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(Case analysis Part 1)

In my yearly twenties I had a few years of experience dealing with not one but two multi-level marketing companies. Both companies to this day are involved with selling makeup and cosmetics. I will tell you plenty about both and explain why I have taken the decision to stand against such companies and their promises of the good life.

Feeding you lies

Looking back at what I have experienced as an MLM agent something which occurred with both companies is how frequently people are feeding you lies. They are beginning with how this is a job for everybody and how you can completely change your life an year from starting with the company. They even use semi-political slogans such as: “Be your own boss!” or “Become an independent business owner!” And nine-tenths of these people never had such an experience themselves. The recruitment process is often aggressive and it starts with the promises of how many things or accomplishments you are going to have if you sign up with the company. One such promotion is the annual top-ranking (usually called diamond) agents meeting on a famous beach resort or other beautiful place. At this point you are already sold. The explanation of the so called business strategy comes later.

 And it is far from being a “part time thing”. It may start as such but soon it transforms in you full-time job. Additionally you will be spending time on meetings with other members under the same teamleader.

Typical processes

 In both Oriflame Ltd. and AVON Ltd. the agents are often being reco-mmended to buy upfront products from the MLM companies and sell them later. Of course the products could be found on their brochures from which you can later order them using the identification number of each item. You may start only with the catalogs and try to build your network without purchasing goods but you end up doing it all the same. I don’t believe there is a single agent who hasn’t done it at least once.

 Apart from just giving away catalogs you have to actively groom potential friends and acquaintances to become new agents. Becoming somewhat successful with selling products via a brochure is impossible without being able to recruit for the company. Actually the real products of these companies are not the goods – men are. Men are those bringing the real profit for all those ruby-sapphire top agents who you might glimpse once in your run with an MLM firm.

Multi-level marketing is a pyramid that operates within the same rules as any other such scheme. Arguably it is even worse than some of the other Ponzi-schemes in which you might make money in the beginning or at least get paid a cut for recruiting. The people from the MLM companies argue that they don’t get paid a commission for bringing new agents. Supposedly a commission will be paid only to those who have brought so many that the sheer profit for the company will be enormous. Such people (the diamond agents) are between 0.1% and 1% of all the people involved in the business. An astonishing 85-90% of the agents are actually losing money. Of course such information is never disclosed upfront.

To read Part 2 follow the link:

Written by: Lyubomir S. Evtimov