MLM: OPPORTUNITY OR FRAUD?

            Assalamualaikum...

            Multi-level marketing…. First time I heard this words was when I watched Japanese drama series, Liar Game. I thought nothing of it. Though, I did read about it at Aidid Muaddib’s blog ( click here and here)… just for my knowledge but it didn’t concern me much.

pyramid scheme

           Recently, a post at one of the group I joined promoted Infinity Downline (ID). At first I thought, ‘MLM’. But then, the person denied it.

            Fine. Maybe I was wrong, I thought.

            That night, I came across that post again. This time, there were some replies on that post, indicating some members of the group were interested on it. 

            And I just can’t keep quiet anymore. The truth need to be told. I searched all about it and I am truly confident that ID is a fraud. Why?

            Because of the term ‘downline”. Downline usually associated with ‘pyramid’ scheme. Pyramid scheme is said to be illegal. Why? Because it is exploitative and dishonest. However, they are denying it; they said it is not pyramid. In fact, their system is like this.

A person, A searched for 2 people as downline (B and C). A took commission from B and C. After B and C managed to get 2 people each as downline, B and C is no longer related to A. So, A will have to get other people as the new downline. B and C will follow A’s footstep. 

Is it a pyramid scheme? No, it’s not. Still, the principle is still the same. Find downline, then you’ll get commission. If not, you’ll get nothing. For me, their system and pyramid scheme is the same. They just used the above reason to camouflage their true intention. 

In order to understand MLM, we have to know what it is first.

So… What is MLM??

MLM (Multi-level Marketing) also known as network marketing or referral marketing is not something new in Malaysia. Many companies were using multi-level compensation plans. They started first as single-level marketing then switched it to multi-level marketing. I think, this is one way to increase the product selling rates. The commission was based on selling rate. If the selling rate is high, the commission will also get high. Get my point here?

MLM is a marketing strategy so there is no such thing as legal or not. No law stated MLM is illegal. But when we talked about ethics, it is different from legality. Something may be illegal but ethical, and vice versa.

This is some of the guidance whether an MLM company is unethical…

• Very high entrance fee, usually above RM1, 000. Entrance fee here could include member fee, product fee, service fee, tax fee, etc... So long any fees that compulsory to pay as you join.
• Main focus is not selling products or services, rather to gather members.
• The company won't buy back all products or services sold out. Or there is not money back guarantee.
• Effectively, people at the bottom of the network pay money to people above the network. So people join first become benefited.
• Achievement, recognition, or level up need to purchase.
• Not focus on repeat sales, rather they sell product once in extremely high volume.
• The members engaged in fraud by misleading or misinterpreting the network or the products/services.http://www.blogger.com/post-create.g?blogID=7022562778442378665
• The members have no choice but to keep a huge volume of stock.
• Many countries have prohibited this kind of organisations.

(Directly quoted from here)

Easy money, I say.

Do you believe in all the MLM-ers, who’s claimed that it is easy to get money without any hard work? “Just join us, ask for a few people to join with you and get money”, they may say. Some of the products don’t even benefit us as their main point is to get new members and not to sell goods.

Pffft. Then, what is the use of the degree that we obtained in the first place? What is the use of study all nights, just to get a scroll of degree in order to get a good job if it is that easy to get money?

There is no such thing as a free lunch in this world.

 p/s: anyone are free to drop any comment. if what I wrote is wrong or you can just add whatever your opinion is... no offence intended for all MLM-ers..