Imagine this. You go for a job interview and here’s what the interviewer tells you.
“Hello John. For this interview I’m not going to ask you any questions about whether you’re fit for this job or whether you know anything about the company or not. I’m just going to offer this job to you. Just like that. Yep… really… just like that.
The only catch is that in order to get this job, you need to pay $500. This job is a sales job but you will get no basic pay, no EPF, no SOCSO, no employment benefits of any sorts. Sound like a shitty job?
Well here’s the best part… your job is to convince more of your friends and family to pay to take this shitty job and you will get a commission for every friend or family you convince to pay to take this shitty job. If you don’t manage to convince anyone to do it, then you earn NOTHING. BUT if you work hard and convince many people to do it… then THE SKY IS THE LIMIT AND YOU CAN MAKE MILLIONS! (at least theoretically)
So what do you say John? Does this job sound like a great opportunity to you or what?”
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If you answered NO to that question then you know that it’s a shit job and you know what a bad deal Multi-Level Marketing (MLM) is.
If you answered YES… then please state in the comments below because there are thousands if not hundreds of thousands of MLM sales people out there looking for people JUST LIKE YOU!
Let me backtrack a bit to why I’m writing this article. I’m writing this article because of the following comments on my Dayre.



I always thought that given how MLM has been around for so long people would know better but from the comments above it’s obvious that’s not the case. People still are getting into it with the wrong expectations. So I want to write this article now that will most likely offend an army of MLM sales people and their bosses… but I want to do it because I think people deserve to know.
The following is what MLM schemes tell you and what I think about it:
1) “The company you’re joining has a revolutionary product that is great and everyone wants to buy”.
No it doesn’t. If it really does have a great product that works and everyone wants to buy, why do they need to do an MLM scheme? Does Apple use MLM to sell their iPhones? Does Toyota use MLM to sell their cars? Does GoPro use MLM to sell their cameras? NO… they don’t. Because they don’t need to. The product sells itself.
The spectrum of products MLM companies sell are at one end products that are completely useless and utter scams to the other end that are products that have some use and are okay at best. That’s it… the best MLM products are just okay. They’re not revolutionary, they’re not magical, they’re not great… they’re not something that everyone wants to buy on their own accord.
2)” MLM is a chance for you to do your own business”
Well the raw definition of doing business is basically “engaging in commerce”. In which case the MLMs aren’t wrong to say that.
But what’s often implied in the use of the term “business” by MLMs is that if you sign up as a downline, you become an entrepreneur. Entrepreneurs take something and make something out of it. They create full-time jobs by selling a service or product that society wants and needs.
That is not what you are in an MLM. You are a salesperson. A salesperson who actually works for a company but doesn’t get a basic salary or any benefits of a full-time job. So you’re a sales person with a pretty bad employment package.
3) “MLM is a great way to earn passive income and we need passive income to grow rich”.
If you have another full time job. This is the sell they’ll give you.
People grow rich not from doing many many different jobs that earn you commission. People grow rich from being good at ONE thing and focusing on that.
In fact the very few people who make good money from MLM (don’t get me wrong… I’m sure there are some out there) are those that do nothing at all but make MLM. They make MLM their full time jobs. So it’s not a passive thing to them.
But the people growing really rich from MLM schemes aren’t the downline.They’re the bosses who started these MLM companies. And look… they’re focused on being good at ONE thing and ONE thing only. To sell you a dream. And they’ve become rich for that.
Also, the definition of “passive income” is income received on a regular basis with minimal effort to maintain it. This is NOT the case for MLM. It IS a lot of effort to first recruit all that downline you need… and don’t forget you have to maintain them too? If they drop out, so does your “passive income”. MLM income isn’t passive. It is very very active. The only one difference is that you don’t have to sit in the office.
Now here’s what MLM companies don’t tell you.
1) That you will likely lose your friends
When I was 16 years old I made friends with this girl who was in my BM tuition class. We saw each other fairly regularly till I was 21 years old then lost touch with her for a couple of years. She was special to me though because we go a long way back.
