Surviving MLM (Multi-level-Madness)

Have you ever been taken by surprise by a stranger who sneaks in on you and is overly friendly (as if he knows you since a 100 years); laughs too much; and even treats your most insignificantly stupid utterance as the world’s funniest joke; tries to know a lot more about you (definitely a lot for a first meeting) – especially when you are busy; or when you are seriously reading the back cover of a book, which you are considering to buy; or may be when you are another harried customer in a long checkout queue at a store? And then within 5 minutes he flashes his business card and tells you that he is a business consultant (BC), out to recruit partners. Asks for your number and (or) invites you to a “business-presentation”.

Rings a bell?? If yes, then you’ve just been MLM’ed.

After being involved with one such Multi-Level-marketing business venture for about 4 years and then getting out of it, I feel I am in a fairly decent position to post a review on this as an avenue of income. And through this post, I will share some things, which are never talked about…in fact, never even mentioned to the new “TRULY-ENTHUSIASTIC” (..no “EXCITED” is the word they use!) business owner. This is stuff which you are just left to discover *in due course*.

In India, inspite of all the strides that we make in the much hyped Info-tech and Bio-tech sectors, and inspite of the much published economic growth and all that, there are a very large number of people only know their “ENDS”, but they don’t have the “MEANS”, to reach there. Some people have the means, but they are insufficient and there are still others who dream about living the good life, but realize that with their means, by the time they reached there, they would have also reached the exit gates of LIFE. And due to our teeming millions, the prevailing mentality is to get rich overnight! There is nothing wrong about wanting to get rich, but what is wrong is this deep rooted desire to just go to bed one day and wake up a millionaire. That is nonsense! It is insanity. And most definitely, it is the root cause of most undesirable acts/crime today.

Let me begin with how I became the IBO (independant business owner). Somewhere between the extremely poor, fighting it out to even get 2 meals in a day and the filthy rich who can afford to wipe their ass every morning with a Rs.500 note, I place myself somewhere in the middle, as an average guy; married, go to work 40hrs a week; Sleep in late on weekends; borrowed some money from a bank and payout EMIs everymonth…etc. etc. 4 years ago, I was the very ambitious dreamer (which fortunately I still am) and I just happened to meet one such BC on an insignificant evening, who asked me about (after the pleasantaries) where I work, what I do for a living, whether I was married (I wasn’t at that time), blah..blah..blah..and then suddenly he popped a question! “what car do you like?”, and I went…”WHAT??”, and the question was repeated again “What Car Do you like?”. I just blurted out some car brand and bang…second question “Why dont you buy it?” – oh isn’t it obvious? I don’t have the money to buy it. I will when I have (those days, my primary mode of travel was a trusty LML-Vespa, which I bought with my own money at the age of 22..ofcourse on EMIs :p )the money. BANG! Third question…right on “What If I showed you how to get that much money?” and I was…”Man! is this guy real? What is it he wants me to do?”. This kindled my curiosity to know more and there, I was invited to a “No-Obligations” “Business Presentation” at FICCI (near Mandi House, New Delhi). Well I must admit, it was heady and I was hooked (looking back, I think how gulliable I was then!).

Now I will not waste space/energy here describing what happens in those meetings and what is conveyed, because that is something which anyway a BC would tell you. I would like to put forth stuff which is “never said”….stuff which you figure out on your own….stuff wihch is forbidden to even discuss with your business partners..ofcourse with relevant references to stuff that you do get to know.

The Business Model (definitely looks like a winner….):
  • Direct sale from point of production to customer.
  • Eliminate Distrubution and logistics/Advertisement cost.
  • Distribute the Distribution and Logistics Cost amongst the customers as incentive.
  • Make the customers as business owners by allowing them to sell the products directly.
  • Make customers replicate themselves by recruiting more customers who do the same things and they in turn recruit further…..
  • …..and bang, in 2-5 years, you are a millionaire.
But over a period of time, one realizes that this business plan is ‘over-simplified‘. I doesn’t look like that initially, because for an example, a very successful business model (Mc Donald’s Franchisee) is chosen, to make the whole thing very convincing.

