MLM Is Not A Real Business

Posted by | April 21, 2010 | General | 33 Comments

I know, some of you will probably hate me for saying it, but I’ve been wanting to say it for such a ling time: MLM is Not A Real Business.

I’ve been in a few MLM programs before I decided to quit it permanently, so I know a thing about two about the hype and the half-truths they tell you in MLM. I’m sure the basic message hasn’t changed in a while.

Your MLM “leader” or “upline” will tell you “This is your own business” or that “You are your own boss”. They will also tell you that you should “Leverage on other people’s time and money” so that you can build “residual income”.

Sure, you can make a lot of money in MLM, regardless of the fact that most people don’t. That is a fact of life, and its the same in Internet marketing or anything that requires effort.

Sure, it does leverage other people. Sure, it does create at least some kind of residual income. Sure, it is a business that is better than most.

I have no issues with most of the statements, except one: “This is your own business”.

Nope, you are more like a highly paid sales person or agent. You are in control of what you do, but it is NOT your own business.

Think about it. If your MLM program was your own business, than you should be able to:

  • Move to a different upline if you’re not 100% satisfied with yours
  • Move your entire downline or team to a different company if you want
  • Create your own marketing plan instead of following a system
  • Make suggestions on product development and improvement
  • Cross-sell products and services from other manufacturers
  • Advertise your business directly if you need more sales
  • and much more.

But you can’t do those things in MLM now, can you?

It is true that it is “up to you” whether you want to do anything at all in MLM, but isn’t that the same case with anything else? We have more choices than we believe.

So tell me: Is it your own business? Or is it a glorified sales job disguised as one?

33 Comments

  • [...] Sounds great at first, but after a few minutes with the MLM guy you realize that he’s actually trying to recruit you into his MLM business. [...]

  • Como Ganhar Dinheiro na Internet says:

    Hi
    I would like to thank this post with MLM, it really was very important for my pretensions to my business
    I will become reader of your blog, thanks
    Thiago Santos

  • NT says:

    Every business have 2 sides, Chinese named Ying Yang, Common says “Male & FeMale”. MLM got 2 type: 1st type NO NEED SELL PRODUCTS = PURE MONEY GAMES (Suruh Orang Mati Kudasai) 2nd type SELLING PRODUCTS = BUSINESS (CAN SURVIVE-LAH). The positive element of MLM is Network. All Millionaires make million by network. So if you can maintain your network then you will success. Business is realistic. When you win, people named you “God” but if you loss, people named “God D U”. Stay with your choice of business in at least 5 years time then only you decide to choose another one. So beware to your first choice! MLM is just a choice. You must have your own choice. If you follow K. Gobala, at least 5 years you followlah…if you choose MLM then don’t change company in 5 years lah…Anyway Good Luck buddy!

  • Nazree Hakim says:

    I don’t know why so many Internet Marketer go against MLM…
    I don’t know why Internet Marketer always bring this issue up…
    Is it because they’ve tried MLM before and failed…??
    or is it because IMer really annoyed with the MLMer…??

    I think true business person shouldn’t go against or give a negative respond to any type of businesses…
    Maybe the business type doesn’t fit you, but it might fit others…
    If it doesn’t fit you, doesn’t mean it is not a real business…

    I know they are many MLMer that inappropriately promoting the product and business opportunities…
    BUT, it is the same with spammers and scammers in Internet Marketing…
    Not all IMer are really doing their own business…
    If you strongly saying MLM is not “your own business”, then it will be the same for those IMer that selling other people’s product (Affiliate Marketing). They’re not actually selling their own product, but the business owner’s product. (e.g: promoting and selling other people’s ebooks)
    Thus, both IM and MLM are the same…

    I know this post of yours is your own opinion…
    But people who actually want to know about MLM might got the wrong idea
    if they read this post…
    Thus for me, the post is quite offensive…

    About “don’t do MLM” for students, the real fact is the student actually is the real problem…
    By joining MLM, they should be committed to do business…
    But instead, too many students want to join MLM because of the money itself only rather than learning about business…
    So be sure to give a better advise to the student…

    IM and MLM both are the same…
    No point to condemn about any one of them because it will just reflect back to the other…

    • If you say affiliate marketing is the same as MLM, go ask your upline if you can promote products from another MLM company. I wonder what the answer will be? I rather deal with spammers than annoying MLM recruiters.

