What are MLM brands and why are they bad?

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Also people say they ruin lives, how?

In: Economics

19 Answers

Anonymous 0 Comments

No explanation here, just an anecdote:

I had a “friend” try and sell me on the idea of an “unfranchise” model. They thought I’d like the opportunity to be part of their business model, since I was already independently operating a business.

The trap is they sell you on “it’s easy money, but you have to work hard”, but also that they rely in marks not to do their independent research. The offer was essentially to be another link down the chain.

“Just like a shopping mall” you had your website, you sold stuff off your website, and you could “give” your friends and family discounts for buying directly through you, except you don’t pay franchise fees. And you could increase your earning power by bringing on more people.

I presented the following, all of which were refuted with “but my mentor said it’s ok”:

Franchises at least give you notoriety via existing brand power: None of what I saw that they sold existed in any media I had consumed. Where were their advertising stats? Consumer target markets etc? Oh, you’re supposed to advertise word of mouth, because that “still works”.

Franchises give you actual purchasing power: I looked around, and if I look up the price of that product online, it’s exactly the same price everywhere else, and cheaper if I buy elsewhere in bulk. What’s your 5% discount compared to that?

Franchises have regulated training – your mentor taught you everything to be successful? Sure. What’s the difference between your product and the cheaper competitor? It works? So does the competitor’s. It’s scientifically tested? So is the competitor’s. Try again.

Having your own business means that you could actually have power over your inventory, but in this model you’re forced to purchase, and keep purchasing to a minimum spend to earn your commission.

You have access to their exclusive warehouse? Why not just use their website to sell your own stuff? I brought up that they could have made a killing sourcing and selling toilet paper for 3 months instead of “vitamin C supplements” and that they still had sold a few and insisted it was worth it, they just hadn’t sold much because they “decided to take a break and focus on other things”.

Just UGH. It’s definitely cult like.

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