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MLM (Part 2) – Common Tactics Used by MLM Distributors to Portray Legitimacy

Opinion

MLM (Part 2) – Common Tactics Used by MLM Distributors to Portray Legitimacy

Reading Time: 6 minutes

Previous: MLM (Part 1) – 4 Reasons Why You Should Avoid MLM “Business Opportunities”

“But Your Corporate Job is the Real Pyramid Scheme!”

This is a predictable script many multilevel marketing (MLM) companies use when trying to persuade sceptics. They will often lead with the notion that your full time job is the scam because you have to work such long hours and report to a boss for a set salary, whereas with them you could work your own hours from home and be an entrepreneur. This is false. As mentioned earlier, it’s impossible to earn money working part-time for an MLM company and almost impossible to be profitable even if you work for one for 12 hours a day. Also, most corporate jobs don’t require you to spend your own money in order to keep your job. Even sales representatives at legitimate companies get given fuel, cell phone allowances, and sometimes company cars in order to carry out their duties. Legitimate companies also won’t typically hire somebody unless they’re qualified and experienced enough for the position. They take the risk of employing you and paying you so that you can deliver results for them.  

MLM companies aren’t interested in how skilled you are as a salesperson. As long as you’re recruiting people to join the pyramid and you’re all buying your monthly quota of products from them, they’re happy. In the meantime, they’ll keep selling you false promises, forcing you to attend motivational (brain-washing) seminars, and gaslighting you into believing that you’re a successful person (like cults do!) even though you’re in mountains of debt and your friends don’t want to spend time with you anymore.

Being a distributor of an MLM company is not the same as being an entrepreneur. Entrepreneurs are often people who start their businesses from scratch and have the freedom to run those businesses in whatever ways they want. They develop competitive products and services and rely on transactions from their clientele in order to be profitable. They also have the freedom to market and advertise their products and services to a target market of their choice and have the freedom to change any part of the business in order to remain competitive. Often entrepreneurs know their businesses inside and out. Because of this, an entrepreneur is usually well informed and capable to answer any questions you might have about their business.  MLM distributors aren’t entrepreneurs because they are forced to sell specific products to a specific clientele. They must attend compulsory motivational seminars regularly, and their marketing strategies are often determined by their upline. Their upline also forces them to buy a certain amount of stock per month even if sales numbers are down. MLM distributors don’t work for themselves. They work for their uplines.    

Here are some other lines you may hear from MLM distributors:  

“I don’t know the answer to that, but what I do know is that this guy lost 10kg in his first week of using our product.”

Because you don’t need any education or expertise to become an MLM distributor, many of these distributors will dodge your difficult questions by just telling you their results. This is often because they don’t fully understand their products. Should you be investing in a product if the person selling it has no idea how it works? Also, smoking cigarettes and taking Crystal Meth have both been scientifically proven to aid weight loss. You wouldn’t take those as health supplements though.

“The reason you never heard of us is because the government/pharmaceutical companies/ haters want to keep us from telling you how amazing we are.”

This is a lie. If your product really did cure a disease and get the results these people claim they do, other organisations would also be selling it or some version of it. If essential oils really did cure cancer, why would organisations still be spending millions of dollars per year on non-oil-based cancer prevention? Why do doctors not prescribe it, why isn’t it being sold in every pharmacy at high prices, and why don’t educational institutions provide courses on essential-oils-based therapy? If something really is of high quality, people would queue to buy it, and retailers would want to sell it. When Apple released the iPod onto the market, many other tech companies jumped at the opportunity to create their own MP3 players. They didn’t continue selling discmen and tape decks while trying to silence Apple and convince the public that iPods don’t work. Successful businesses don’t go to tremendous lengths to silence the competition. It’s a waste of energy. Instead, they compete by developing new products, improving their products, or creating a similar product to the competitor’s.  

“…and I can guarantee that this is not a pyramid scheme or a scam.”