      • Nazree Hakim says:

        Well, it’s simple actually…
        Sure I can promote other MLM company’s product…
        I’ll just join the other MLM company, and start promoting…
        It’s not illegal…It’s just that in MLM, this way will cause lack of focus…

        And I’m not saying both affiliate marketing & MLM are ENTIRELY the same…
        But the principle is the same; selling other people’s product…
        What I can say is, to succeed in MLM, the person should stay focus on one company…to succeed in affiliate marketing, the person should sell more products from more companies,persons or parties…
        Different techniques, different strategies, different structures, yet same principle…

        And you said you’d rather deal with spammers than ANNOYING MLM recruiters…
        Well, for me, I think that is the only reason why you want to post this topic at first place…
        Sure they are MLM recruiters don’t know how to approach prospects…
        Even leaders in MLM doesn’t like that kind of recruiters…
        But it doesn’t mean the MLM itself is not a real business…

        • Suthan M says:

          Nothing personal dude, just want to voice out a healthy discussion here..

          When we talk about business, one of the core concept is that its supposed to be sustainable.. and MLM is just a total opposite of that with its matrix system.

          Next is the fact, that the main part of many MLM is to “recruit others” for the sake of profit of the recruiter (directly or indirectly) not per se for the benefit of the person being recruited and in most cases, this helpess guys wont even know until they are in the trap (and their way out is only for them to re-start the cycle). Now, aren’t busines supposed to be a win win situation for all where good business practices are cultivated..

          Talking about good business practices, most MLM companies practices shady marketing systems, one of it is the “come for the event or get a free gift” scheme where you are coaxed to sit for 2 hour long previews that you never wanted to begin with.. Thats just one , and i can go on.. but i think everyone gets the drift here..

          Sigh, MLM? in 2010 sumore ?

          Not my cup of tea for sure..

          • Nazree Hakim says:

            Based on success stories about MLM, uplines will gain their success by helping their downline towards success, means by working together.
            That is why follow up in MLM is a must.
            So the business actually is a win win situation.

            True, most “MLM” companies practices shady marketing system because they aren’t really practicing MLM system or I might say they aren’t even really a MLM company.
            That is why choosing a right MLM company is very crucial.
            But many students can’t think straight when they’ve been promised with a huge amount of bonuses…their judgment won’t be at their best.

            To add more, to be in MLM business doesn’t mean we have to stick with it for the rest of our lives.
            But in MLM, we can actually learn many skills about business in ways that we can’t learn by reading books.
            When we gain a great success with MLM, we actually have learned many things about business…
            Thus, with those knowledge and experiences, we can apply it well enough to our own business.

            MLM is like a business school that teach us about business and people.

  • Eldy says:

    I want to say yes, MLM is your own business. Some people hate the pyramid but tell you what, that exist since this world was found xD Try to think from CEO > managers > workers > cleaners are these pyramid ? yes ! cleaners never been paid greater than the ceo..

    MLM give out a chance, everyone is able to be the CEO =)

  • Ammar Zahar says:

    For me, this topic will be never ending debate.. ;)

  • Michael says:

    The MLM company itself is a business. All the agents under the company’s network are just working for that business.

    The real business owner who have shares in the company can do whatever decision they want with their company. They can cut your commission, bonus, or cancel the year-end trip that they promised earlier.. and you as a sales agent, no matter how many downline you have, can’t do anything about it.

    The fact is, the whole MLM network is just a money making machine for the MLM company’s owner. When you work hard to expand your network and sell a lot of their products that make you millions of dollars, the company’s owner is doing nothing and earn a lot more from your hard work.

    MLM is a business.. only for those who really own the company.

  • Bob says:

    There are many types of businesses & because of this, businesses are classified in many ways. I’m agreed with your points, but the title for this post unsuitable.

    Sold firearms, woman or drug it still called business.. though not actual business :P

    Personally why I’m not interested to MLM? The big reason is “coercion” from some leader. They will push you until you buy or sell or die.

  • Nazree Hakim says:

    From the statement “Your MLM leader or upline will tell you “This is your own business” or that “You are your own boss” “, what I can tell is those leaders are the people that said “this is your own business”. Not the MLM itself.

    The MLM itself is “Multi-Level Marketing”. So obviously it’s more about marketing. And as we all know, the marketing is one of the key to business success.
    Claiming the MLM is “your own business” is quite exaggerating for me. However, the distributors can promote the products as of their owns.

    The MLM company offers a system for distributor to start a business with low capital.
    It’s little bit like franchise but with lower capital.
    Or I might say, it is like affiliate marketing but with higher profits and a great network can be built.

    To summarize all, I think the leaders or upline are too heavily claiming the “This is your own business”. The statement might be very questionable.
    However the real MLM company really do want the distributors to promote the products and business opportunities as of their own businesses.
    MLM really teach people about handling rejections, promoting products, finding networks and etc.
    So in my own words for myself, I would say MLM is more like “your own pre-business”. Might sound weird but the MLM really prepare the distributors to the world of business.
    After having a great success with MLM, the person can then building their own business with the skills and knowledge they’ve learned and experienced from the MLM.

    This article might be true regarding of some aspects. But the title “MLM Is Not A Real Business” that you claim is unacceptable and too much.
    If MLM is not a real business, then what do we call those who are actually became milionaires from MLM?

    If MLM is not a real business, what should we call for the promoting and selling products of the MLM companies?

    If MLM is not a real business, what should we call the consumers that actually bought many products from MLM companies?

    If MLM is not a real business, then I might say the same about internet business or IM (Internet Marketing) which is not so different from MLM (Multi-Level Marketing). Both do marketing for better chances of success.

    So you might as well change the title with something more appropriate.
    Thank you.

  • fadzlihani says:

    Morning Gobala,
    I am not realy like your statement that MLM IS NOT A REAL BUSINESS! If you have past experience failing in MLM, don’t blame this industry, please!
    I have experience failing in IM, even after buying Rahsia Clickbank you co-authored with zamri Nanyan. But i never called IM IS NOT AREAL BUSINESS!
    Be wise and be compassionate! To your success!

  • Positive Thinker says:

    It’s up to you to choose whether to build your own business or to join ‘ready made business’ such as MLM……If you think you can make more money with MLM, why not??
    Think of these:
    1. If you start your own business from scratch, you have to think of many aspects – products/services, marketing, capital, higher risk etc.
    2. If you with MLM – ready products, small amount of capital, marketing (same as own business), lower risk etc.
    Positive Thinking…

  • Kay Kastum says:

    I was in MLM before too. It was not really for me in the end but I must say I learned a lot of great Wisdom which can be applied in my wonderful life.

  • Great post bro Gobala! In Singapore , there are quite a number of MLM companies . Dont know how true it is whether most millionaires come MLM companies. Or is it just an opinion? Let people decide and ponder over.

  • Herwan says:

    people fail to really say so … try to ask the people who succeed in MLM …. what they said …

  • Sofyan says:

    Mlm,Franchise,Affiliates,Real Estate Agent,Insurance Agent,Direct Seller fall in one category which we use the company name ,product or service to promote and create income. According to wikipedia A business (also called a company, enterprise or firm) is a legally recognized organization designed to provide goods and/or services to consumers. Robert Kiyosaki mention that MLM is business school. At the end of the day is up to you to recognize a genuine opportunity or create one for others. Thank You and have a nice day…I love the InterNet

  • Fariq Hamdan says:

    MLM really appeals to many people coz most company now uses famous ambassadors fo their image, and the company projects their offices as posh and high status, also the biz is a no brainer, just get the prospect to the talks and office as to impress them. Same tactics over and over again. 90% would give up in a short time, and only the highest upline stays. Fact is, they make it sound really easy to get rich. I heard a famous marketeer said ” The best prospect is the ones who have ‘irrational passion’ “

  • Seng Kok Meng says:

    In this world 10/90 rule always applies. In the internet marketing world you belongs to the 10 percent group.

    In MLM, you belongs to the 90 group. You may have achieve something in your life with your current choosen path and I congratulate you for your success.

    I made my first million in MLM in a time where everyone else is saying “MLM is not going to work” and that was back in 1997 during the Asian financial crisis. Elken is just started and its nobody in Malaysia MLM scene. It was seen as no match to the giant Amway back then. Today Elken is number one in the Malaysia and its 100% local made. It has made Malaysia proud internationally just like what you did for Malaysia in the Internet marketing scene.

    Young man, don’t always look back on your previous failure unless it serve as a lesson to you. There is no failure but only life lessons to be learnt. Be grateful for those lessons as they made us stronger – aren’t they?

