The pitfalls of unethical behavior for MLMs
Multi-level marketing or MLM is also known as Network Marketing. It is a type of business that operates its products directly to customers by means of relationship referrals or direct selling. You've probably heard it before, "I want to tell you about a great business opportunity, all you have to do is come to a lunch or meeting and listen; no strings attached." And you know that there's always hidden agenda and that they'll try to sell something but you go anyway. There are millions out there that have been taken by the pitfalls of unethical behavior for MLMs. Let's talk a little more about Multi-level marketing and how unethical behavior has affected the industry.
Here's how it works
Independent sales people of multi-level marketing companies are generally referred to as distributors and represent the parent company. They are rewarded on a commission basis depending on the volume of product they sell. Each independent distributor can develop their organization by building an active customer base or selling direct from the company. They can also earn a profit by retailing products they have purchased from the company at wholesale prices. Distributors then earn commission based on the sales efforts of their team, or organization, so the more your team makes the more the Distributor makes.
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The issue of Legitimacy
If you have ever questioned the legitimacy of a multi-level marketing company you should know that you're not the only one. Unfortunately the credibility of those that are legitimate MLMs has been stained by the thousands that are not legitimate MLMs. It is sometimes very difficult to distinguish a legal and reputable MLM from an illegal pyramid scheme. Most legitimate multi-level marketing company's commission is earned only on sales of the company's product or service. Money is never earned on just recruiting alone.
The pitfalls of unethical behavior
So what's so appealing to an MLM company? Here are just a few of the reasons multi-level marketing companies are so appealing:
- Multi-level marketing companies are famous for creating brochures or videotapes that will appeal to greed and materialism. It is most usually an appeal to the "American Dream" with pictures of big homes, a luxury car, a boat, or pictures of couples stepping into a private jet on their way to the Bahamas. While the appeal seems "too good to be true" people are caught in the snare every day. It is unethical and dishonest, but MLM companies continue to use this bait.
- There is usually a lack of information which is actually an MLM incentive. Part of the appeal for many is the opportunity to "be your own boss." While that all sounds nice it will only lead to extraordinary product claims that are deceptive and dangerous. Many of the "word of mouth" testimonials, or "studies" done by scientists have been fabricated endorsements or seriously misinterpreted and in fact would never be allowed in the "real world." MLMs have a way of getting undue credibility by exploiting people's relationships and friendships via networking.
So if you have ever considered joining an MLM you would be wise to consider the pitfalls of unethical behavior for MLMs first. There are some legitimate ones out there, but many others that prey on unsuspecting individuals looking to live the "American Dream."
