Big Myths and Facts About Multi-Level Network Marketing Programs

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Updated: July 14, 2020

At some point in your life, you must have been invited to join a multi-level network marketing company, I know I have – as well as almost everyone I’ve asked.

So did you join? If yes, did you lose your money or did you make some?

If I invited you now to join a network marketing company, would you consider becoming my downline or would you become turned off and never come back here again?

Truth be told, there are really a lot of people who have lost money in these companies. But I wouldn’t entirely blame it on the network marketing company.

While some are indeed pyramid and ponzi schemes in disguise, there are however, a handful of network marketing companies that have produced multi-millionaires.

I am not a member of a network marketing company (you’ll find out why later), but that does not mean that I don’t like them. Actually, I do encourage people to try it out because it is really a proven way of becoming rich.

And so for those who are “allergic” to MLMs (like I used to be), and for those who are actually thinking of joining one – I now give you some big myths and facts about Multi-Level Network Marketing programs which I hope you would find useful.

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Big MLM Myth:

Start-up MLM companies are better because its market is not yet saturated.

Fact: Saturation does not exist.

Ms. Rhea Horrilleno, a Nu Skin Blue Diamond member, explained it well by saying that if there is saturation in network marketing, then it follows that there is also saturation in other careers as well. This means that new doctors, new lawyers and new engineers should not be able find jobs today – but most of them do (if not in the country, then overseas).

Moreover, you can just simply look within your social circle – how many of them are active members of a network marketing company? Chances are there is none or only one or two.

FACT: Since there is no saturation, then it follows that it’s better to join established network marketing companies.

While I have nothing against new MLM companies, I do have a bit of bias towards network marketing companies which have been in the industry for decades because that’s proof that their compensation system is strong and sustainable – pyramid schemes usually last only a few years.

Big MLM Myth:

You have to be one of the first to join so you can be on top and be able to make the most money.

FACT: The amount of money you earn does not depend on when you joined or where you are in the geneology graph. It depends on how productive and effective you are in selling and recruiting.

I have personally met two people who have experienced tremendous success in network marketing. One is a distant relative of mine and the other one, the mother of a friend. Both have joined in the early 2000’s and are now financially free.

What’s important to note about them is that, they actually earn more than their direct upline and the MLM companies they joined started in the Philippines way back in the 80s and 90s.

Big MLM Myth:

You don’t have to be a salesperson and you can do this on your spare time.

FACT: If you want to be successful at this, then you have to be a salesperson or at least be able to learn and develop sales techniques.

There are three things you actually sell in network marketing: the products, the income opportunity and your success. If you don’t know how to sell at least two of these three, then you’ll fail at it.

FACT: This will take up most, if not ALL of your free time or more.

As I’ve said in my previous post on The Basics of Multi-Level Marketing – joining an MLM company will involve setting-up and attending regular meetings and marketing schedules.

Moreover, you will likewise be spending a lot of time generating leads and following up on prospects, and not to mention attending more seminars to enhance your sales techniques.

And this is the main reason why you should not go into network marketing – because you won’t be able to give it time priority as you are already busy with other endeavors.

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Big MLM Myth:

It’s easy to become rich in network marketing.

FACT: Network marketing is NOT a get rich quick scheme.

Again, according to Ms. Rhea Horrilleno, a network marketing business takes five years to mature. I’ve met many who quit within a year and leave feeling they were tricked into joining – now I know why.

Many considered MLMs as a way to make some quick bucks. Lured by the prospect of earning millions, they become disillusioned and disappointed when one by one, their prospects reject them and their friends start to avoid them.

A network marketing business is at the most basic level – a business. Which means it’s something that you should nurture and grow, with patience, determination, passion and focus.

How about you? Do you know any more big myths and facts about multi-level network marketing? Do share them below.

Moreover, one question that many readers have asked me – how do you know if a network marketing company is a good one?

You can learn that here: How To Choose The Right Multi-Level Network Marketing Company

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Photo credit: dsevilla and James Thorpe

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16 comments

  3. Thanks for the excellent, well written, and informative post. The part about sales really resonates with me. I wrote in my ebook that you MUST have sales skills to succeed in this industry. Without this, it is almost impossible to find success in MLM.

    Thanks again!
    Michelle

  4. I really do not trust MLM companies in the Philippines especially those that highly depend on earnings from new recruits.

    Making money online is better than MLM…

  5. Recently I’ve been attending seminars on FINANCIAL LITERACY and so far I’ve learned a lot about them and about money management and investment – mutual fund, health insurance, real estate ect.

    Their company is the INTERNATIONAL MARKETING GROUP or IMG located at AYALA. Their progarmme so far is giving seminars Series 1 to 25. From series 1 to 3 it’s free but from series 4 and above you have to pay around P3,700 pesos for the kit, brokerage license and the S.E.C. registration.

    I have been acquainted to a lot of them their. Some of the trainers are doctors, musicians others have work outside too.

    I was asked to bring in somebody their to.

    I am close to believing that they are MLM to or Networking company.

    Just don’t know if you know about this company Fitz? If you did, please hit me back!

    Thanks more power!

