in your understanding of M.L.M and how it compares to various "scams and schemes" that people mistake for it.
Listen to this month's training class at http://www.firstclassmlmtools.com/teleclass and I'll give you more tips and facts to help you get prospects past their misperceptions about our business model. :)