Stuff that is never told and you realize much later in the business (surprisingly, some people never do) :

  • Earning 50000 bucks a month cannot get you a Mercedez Benz, Because you still have to pay for you and your familiy’s food, clothes, shelter, school fee, bijlee/pani, groceries, etc. etc. So get real! You need consider other logical aveneues of incomes.
  • The products are ridiculously expensive.
  • They say, “become your own customer”…After a while you realize that “YOU” are your “ONLY” customer!
  • The profit margin is not even enought to cover your operating expenses.
  • There is an extra overhead to buy:
    • tickets to weekly meetings (aka Business Presentations)
    • tickets to Monthly Seminars (by ‘invited’ speakers (who are already in the business), who earn a fee for coming and speaking, along with accomdation and other expenses)
    • tickets to Annual Day Long events (several invited speakers)
    • Books
    • Tapes/CDs/And other materials
  • You are told that you *HAVE TO* buy your own set of books/tapes because you are a businessman and you need to have your *own-tools* for the business. What nobody tells you is that your upline gets a percentage of the sale! So the more tools moving in your group, more %-cut to you.
  • The real money spinner is the tools and training business. The organization which claims to work parallel with your primary product/services partner and provides you with “mentoring” on how to do the business by conducting seminars and by selling you Motivational Books and Tapes. This is the organization that makes the most money. And your upline is also part of that after reaching a certain ‘pin-level’.
  • Most of your friends will start avoiding you and you wouldnt even realize it because your “new” best friends would be your upline and your so-called “team”.
  • Your current occupation will be made fun of, one way or the other…supposedly to motivate you to “build-the-business”.
  • When you ask, “Is it about selling?” they say, “No No…this is networking”.
  • You are all the time pestered, to “use your own products” But somtime closer observation shows that the people above you dont follow that all that religiously! Reason: If you use ALL your products, they get money anyway, so why bother :-).
  • You cannot do this “part-time”, juggling your job, friends, family, etc. etc. You don’t get rich. You only end up being a sales man for products which most of the time is consumed by you alone.
  • They sell you the dream of unlimited time & unlimited money. But if you take notice, the millionaire pin level people, are never in one place, they keep hopping from venue to venue to do speeches/seminars, etc. And they try to project it as badge of honour to be doing it. I wonder, when do they ever go home? You and I atleast get to come home and relax. THEY just dont have the time to do that.
  • They keep drilling in to you not to complain.
  • It is made to looks as if some favor has been done on you by sharing this business with you. But believe me, it is *actually* exactly the opposite.
These “training and support” organizations do have a few positives to it too:
  • Some of the books that they recommend are really good to read and helpful. E.g. How to win friends and influence people (Dale Carnegie) [Read Summary] They give you a very good perspective on leadership.
  • They promote good family values and respect for each other (that is a nice thing).
  • It is a good place to learn communication, especially if you are an introvert and are afraid of talking to a group of people.

Some seemingly different terms, which mean just the same thing (selling something in a pyramid scheme):

  • Multi-Level-Marketing
  • Multi-Level-Franchising
  • Private-Franchising
  • Network-Marketing
  • Network-Franchising
So, in the end, my verdict is that:
  • If selling is not your cup of tea, stay away from this.
  • If you like what you do at present, do it as there is a greater chance of you succeeding.
  • Research all aspects before you jump in.
  • If you dont feel comfortable, quit it. You will save a LOT of money in the long run.
  • The 40 year plan still works and works well because it is never a money problem but always an idea problem (related link)
Selling soap is not what I want to do with my life. I am no longer in the MLM busines and have a lot more fulfilling life, doing things that I like to do, and when I like to do them and as the Mc Donalds commercial (what a co-incidence!) says so succinctly…”I’m loving it!”.
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8 Comments Add yours

  1. Suresh GP says:

    Anand,

    This is an article worth a million.. I am really glad that you had the time and energy to draw out clearly the Captivity of MLM/Business Networking..

    The Concept was tried selling to me for atleast 3-4 times…I ignored it because I did not feel comfortable.. Now if someone asks I have ample reasons to showcase them and finally have a spate of relief and peace…

    Thanks for the detailed insight to the so called Captivity Assured”

    Enjoying work and Making life admiring is an art….

    Cheers
    Suresh

  2. Anonymous says:

    Anand,

    Though I know all this stuff as I have been part of your life for some time now…but this is an interesting read.
    I can recollect those chilling and shivering nights of december in Delhi when we used to visit such seminars.

    If you remember, I have also “wasted” my parents’ hardened 17000 Rs in MLM. Thanks to God I did not stick to it.

    And good that we “could” not continue MLM after marriage despite our efforts, as we din have money to spend extra 1500-2000 rs on the products every month.

    Once again Many thanks to God that we left it well in time coz it was creating a sense of dis-satisfaction. And what ever we are today is due to hardwork in our current Job. No Complaints abt that!!
    Am I correct?

    Cheers
    Anshu

  3. Loveleen says:

    Andy

    YOU ARE THE MAN!!:)

    I can so relate to you on this (and on may other things that i ve read in your previous posts)

    But this one holds special interets cos I recently encountered one such meeting.. not the first in my lifetime..but this being the recent..my angst over it is still fresh….I went only at the insistence (make it dogged persistence) of a dear friend..i knew what was coming but apparantly my dear friend had not been to any such meeting previously so he used adjectives like :phenomenal new idea”. “big time biz. opportunity” and the like…phew… (BTW this FIRMLY REASSERTED my funda in life..DIHKAWE PE MATT JAO..APNI AKAL LAGAO:p)

    i completely agree with you on the following:

    “There is nothing wrong about wanting to get rich, but what is wrong is this deep rooted desire to just go to bed one day and wake up a millionaire.”

    and this deep rooted sentiment of the middle class is what these companies hit hard upon…

    “The products are ridiculously expensive.”