  8. @Roldan – Though, you asked Fitz, I cannot help but express some unsolicited thoughts 🙂 IMG is a network marketing company. They package products/services ( from different companies i.e. ALI, Grepalife, PhilEquity, etc.) which fit into their mission/vision. Financial literacy is VERY important (Fitz, I am sure won’t disagree to this.). That is IMG’s core mission, which I believe is a noble one. Learn as much as you can from their seminars. It is also their aim that all members will be good financial planners and executors. Hence, aside from seminars, they also package and sell the corresponding products/services.

    I know some people there at IMG, and some from World Marketing Alliance (way back 2000)- which, if I am correct (verify this), is where IMG is affiliated.

    I am not a member of IMG now for 3 reasons:
    1) TIME – I do not want to chew more than what I can swallow. It is really great to know that there are lots of opportunities out there. But, time is our only true limiting resource. I will feel I am being ‘greedy’ if I get into it with my current load, and perhaps, just make a mess out of it.

    2) I already have similar products/services (real estate, insurance, mutual fund, etc.) that IMG offers. As for their seminars, I am already exposed to the concepts way before, through other companies and from my own personal study, learning, research and experience. But, I do not mind attending their series of seminars if I can squeeze out time from my current schedule. I am sure I will pick up a thing or two and learn some more, and meet interesting people.

    3) If in case I decide to give it time, I think I will rather setup my own company with similar mission.

    Every business, IMHO, has a bit of ‘network marketing’ by nature. All have to ‘network’, ‘connect’, to people for the business to flourish. Profits from sale of products/services are also given to people involved in the business process.

    Network marketing, multi-level marketing, or direct selling companies are very good ‘schools’. It is in this business that you can have the chance to really know your potential, your strengths, personality, attitude – an acid test worth going through. It is also in network marketing that you can learn a lot about and from people you know and those you just met in the process. The results are visible and palpable – success, disillusionment, positive mindsets/attitudes, mental closure, etc.

    When the dust settles, I would like to think that it is mostly not about the company that network marketers experience failure, but it is what they do in the business process. Like all businesses (MLM, traditional, or whatever classification), an MLM or network marketing, or direct selling company, is still a business. There is always the risk of failure, and of course success.

    Learning, applying, learning some more, and applying some more, making decisions, going for it – is the process which makes this ‘life’ more exciting. It goes the same with any business, network marketing or not.

  11. I don’t agree with the explanation of Ms. Horilleno that saturation does not exist in MLM business. It cannot be compared to new lawyers, new doctors. Let us admit, we need doctors because everyone gets sick. Every company has annual physical examination, everyday somebody dies. There are a lot of people in the hospital. this is one thing that is certain, that at some point of your life you will get sick no matter how minor or major the sickness is, you need a doctor and since doctors have varied specialization and with the years of studying that comes with it, the industry is well spaced and obviously, the new doctor will still have a job especially in this country where doctors in public and private sectors are short in number. And besides, board examinations are hard to pass.

    New lawyers will never ran out of job. MLM business has legal transactions, everyone at some point in their lives have legal business to take care with. Even in death, you need a lawyer especially if you are landed, rich, like the MLM top earners. Hey, where would their money go when they die? It’s for them to take care. Like doctors, they have varied skills. There are different legal aspects of law. And like doctors, not all who passed the LLB course can become a lawyer. You need to pass the bar. With the years of studies still need to be completed, this industry is likewise well spaced and definitely will not ran out of job. He can be notary public also if he does not wish to practice law anymore.

    But with MLM, saturation exist especially if the product you are selling is not one of the basic necessities of life. Where one can live without it. So, when you have recruited everyone you knew or if not you but others in your organization or others belonging to different MLM business, you’ll ran out of market especially if those whom you recruited did not get their money back or were not successful in recruiting others so they can have a part of the membership fee and incentive on sold products, then the MLM business is dead.

    So in MLM, it’s a choice whether you’ll sign up for membership or you’ll buy their product either way, you will reach a point here where no one no longer wants to continue with their membership or worst patronize your product because let us admit it, MLM products are overpriced and most if not all are not proven effective. Whereas, doctors and lawyers, it is a choice yes in the beginning but at some future point, you know their services will be a necessity to you.

    Doctors, lawyers and other professionals sell their SERVICES while MLMs sell their PRODUCTS. Here alone, there’s no point of comparison since they are not the same banana.

  12. I agree with Sarah, the demand for those products and services are different. I stumbled upon this site because I’m trying to research about MLM. Someone shared on facebook about financial literacy coaching. I signed up online and received an sms that I was invited to join the seminar. I attended last night which is really informative and convincing. The company is International Marketing Group (IMG) providing different investment opportunities on long term health, mutual funds, stocks and real estate, etc.

    I’m considering to join the level 1 Kaiser health insurance however my concerns are that there is 7 yrs of monthly payment for investment and it will take 20 yrs for the maturity of investments and after that a member can get the money invested that is doubled unfortunately amount.
    Im not sure if I have the discipline to pay for that period and it will take 20 yrs for me to get my investments.

    What are your suggestions ? Im really thinking of stock market because I read Mr. Bo Sanchez’ book however I’m not knowledgeable about it. Responses are highly appreciated. Thank you.

  15. This is the most bogus article I have read in quite some time. Just trying to put falsified data and to encourage more naïve people into joining shady MLMs.

  16. Hi, art. Kindly share with us the false data that you see in the article, so I can correct the information. Thank you.

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