3 Facts About MLM Business You Should Know

3 Facts About MLM Business You Should Know

You’re browsing through your favorite websites and there was never a day without coming across ads that claim to give you instant wealth if you join their scheme. It may be a doubtful feeling for you as you are well-established about these scams, however it may be different for the desperate.

MLM, an abbreviation for multi level marketing, is defined as a distribution-based binary system mlm which encourages independent distributors to sell products, ranging from beauty products to kitchenwares up to dietary supplements. What usually tempted people to join the MLM strategy is the low capital needed to be a part of the business. However, MLM has their own flaws.

Here are 5 facts about MLM business you should take note of when considering to join:

There Is A Legal Connection That Support Its Existence

MLM businesses are often connected to the pyramid scheme, except it prioritizes their products rather than building the team. Distributors recruit new members as their underlings of sorts to distribute the products; the income received will be split between the distributor and the new recruit. Technically speaking, the pyramid scheme is already illegal in nature due to the fact that the business model is dependent on the recruitment of newer members to make it work. So why is it that MLM still stands tall in the business industry when its relation to the pyramid scheme is close? In a sense, it is the MLM itself which makes the pyramid legal by covering up the illegal scheme.


binary system mlm

As mentioned before, the desperates who saw the ads would definitely be tempted to join for easy money, but the reality is not as beautiful. Despite the acknowledgement for those who are living a decent life, those who are naive and lower classes may fall down to a trap of the pyramid scheme thinking it can pay the bills. High school students are the most elementary as they learn not of finance but do know money as a general. Thus, they spend more fees to participate rather than receiving more for their end.

Uses Controversial Tactics, Even To Their Employees

Most MLM businesses practiced psychologically manipulative tactics for new recruits, such as social isolation. A former employee of Amway was distant from his family due to his involvement with the business often sending him out for seminars, asks him to make purchase of books, tapes and many more which takes his time away from spending with his loved ones, to the point where he was brainwashed to lean more on his colleagues or those who work at Amway as the only group of people he could trust and not the ones at home. It is financially and emotionally draining and stressful for those working in the MLM industry, even as far as putting a strain to their relationships. Also, it dries out the employee’s income for their own sales and profit.


Honorable mentions of MLM business in Malaysia are Cosway, Amway, DXN and Chini Enterprise.