    ALLWAAYYSS.. can you imagine what the company who approached me was selling?? numismatic GOLD coins (which one had to buy to get into the BUSINESS) with engraved pictures of sachin tendulkar, mata vaishno devi, mother teresa…etc. and each coin costs abt 31k..(tht s STARK RAVING MAD!!!)

    and tht s not all…one has to pay the shipping charges (somehwere around 2k)to get the coin COS IT S MADE ONLY IN ONE PART OF THE WORLD..BRITISH ISLES or something… (as if it s my problem… i mean what is the comapny giving me in return???)

    and then u have to get two referrals and each of ur referrals have to get two referrals..and so on.. but the worst part was..u get ur first cheque ONLY if u have six referrals under you (which would include the referrals gotten in by your two referrals) well..the catch here was I DONT GET ANYTHING INSPITE OF GETTING THE COMPANY TWO REFERRALS..WHILE THE COMPANY STANDS TO GAIN WITHOUT DOING ANYTHING… NOT TO MENTION THE USELESS GOLD COINS THEY ARE SELLING!!

    and let s not even talk about overheads..cos that these company-who–helps-u-become-a millionaire conveniently ignore these by saying u are only doing this while SOCIALISING with your friends..(once my friends realise me wanting to shove extremely expensive gold coins down their throats i d be left with no friends to socialise with..)

    You cannot do this “part-time”, MOST DEFINITELY NOT…

    It is made to looks as if some favor has been done on you by sharing this business with you. But believe me, it is *actually* exactly the opposite.

    SO VERY TRUE… if people buy this argument then it disappoints me cos no company ..and i mean NO COMPANY works towards the benefit of outsiders…which you are cos u are shelling out money to be a part of the company while the company is getting free agency services and getting paid for it too…..!!

    Selling soap OR ANYTHING ELSE FOR THAT MATTER is not what I want to do with my life.

    ….have a lot more fulfilling life, doing things that I like to do, and when I like to do them and as the Mc Donalds commercial (what a co-incidence!) says so succinctly…”I’m loving it!”.

    NOW IF ONLY PEOPLE WERE TO REALISE IT TOO…THAT MONEY AND WORK ARE ONLY A PART OF ONE ‘S LIFE..THEY ARE NOT LIFE!!!

    Extremely Miffed With Companies-that-pretend-to-help-you-become-a-millionaire
    Loveleen :):)

  4. Anonymous says:

    Hey Anand..

    This is so true… Even though i did not get hooked on to this, neither did i land up spending money on this (firstly because when i was studying did not have money for this and then when i landed up with my first job just after studies, i was too busy to get into anything like this).

    The very first encounter i had on network marketing was at Suresh Nair’s place… (this was while we were in college or somewhere that time… which did not materialise) but gave me lots of insight into this field.

    Last year when we moved to US and we did not know any one here, we were approached by couple of Indians in Walmart and Indian Grocery store, extending friendship. At first we thought that this was genuine attempt to become friends (as Indians in foreign land) and we landed up meeting one of them once also. After which i understood the business motive behind it and stopped interacting with them. In fact in one instance, 1 Network Marketing guy approached me and 5 mins later another person warned me of his motives and told me about how he went bothering him before and now us… 😦 😦

    Good to read your article creating awareness on this…

    Cheers!!!
    Vijay

  5. ~s~ says:

    hee hee.. i still remember the day you MLM-ed me. I attended you presentation but decided to stay away – you see selling wasn’t my cup of tea!

  6. Anand says:

    ~S~
    I’m glad that still I can call you my friend. πŸ™‚ I am surprised that tech-no-philes did not have any opinion on the iPhone?
    -infact I still have most of my friends intact.
    -anand

  7. Maayaavi says:

    Anand….

    I can sense how much of pain this MLM would have caused…..hmm….good and informative read…..it can serve as “MLM – An insider’s view ”

    Cheers
    Mayavi.

  8. rackgen says:

    Nice reading.. in fact I want to learn languages so that such “marketers” can be put off at first interaction.. so it goes like this:

    Marketer: Hello.. blah blah
    I: [In unusual language] Hello
    M: [oops!!] Do you speak [insert language here]
    I: [In unusual language] No
    M: Sorry [Leaves]

    End of story.

    No offense meant, I used Malayalam successfully. Now I am planning to learn Georgian/ Estonian and Swahili. πŸ™‚

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