This is often said in an MLM sales pitch. What’s humorous though is that often these distributors bring this up before you do. It’s like when you were 19 and your obviously drunk friend bumped into you at a party and before you can even greet him, he exclaims, “I’m not drunk!” If someone goes out of their way to defend their legitimacy before you even asked them a question, should you really trust them?    

“Look at all these famous people who endorse us.”

Given enough financial incentive, there will always be celebrities who will be willing to endorse products from companies who seem legitimate. Like you and me, they probably also see how much money the MLM company has and how much its distributers at the top of the pyramid are making. That is then coupled with a big endorsement paycheque which is more than enough incentive for them to endorse. Some celebrities’ names are even used to endorse an MLM company before those celebrities even know what the company does. For an example of that, read this BizNews article on the matter: https://www.biznews.com/rugby/2020/06/25/crowd1-ponzi-alert  

“We’re not like the those other MLM Companies and Pyramid Schemes.”

In order to test the legitimacy of this claim, do your own research on the company. Don’t type the terms “scam” or “pyramid scheme” in your Google search though. Many MLM companies and distributors have purposefully flooded internet searches with videos and articles which preach their legitimacy. Its not unusual for you to type in the name of an MLM company, plus the word “scam” to find loads of brainwashed distributors 10-minute-long videos about how their company changed their lives because they’re obviously not scams (See my drunk friend example from earlier). Rather try and interview ex-distributors about why they left. Most of them will tell you because it was costing them too much money and they had been sold a lie.

Remember to always ask critical questions as well. Ask the presenting distributor how much profit (not revenue) they’ve made. Ask them if they know how much profit their uplines and downlines make. Ask them about what they don’t like about the product or company. “You love everything about the company and have nothing to complain about? That’s a bit suspicious don’t you think?” Ask them about what they think about Dr Taylor’s research and how they feel about the controversy surrounding their business. They will almost always answer this question by citing critics as haters and non-believers who are jealous of their success (like how cults train their followers to do!). Legitimate companies and honest individuals’ welcome criticism as an opportunity to better themselves, not as an opportunity to create enemies.

Related: Ponzi Schemes – How to spot them

You Encounter a Distributor. What do You do?

Judging by the content of this article, the obvious answer to this question would be, “Run away!” This is a good idea because it means that you’ll never be manipulated into joining an MLM company. Good for you!

However, there is a better way to handle the situation. The distributor is likely a desperate individual who needs to sign other distributors so that they can feed their family and get out of debt. They’ve likely been manipulated into thinking if they just keep going, they’ll get their riches. Therefore, the best thing in my opinion would be for you to have a conversation with that person. Use your critical thinking skills to ask them questions like the ones in the previous section. If you’re the relational type, take their number and chat with them regularly asking them questions which make them think critically about their decision to stay in the company. Saying, “This is a pyramid scheme, you need to get out!” will likely trigger them viewing you as just another hater that they’ve been trained to block out of their life. It could be a long process to help someone leave, but if one of your loved ones is having their lives and finances controlled by one of these companies, it may be worth investing the time to help them think critically about their position and make the decision to leave their own. This, according to Stephen Hassan, is the best way to help our friends and families leave dangerous cults and predatory MLM companies.    

Stay sceptical about things that seem too good to be true. Also remember that giving up on something is ok if it’s not working out. I’ve had several employment opportunities and business ventures in the past that could have hurt me if I stuck with them. It was tough to give them up, but that opened doors to other opportunities. I don’t like this “Never ever give up!” narrative that the motivation industry keeps pushing on us. Resilience is valuable and commendable in the right context, but so is having the wisdom to stop something that won’t take you anywhere. That’s why its important for you to have a community of support in the form of friends and family who can help you think critically about decisions so that you can live your best possible life.   

Keep Growing!

Previous: MLM (Part 1) – 4 Reasons Why You Should Avoid MLM “Business Opportunities”



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Dave Roebuck

I'm a Business Owner and Mental Skills Trainer at Evo Sports South Africa. I work as a personal trainer for the athletic mind and love to research all things sport and psychology related. I'm also passionate about understanding and dismantling narcissistic behaviour and predatory business practices.

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