Why You Should Think Twice Before Joining A Multi-Level Marketing Company
Mar 6, 2020 • Andy Lim
Acertain multi-level marketing has been trending online after David Villanueva, one of their most prominent members, took to Facebook last March 2, 2020 to expose how he hasn’t been paid by the company for months. This issue even brought him all the way to Raffy Tulfo in Action, which just sparked more reactions from netizens.
https://www.youtube.com/watch?v=MWSHlWkL02U
There are actually numerous MLM companies in the Philippines. While plenty of Pinoys are heavily involved in the MLM industry, a lot of Pinoys remain skeptical about them. Regardless of which side of the spectrum you’re part of, you should know the reasons why you should be cautious when considering joining multi-level marketing companies.
You have no control over what you sell
In the sales industry, the belief in your product lets you easily market it to your customers. But what if you have no say in what you’re selling? You won’t be able to give your input about the product, from the contents to the labeling to the branding to the costs. Whatever product the company has, that’s what you have to market out there. