Questions

Do you agree with multi level marketing business?

I am very interested to know whether you accept MLM business or not since I am going to run my business using MLM software.

3answers

As a consumer, I'm a big fan of disintermediation as a business model. I can buy a mattress for under $1000 that would have cost 3-5x that because of companies like Casper and Leesa. I'm not paying for a bloated, unnecessary supply chain to get it to me.

MLM introduces more hungry mouths to feed by the nature of it's business model. Where is that profit comings from? Three possibilities

1. Nowhere - the company is operating at a loss
2. The consumer - paying far more than they would for an identical good to support the passive income lifestyle used in recruiting materials
3. Failed distributors. There are pyramid scheme investigations for huge MLM companies making in some cases under 20% of profits from 'non-distributors' ie real customers.

I'm not in favor of any of those so I do not agree with multi level marketing business. Not here to make an ethical argument, it just doesn't add up from an economic perspective.


Answered 4 years ago

Hey!

Short answer: MLM marketing is about the products and payouts. Do your research in the company before you invest. All MLMs are not created equal.

I hope this helps.


Answered 4 years ago

What's frowned upon is not the growth model but that business model. Do you make money signing up people for bogus products only to have them push for signing up more people and get commission?

That's a shady MLM. An MLM that hires with that process but does so for tangible products, non commission enrolling, and actually makes 80% or more off the sales of products or services is nothing to be ashamed of.


Answered 4 years ago

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