Then one day a few years later she messaged me about wanting to meet up and catch up on old times. I was delighted of course. I happily made the time to meet up with this old friend of mine. Within 5 minutes of sitting down with her at a coffee place I realized what I was into. This friend of mine wasn’t interested to catch up on old times. She was only interested in one thing. To recruit me to join her MLM scheme.
I felt cheated. I felt lured in with the prospect of maintaining a friendship only to realize that all I was… was another potential downline.
Right that moment she dismantled some 8 years of friendship or so for an MLM scheme. I never saw her again and never bothered to make contact with her again.
2) You will likely hurt your family
The Dayre comment I posted above is one perfect example of the strain MLMs can put on a family. I’ve seen families where the insistent son or daughter looking to earn money goes out and convinces the father or mother to part with their hard earned money.
I’ve seen families that become less close because one MLM sales person started using family gatherings as an event to recruit downline.
I’ve seen families fight, because of MLM schemes.
Can you earn some money from MLM… OF COURSE YOU CAN… but very often the price you pay is that of your friends and of your family. So what are your friends worth to you? What’s your family worth to you?
3) That if you’re good at selling, why don’t you sell stuff that people have a use for?
The difficult thing to swallow about MLMs is that most (not all) of them sell products that are fluffed up or useless. How many times has a friend come to you wanting to sell you an MLM product but no matter how hard you try and want to support this friend of yours, you can’t get over the fact that the product is useless. It doesn’t really do you any good at all.
If you’re good at selling.. why don’t you sell properties? Why don’t you sell cars? Why don’t you sell phones? There are a lot of things you can sell and if you’re good you’ll make just as much money or more than an MLM can offer you. Plus you won’t even have to pay an upfront fee to sell these other things.
4) That there is a value to your time
Lets say you put in an investment of RM1,500. After going out there to recruit a number of people you finally make something like RM2,500. That’s a profit of RM1,000 right?
WRONG!
Realistically you have to take into account time costs. How much time did it take you to make that RM2,500? What other costs are involved? Phone bills, parking expenses … meals.
AND… if you had spent this time working at another sales job that pays a commission, would you have made more?
5) That they’re not a scam
I wouldn’t disagree with this. Scams are when you’re told that you’re going to get something that you don’t get in the end. MLM doesn’t exactly scam you. They tell you upfront that this is the deal. That you have to pay this and if you work hard and sell a lot you can make money. If you don’t… then you don’t.
Do they oversell the glory of being in MLM? Sure they do and they do that intentionally too. Look at how they often talk about their success stories of people making a lot of money or driving nice cars. But at the end of it… you know what you’re getting into when you join an MLM. They don’t really scam you and that’s why a number of them are still legal.
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What’s my beef with MLM then if I don’t think it’s a scam?
My beef with MLM is that it tugs on the very same emotions that casinos tug at and that is greed and hope.
The sad thing is, most of us human beings are weak to that. We often let greed and hope get the better of us and that’s why MLM has hurt many many people just like gambling has. The only difference is perhaps there is some entertainment value that can be derived from gambling. I don’t know what entertainment you can get from pitching MLM to your friends.
Do people earn money from it and does it create disposable income? Yes for some people it does. For many others it doesn’t.
Should you stay away from MLM?
That’s your decision to make
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Update: I’m aware that definition-wise there is a difference between an MLM and a pyramid scheme. For one, a pyramid scheme asks you to pay a certain capital up front (just like in my example), whereas a proper MLM doesn’t. Pyramid schemes are illegal. MLMs aren’t.
But today the layman on the street refers to pyramid schemes as MLMs. Look at the case of The Richest Man in the World. Was that referred to as an MLM or a pyramid scheme? Even pyramid schemes don’t want to be referred to as pyramid schemes.
Sure it doesn’t help that pyramid schemes masquerade as MLMs and yes it does bring a bad name to the traditional MLMs but now they’re often referred to as MLMs and my article refers to these bad MLMs that don’t sell proper products. They appear to sell products but what they’re really selling is a promise of getting rich and making a lot of money.