You Are The Problem and The Solution (written September, 1999)
It never ceases to amaze me the extreme differing views on the topic of MLM. Some people are passionate about it in the extreme and make a full time income from it. On the other hand with some people, you might as well declare yourself a leper than admit to being in MLM.
So what is the problem with MLM then?
Could it be that it’s the pyramid structure? But you can’t really take issue with the tiered compensation structure. Almost every large sales organization in the world has that. Salespeople get commission, and sales managers get overrides or bonuses on top of that, and sales directors on top of that, and VPs on top of that.
Could it be the fact that you have to pay to join in it? But that can’t be it. That’s a standard franchising model. And I assure you, the franchise fee of most traditional franchises dwarf the sign-up cost of any MLM program by comparison.
Now certainly there are illegal pyramid schemes. This is where the money is all being made off of signing up other people with little or no real product ever being delivered. But in spite of whatever perceptions people may have, the fact is that Amway, Excel, Meleleuca, PrePaid Legal, USANA, and many others have sold millions upon millions of dollars of products to happy customers, many of whom are not also reps. So there may be a perception problem here, but if so, the perception is out of line with the reality.
Surely the bad reputation MLM has is based more on fact than the occasional illegal pyramid scheme?
I think the real problem with MLM is not MLM itself, but some of the people it attracts. MLM is simply just a business model. It pretty much amounts to “micro-franchising”. Its upside is that it has a very low cost of entry with the potential for exceptional revenue and there are those who achieve that.
But those same things that make it attractive make it attractive to many who are not really qualified or prepared to become business owners. The important characteristics of MLM make it attractive to people who:
- Have not done well in their business or profession and have little money saved up to invest.
- Have no previous experience owning or running a business.
- Have no previous experience in sales.
- Have little or no experience developing business relationships other than that of employer/employee/co-worker.
- Are not satisfied with their current level of income.
- Have unrealistic expectations of the amount of work involved compared to the revenue realized.
Don’t get me wrong. I’m not saying that there’s anything wrong with any of these things or that this describes even a majority of MLMer’s. Only that it describes a disproportionate number of MLMer’s and unfortunately many of them never do anything about it. As a result, many MLMer’s end up:
- Over-selling the opportunity.
- Inappropriately discussing business in social situations.
- Coming across as desperate.
- Over-focused on new recruits and neglecting existing customers as a result.
- Being either inaccurate or deceptive when talking about their business.
Again I’m certainly not saying that this describes a majority of MLMer’s. But it does describe enough of them to tarnish the reputation of the rest. To pre-judge someone based on the basis of a small minority of people in that group is horribly unfair but we must realize that most prejudices have some basis in reality even if it has been distorted.
So what’s the solution?
There’s a first time for everything. And you know I really believe that MLM is a great opportunity for people – the little guy. My point is this recognize it for what it is: it’s a business and you are a business owner. And if you’ve never owned a business before, if you’ve never done sales before, if you’ve never networked before, you need to learn about how to do so. From other MLMer’s and from reading books related to MLM every day of your life.
MLMer’s who are serious about building a business should be reading and learning about business fundamentals, the latest sales and marketing techniques, strategies for networking and business development, etc., not just swapping tips with other MLMer’s. You need to act like a small business owner and people will treat you like one.
The author of this article is Larry Costello, President of All-American Print & Mail, 2200 Wilson Blvd #102-57, Arlington, VA 22201.