Monday, December 15, 2008

Multi Level Marketing - what crap!

[Note: No flames please! This is more a discussion than a war for/against MLMs. So, any comments, if they are thought to be inappropriate by the blog owner, would be removed immediately.]

Imagine what would you do if you got a call from a girl whom you've spoken to over phone only once asking you if you wanted to make money at 1 am in the night when you are busy with your final project? I got such a call yesterday and started laughing as soon as I heard this question. But I was trying to be courteous and didn't really want to laugh before her. That girl thought I was interested and gave her phone to another guy (her senior partner) who again bunched out a total load of shit!

I asked him some simple questions and he broke into a sweat and gave me really stupid answers. Finally, I got totally pissed off and asked him what exactly did he call me for. Finally, this is what I could salvage from that discussion.

There is a site that combines social networking and ecommerce. He said that I had to register in a site of theirs(like orkut, facebook, etc) and ask all my friends to join too. And, say if I had put on my profile that I liked a movie like "The Dark Knight". If one of my friends sees it and wants to watch the movie, he/she clicks on the link. It opens a site of a seller(like Amazon) that is registered with their network. That site has dvds of Dark Knight for sale. It seems that I would get some money for initiating this deal. Since that girl brought me into the network, she would also get some money. The guy(the senior partner) introduced the girl to the network and hence he would get some money as well. I immediately understood that it was e-Amway. Even in the first conversation, I could find a number of problems;
1) Why the hell would I join the network and make a way to give money to others for my hardwork?
2) First, why the hell should I give money to join this network? Its not as if this network is already well known and I have profits joining it, right? The network is just being established and they should give money to people to join, right?
3) Also, why should I ask my friends to join this network and get products only through this network? Wouldn't it be like controlling them?
4) I'm a person who feels that buying unnecessarily is a waste. Most of my friends feel the same too. Would I, of all people, go and ask my friends to buy?
5) Further, isn't it wrong to use your friend's interests to make money off them? Where have the ethics of business world gone??

That guy mumbled something and gave the phone back to that girl who called me. I couldn't even tell her that she was getting into a spiral trap from where very less people have come out successfully. I told her I'm not interested in it. If the issue had stopped with it, this blog post would not have come at all. But, the call came again...

That guy had the nerve to call me again and talk about it. I asked him some simple questions like
1) what is the profit?
2) what is the rate of profit per hour?
3) how is the network supported?
4) who started this all?
5) is there someone reliable/trustable behind all this? (when I asked this question, that guy said that Microsoft, IBM and Comp arch are endorsing it. A simple Google search showed that Microsoft has explicitly stated that this business was just a customer of theirs and that they were not endorsing it! That showed this business's level of truth! Finally, when I asked him about it, he accepted that the big companies never supported them except as customers. Had I just accepted what he said, he would have continued his story of them endorsing this site!)
6) who are the sellers in this network? (there was not even one big seller. True! Amazon and Ebay are not stupid enough to support this method!!)
7) when does a person break even?

Sad to say, that guy was not able to answer any of them well. He sounded like a cult person who was taught to talk the same thing. When I tried to ask more about it, some of the answers that I got were:
"These are confidential. So we can't disclose it" (Oh! So they want my money but can't disclose what they are going to do with it??? what BS!)
"Join the network and you'll know it all" (Oh! Should I give money to know what your site is all about? What if it turns out to be BS? Do I get my money back? It reminded me of a saying in tamil "Paithiyam thelinja kalyanam nadakkum, Kalyanam nadantha paithiyam theliyum" (To get married, you need to be sane. To be sane, you need to get married). Both are not possible! Total Vidhandaavatham!!)
More questions about the business model made him ask my personal info (as if I would tell it to some unknown person! Mind you, the girl through whom this entire thing came was my friend's ex-girlfriend's friend. I haven't seen her at all! Then, what made them think that I would accept it all?)
I finally told that guy that I wasn't interested enough to join the network by paying for it and that guy got such a shock.
He said that he'll send me "convincing" material to change my mind. He even offered to come and meet me with his wife!! What nerve! Seriously!! How did he expect that I would accept such a request?

Coming to the point, I felt really sad for such people. If alone they could open their eyes and see, they would be able to see the holes in this system. However, googling for more info showed that people lose their minds to such MLM schemes in the aim to become rich and happy and important. There are better ways to achieve them than this junk MLM schemes. Wanting to become wealthy and happy is a good aim to have. But trying to get them without really working hard is akin to trying to cross the Pacific Ocean in a small dingy. Its not impossible but the probability is very very less.

If you are a person who is part of MLM, just think about your marketing system and see if you really "sell" products or buy them yourself to reach the target. Also, see if you are earning enough to atleast break even, if not make a profit. Further, think what would be your ROE if you spent the same amount of time, money and effort in some other business model/job. If you can sit alone(without pressure from others) and get these answers, do some self analysis. If you are happy with the answers, carry on with this life for you have the skill set needed in this system. If you are not happy, start looking at other alternatives too. For, after all, you are not there to build someone else's dream of social network + e-commerce site. Check if there are ways of building your dream. Because you have only one life! If you don't worry about your dreams, no one else will.

If you are a person who is pro-MLM, I welcome your views on it. For there might be something I have missed (for the guy who spoke to me might not have been a good-enough salesperson). You can help me see your viewpoint. I'm interested to really learn about it.

If you are a person who is anti-MLM, I welcome your views as well. I would like to know if there were any points I missed and should have considered. I'm sure that more the experience, the better and wider is a person's view of analyzing something. Adding the experiences of all of us, you and me, would make things clearer.

What is your view on MLMs? What do you think about the ethics and business longevity of this model?

[PS: I really didn't want to write this experience down, for there might be some who are happy with MLMs and I didn't want to hurt their sentiments. But there are two reasons for this post: First, if I can make even one person understand the good and bad reasons as to why they are in this system and chose it as part of their dream, it would be a good deed. And second, this is the first time I got to really check out a business model and find the good/bad in it without anyone's help. So, I would totally welcome any and all viewpoints related to it.]


Gireesh Subramaniam said...

MLM is a business model ?? Oooh.Not at all

first things first,you shouldn't have taken the call at 1 AM and put up all the Bull shit that he and she had to offer.

MLM doesnt work unless you join them in the very early stage.Plain and simple.

The simple logic is money cannot be created.If some one is earning in a system,it means someone else is putting money into that system and prolly losing it also.

As how i understand this,money collected from new members is the only notable input (no big company will want to join wid a not-so -popular marketing stream,so that inlet of money is non-existant).So if you join this the person who joined three levels (in terms of time of joining) will get his money back.

There are other versions of MLM though,brand building or direct sales.They are worth reading atleast.But then for that u need to have sales skills of Gates or chambers.In that case it is worth doing some thing more meaningful than this :)

There is positive thinking,there is opitimism and there is false hope.MLM comes under the third category.

Arun said...

didnt read the article fully, but the title sums up abt mlm :)
whenever mlm guy(its easy to identify them) asks for my number, i just say 911. they laugh and leave.

Rajaram Parantapa said...

Title says it all, waste of valuable time to even discuss.

Anonymous said...
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alpine path said...

Gireesh Subramaniam, pal, I wouldn't have taken the call had it been from an unknown number. And being a grad student, I was so vetti too :)
And I totally love that last statement of yours :D

Arun, good strategy! I didn't know that this friend(acquaintance?) was doing MLM stuff. Will follow yours next time around. But its so funny to hear them talk... and makes for a good "boring afternoon" entertainment ;)

Rajaram, Lol! True :)