I was once told that most recessions are self-fulfilling prophecies. People have a reflex reaction to the notion that the economy is turning downward, which tells them to hoard their money, and keeps them from investing. As a result of that lack of investment, the economy does, in fact, turn downward.
What we have today may not be the result of such a self-fulfilling prophecy. Its more likely to do with our, relatively new, idea of debt as a foundation for wealth — a house of increasingly fragile cards.
Nonetheless, the economy isn’t in great shape. I know 3 people in my orbit of life who have lost jobs due to layoffs or cut-backs. And others who’s jobs are becoming less and less worthwhile. The temptation, of course, is to find some alternate method of making money quickly. After all, we’re used to swiping a card and getting what we want, so why shouldn’t work come just as easily?
Now I’m treading carefully here, because I’m well aware that no one’s job these days is particularly safe, and if left jobless, I’m not sure to what lengths I would go to provide for my family. But there’s a trap in here, that I have to say at least a few words on:
A Multi-Level Marketing company is not a good way to make money. Just like the, now illegal, pyramid schemes of yesterday, an MLM business is one designed to abuse everyone except those at the highest levels of the “up line.”
Granted, some are better than others. There are a few with an actual decent product to sell, but most of the ones I’ve been “invited” to join market products with questionable value — and do so by design, since actual sale of a product is not the primary focus of the business.
Don’t know how to spot an MLM? Its really simple: if you went to a job interview at, say, McDonald’s, and the hiring manager not only offered you the job without question, but told you how you could make even more money if you brought two of your friends in to work under you, would you be suspicious? I would.
The only difference between a pyramid scheme and an MLM business is the product. For some, the product is unique and you might be willing to put up with the organization just to be able to obtain and share that product. That’s fine. However, to do so under the illusion that you’ll also have a sustainable business is very, very risky. The only way to move up in an MLM organization is to subjugate your friends — your “network.”
And not only is it necessary, in order to make money, to recruit your friends to start a “business” under yours, but its necessary for you to insist that your recruited friends recruit their own friends to do the same. The bigger the pyramid underneath you, the more money you’ll make. Similarily, the more people in your up-chain, the more money they are making off of you.
Once in college, my roommate and I simultaneously got a job interview. We put on our suits, and showed up… to a room full of other, similarly conned students. Not too surprisingly, we “got the job” with very little effort. And I was quite furious with my parents when they weren’t excited for me.
The company sold kitchen knives. Good knives — probably the best I’d ever seen. They cut circles around the knives I had in my kitchen, and I’m sure they were a very good product. After they demonstrated the product, they told us how the business works. There were perks, you see. It was commission only, so the more knives we sold, the more money we’d make. But there was also an “opportunity” to grow our own knife business. All we had to do was get our friends to sell knives for us! And for every seven friends we signed up, we’d get a free trip to Florida!
We found the “job” on a billboard at school, promising students “$30,000 a year in your spare time!” When both of our parents berated us for falling for it, we looked into it a bit further. The only people who made that kind of money were the people running these “group” interviews. Extending their “network” and their “down line” by suckering students who didn’t know any better.
Since then, there’ve been other “job offers.” One guy, in particular, preyed on students working at Future Shop (the Canadian Best Buy, where I worked while in school) telling them what great potential they had as businessmen. My roommate and I each fell for that dude once — even inviting each other to come to the meeting/interview.
What makes me mad isn’t the people who like a product for its merits, sell it to a few of their friends, and make a little money on the side from it. I’m pretty sure even my mom went to a Tupperware party or two. Its the people who understand how the business works, and prey on others, promising them a quick and easy solution to their money/career problems, when they know full-well that all their really doing is building a pyramid underneath themselves. The ethical problems with building a “business” this way are staggering — not to mention the social immorality of turning your friends and family into a “network.”
We all know that the economy isn’t great right now. A little bit of individual responsibility: avoiding debt and investing wisely could probably go a long way to fix that. But if you find yourself in a grim situation, that appears to have a too-good-to-be-true solution, ask yourself these questions:
- Does the chain-of-command above me look anything like a pyramid?
- Does this job reward me for recruiting my friends?
- If this product is so great, why isn’t it sold through the normal (and successful) retail chain?
And if you think its worth it anyway, cause the product is helpful to you, or you could use a little extra cash, at least read this article on MLMs (or this shorter one about how to spot an illegal MLM) and resolve not to subjugate anyone you know with your new business.