    Seng Kok Meng
    Elken Malaysia

  • daream says:

    Hello friends, I think here we are group of internet marketing interested party, so comment on MLM is not neutral and biased.
    MLM business has been long debated over 50 years. Let the authorities decide whether it is real business. For sure, it is selling real physical product and had companies registered. The distributors are also need to register in company and pay tax.
    Compare to IM, it is selling info product which can be use manually copy and paste, edit or use software to spin and automate many tasks, so almost 100% profit. Unlike MLM, the profit usually is few %, not even easy cover the bus fair.
    So it is up to individual think which is more real business. If you guy said MLM is not so profitable business I am agree. To success, it has to go many level up, so who said MLM is get rich quick scheme? IM is rieal quicker if you know how and can duplicate same formulae use by the IM guru. However, IM is still rather new still have many potential , not like the old MLM. Today work model doesn’t mean it will work forever. But at least MLM is still have half decade long.
    Wish you all the success in IM or MLM

  • T Muhammad Safwan says:

    Damn…………………………………………….you are RIGHT : )

  • Karl cardoza says:

    I have to agree with gobala…..

    Most mlm companies really take you my the neck…..

    Alot of them do no allow you to advertise(but i’ve been seeing amway ads on tv now)

    only allows you to be a part of 1 company… if they find out your are doing another they terminate your account…

    Even though you have a $10,000 commission you still need to sell and sell and sell…..

    I think the best way to evaluate a business that you are thinking about join is to see if there is some way to automate the system Where revenue will come in residually and also most importantly “Do you have to recruit people every month”

    Automation automation automation – The key to any business

  • Only LHDN or a tax agent can verify the “fact” of MLM millionaires. Everything else is you hear is not a necessarily a fact. You just choose to believe it. They could have made their millions somewhere else.

  • JohanMasran says:

    Thanks for your sincere comments on MLM…

    People might have different thinking over the same issue…there are pros and cons…. and I would not be surprised if the same thinking goes towards online business that only selling empty ‘hopes’ to know nothing ordinary joe..
    Same as most MLM companies did to trap greedy mindset people to get rich quick by false and hype evidences.

    For me, be fair when saying….yes MLM agents is not a genuine entrepreneurs…but its groomed ordinary hopeless broke laymen to rich cash millionaires more than other type of business do, and that’s the fact!

  • fred says:

    I agree wt Mr Gobala’s statement, that MLM can make a lot of money but not really your own business. But nowadays, you need to look the opportunity in front of you which is more on joining/supporting others’ business whether it’s MLM or franchaisee, reseller etc… it’s everywhere…for example Jambu88, very successful nowadays…and to add, most of milionaires come from MLM company….

    In my point of view, MLM probably NOT A REAL BUSINESS BUT REAL MONEY !

  • Absolutely agree. You got guts for saying it. I will not say it because its a waste of time to argue with so many people who have a different point of view.

  • Rayman says:

    Gobala, in my business forum (classifieds), almost every day there is a new topic on eCosway stokist, the “newest” & “hottest” MLM supposedly, in malaysia right now. They usually disguise under the term “franchise”. They are actually not franchise at all (i hv checked with ROF & MFA). They are pure MLM.

    Also i would say almost 20-30% of all topics every day are related to “make money online” under new MLM scheme very similar to get-rich-quick scheme. These MLM people are really annoying.

    I am beginning to fell the same to affiliate advertisers too. Their free ads are overwhelming & boring & selfish.

  • Suthan says:

    Well, all this years i have been advocating “dont do MLM” to my students, and I am really really glad that you are also speaking against it..

    I have a problem about MLM, and the core problem I face with it is that its just “fluff and selling dream” kind of business..

    So many MLMs are scammers.. Selling usual $20 detergent for 90bucks and then calling it “profit sharing”..

    • Suthan, I totally agree. But we cannot deny that the MLM industry in Malaysia is only going to grow bigger with time. I guess it will always appeal to some people.

  • Abdul Rahman says:

    My favourite copywriter, The Prince of Print said the same thing.

    In his word, Multi-Level Marketing Is Always Stupid!

    RIP Gary.
    http://www.thegaryhalbertletter.com/Newsletters/zdla_multi_level_marketing.htm

My 6-Month Intensive Personal Coaching is Now LIVE! More Info