It appears network marketing or multilevel marketing (MLM) is gaining some traction again among Filipinos in search of a way to earn some money. In the past two weeks alone I have received at least four invitations to so called business opportunity meetings.
I used to be involved in MLM. In fact I once took a one year break from my day job to concentrate on network marketing. I never really earned that much from it though. Nevertheless I found the whole experience quite enjoyable and educational.
So what did I learn? Quite a lot actually. But the most important is the idea that MLM is a legitimate business model that presents a very real opportunity for people to achieve financial freedom or to earn some extra cash.
I know that sounded a little too chirpy and somewhat corny like an overused motherhood statement. But seriously, as a business system, MLM shouldn’t be dismissed as easily as its evil twin, the pyramid scam.
To the newbie or casual observer it would appear that the two are one and the same. As a former networker who had the fortunate/unfortunate experience of attending more than enough business presentations by various companies including dubious ones, I am quite familiar with the inner workings of both systems and I can attest to the fact that MLM is a legitimate and ethical system while pyramiding is simply bad.
It’s really quite easy to make the mistake of assuming that they’re the same system. For one thing, networks formed under both systems take on the form of a triangle or pyramid with the one who enrolled first positioned on top and followed by a number of other people referred to us downlines who are also followed by other downlines below them.
I’d like to point out that this pyramid or triangle structure is not the dead giveaway of “scamminess” as many well-meaning but uninformed pundits think. There is nothing inherently wrong with the form. It is not even unique to MLM or pyramiding schemes.
The fact is the pyramid form is found in every imaginable organization. It’s how corporate organizations look like. Even the government follows this structure with the Head of State at the very top followed by other top level officials who are then followed by lower-ranked officials and so on and so forth. It can’t be stressed enough that there is nothing inherently wrong with the pyramid organizational structure.
What’s wrong with pyramid schemes anyway? The standard complaint is that, like the Ponzi scheme, pyramiding involves an unfair movement of money that puts members at the very bottom at a disadvantage. Moreso when there are no real products involved as this would leave those at the bottom with nothing to show for their investment. To illustrate, member A receives money from member B who then receives money from member C who is then left holding the empty bag unless someone else gets in to continue the cycle.
Unfortunately, in legitimate MLM, money moves in a similar fashion. The only difference is that there are products involved.
But then again most present-day pyramid scams also feature products.
(More to come in part two.)
Are you still doing any type of marketing other than MLM?
[Reply]
bp Reply:
June 7th, 2010 at 9:38 pm
gerry,
i’m not sure what you mean.
[Reply]
Robert Reply:
July 4th, 2011 at 3:34 pm
what is MLM?
[Reply]
bp Reply:
July 4th, 2011 at 8:34 pm
it stands for multi-level marketing.
[Reply]
teh… biglang nawala ang beauty mo at dumis appear ka ng tuluyan.. what happened sa yo ..teh? Di ngayon di ka makapag comment against Noy? Dapat lang dahil accept it or not, siya ang ating new president… di vah? teh… nasan ka na ngayon…
[Reply]
bp Reply:
June 11th, 2010 at 10:17 am
jansen,
kamusta? tagal mo ring nawala.
anyway busy lang kaya di makapag-blog. don’t worry i will resume in a few days.
as for noynoy, ikaw naman porke ba binabatikos ko noong kampanya ibig ba sabihin hindi ko magagawang tanggapin na siya ang panalo. dehins tayo ganyan. i’m willing to give him a chance and even support him. yun nga lang sana ayusin niya ang palakad. sa ngayon kasi puro bloopers pa rin talaga siya.
anyway, i really hope the yellow army’s choice will tun out to be a good one for this country.
[Reply]
YUng isang MLM company meron bagong gimmick ngayon (MLM) kunwari may pa concert, mga sikat na banda yung guests.
tapos recruitment event pala…
annoying… may ginawa ako blogpost tungkol dun, ang dami nagalit sakin… naninira daw, e di naman yun yung intention. Bat ganun mga MLMers, balat sibuyas.
[Reply]
bp Reply:
June 24th, 2010 at 3:42 pm
yodz,
probably, it’s because they perceive it as a threat to the company. siempre dun sila kumikita kaya pagnatatamaan yun natural lang na i-defend nila yun.
ang problem lang minsan kahit tama na yung puna hindi pa rin sila maniniwala. either that or kunwari di nila alam.
may part two pa itong post na ito kaya lang medyo busy. hindi ko tuloy matapos tapos.
[Reply]
I’m in agreement with you. My uncle is a veteran MLM leader and he has his own group of people who are invited by MLM companies to top spots in the pyramid. . People like my uncle basically tell members that they became rich and millionares because they worked hard and followed the company system but the truth is they have many more advantages then other paying members. Unknown to ordinary people, these leaders are actually supported by the company by giving them top spots in the pyramid, allowances and salaries, and huge bonuses that are not given to people who pay the company to become members. Of course none of these mlm leaders will admit it but this is a standard practice in the MLM industry.
[Reply]
There are lots of complaints in the system just as other sites News discussions
With the new administration, there could be hope.
[Reply]
Lots of complaints like sites News discussions
With the new administration there could be change for the best.
[Reply]
Pyramid schemes are illegal and violate federal and state laws. Do not get involved in any pyramid scheme. Avoid a company offering only one product. Diversification is important.
[Reply]
There are some companies actively targeting the youth market. Visit their offices and you will see that most of the people attending their seminars are kids as young as 16 years old.
Starting kids early in business is good but there’s a problem in this particular situation. What if the companies I described above are actually engaged in an unethical and possibly illegal scheme?
On the surface, the marketing approach of these companies seem harmless. They market to kids specifically college students because they see this demographic as “hyperactive.” According to their analysis of the market, college-level kids are the best group to market to because they spread information fast and they are very interested in making extra money.
I’m not buying it. I can see there’s something devious going on here. In my opinion, these companies are actually exploiting the fact that kids are much easier to convince with promises of easy cash. In short, these companies are out to dupe these kids.
I would suggest that the parents of these kids find time to help their children figure out what’s going on.
I’ve checked out these companies and I saw a number of red flags. For starters, their products are overpriced and their starter kits are padded to compensate for headhunting fees.
I’m confident an honest-to-goodness review of these companies’ operations would support my assessment. Unfortunately, until such a review is conducted these companies would just continue to operate.
[Reply]
there’s way too much misinformation about network marketing and pyramiding schemes. if you want to learn more about it go to http://www.propernetworkmarketing.com.
[Reply]
Please let me know if TVI (Travel Ventures, Inc.) Express falls under pyramid scam. Appreciate you looking on this. Better business Bureau if US says it is and is banned in Australia and China but it’s alarming that this has grown very popular here in the Philippines. Thanks and best regards!
[Reply]
do u have a list po ng mga pyramiding businesses here in the Philippines or abroad? (specifically ung company names po) thank u very much..
[Reply]
buti nalang nabasa q 2. muntik na aq dun s company n un ahhhh…….. i knew what company is it @investigation services, whose members are wearing red or black flags symbolizing the income they recieved from that company. its just my GF who I love…… get the capitals.
someone message me on facebook endorsing this kind of business. i met with them and honestly, i am convinced that it is very great to join because of the said EASY MONEY.
hope others can read this also…..tnx
[Reply]
maybe this applies for trying hard mlm companies. im into mlm as well very legit in fact our company will be featured in the Discovery Channel pretty soon.
[Reply]
GREED, not curiosity, is what kills the cat.
Greed of investors, really!
[Reply]
I can not detest the legality of MLM’s. But why is it research facts shows only 2% makes the money? Is it fair? Does legal also means moral and ethical?
MLM’s also has a predetermined life span, as if they are doomed by design. I think it make sense. They usually end up saturating the market as no one is watching the rapid growth of distributors number and not considering the market demands of their products.
I learn this law when I was elementary; LAW OF SUPPLY AND DEMAND…
every business has an expert monitoring market penetration and the demand of their products.. produce less than the demand you lose the potential income, produce more than the demand equals disaster.
this is what MLM’s do, they don’t care about the products and if all distributors have a good enough size market to sell to, and lets be honest, In most MLM the real money is by recruiting people, not selling products.
I may be wrong but if any of you find a MLM company that says;
They can only accept limited number of distributors depending on the market demands of their product to insure all distributors can make money through direct selling.
Then I will be the first one in..
by the way, some mlm companies avoid the term MLM or Networking when it should be the proper specific term for them. They use the term DIRECT SELLING, by definition direct selling is the direct personal presentation, demonstration, and sale of products and services to consumers. MLM is only one kind of it, those people selling cotton candy, balloons in the church, balot, hopia mani popcorn can also be classified as direct selling.. Its a broad general term that should not be used as a subtitute to the terms MLM and Networking..
I write a blog on this and I would like everyone to join the discussion..
[Reply]
bp Reply:
September 24th, 2012 at 5:21 pm
are you referring to direct selling livelihood incorporated?
the problem with most mlm companies these days is they overemphasize recruitment and totally ignore the part about selling actual products. that is one of the reasons why “saturation” or what some now call “era” happens.
[Reply]