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MLM - Pyramid Schemes

August 16, 2016

 

 

When I was 22, I got a call about an "opportunity" for an entry-level "management"  position in the "healthcare" industry.  (sorry for all the "quotes"  you'll see why they're there in a minute.)

 

I was a recent college grad with a degree in English.  I was thrilled to have an opportunity to show what I was made of.  Still, I was curious how they got my name.  The man on the phone said I'd been recommended by my friend Mike.  (I'm leaving out the last name, because I'm sure he'd be embarrassed if he knew I was posting this story. In fact, I had better call him.)  Well, at the time, I didn't call him then to thank him for the recommendation.  I was too excited and focused on my opportunity!

 

I showed up at the interview in a suit.  I saw an entire room full of men and women in suits and a handful of younger people in khakis and sweaters talking and mingling.  Wow!  I had hit the big time!  Almost immediately, 2 men in suits approached me and took great interest in me--asking me all kinds of questions.  We talked about school, hockey, and other common interests.  I actually did most of the talking.  I didn't think to ask them about themselves.  I was too busy trying to look stylish and interesting for the interview.

Soon the whole room was invited to sit and watch a movie.  I noticed as they dimmed the lights that all of the people in suits removed their blazers.  Odd.  The movie presented culture-changing trends that had defined generations.  The Microwave helping save time to manage your life, the VCR improving home entertainment, and now in the year 2000 the new trend was capturing the secrets of youth to protect your health and increase your lifespan; now as the time for selling vitamins.  Everyone needs vitamins, but this company had the "new, research-backed, "break-through" formula.

 

 

This was exciting !  I was going to be managing a sales team!

 

 

 

 

however, when the lights came back on, I found they were actually trying to sell the vitamins to me.  I was going to have to spend $150 each month for these vitamins.  This was an opportunity to improve my health.  Problem was I wasn't looking for vitamins.  I was looking for a job.  My income was $0.  Fortunately, I wouldn't have to spend a dime if I could get 4 other people to buy in.  In fact, I would make money off those sales and any sales they made.  

 

Wow!  It sounded like I was already in charge of hiring!

 

In reality, these people were using peer pressure and authoritative influencing techniques to hijack my personal relationships to sell their vitamins.  They wanted to buy my influence.  They said the same thing to Mike.  They gained my trust through my friend.  

 

The structure of this business was what they call Multi-level Marketing --or a pyramid scheme.  I was getting in on the bottom of the pyramid, but could quickly be in the middle by getting more people below me.

 


It's called a pyramid scheme because the person on top receives the maximum benefit by a taking a percentage of every person who is paying in.  When people say Multi-level Marketing (or MLM), most people who are familiar with the term running away screaming.

Why?  Because of the story I just told.

 

However, groups like Amway and Mary Kay have been around for over 80 years.  There must be some good in them, right?

Right.

 

The "Good" lies in the value.  If you value

     1. product you're selling,

     2. product focused parties--catered by the host : ) , and

 

     3. working evenings and weekends, then you may LOVE a job selling jewelry [or "insert product here"] to people who appreciate jewelry [Product] as much as you do.  usually the problems and complaints for these types of businesses are around licensing fees or having to working a lot of hours to make a living wage.  However, some people make it work.  And those people typically enjoy it--everything about it: the prep, the travel, the unpredictability, and the flexible schedule--even if it is a lot of time.

 

MLM was not what I was looking for at that time.  And if I were, there's no way I would have ever chosen to work for that company.  Because

     1.  They were horrible bullies.  

     2. They were dishonest--using bait and switch tactics  (come for an interview, buy into an opportunity),

     3. I don't really care about vitamin supplements.  (I choose to get my vitamins through eating a varied diet full of fruits and vegetables)

 

I had zero dollars to invest and needed steady income.  So I went the safe route of finding a job at a stable large company that paid me a steady wage for my time.   Steady hours, steady pay, predictable work pattern.  After 2 years I knew what every day looked like : commute, work, Lunch, work, commute, TV, bed, repeat.  It's what I like to call: Security.

 

And I had maximum security.

 

 

 

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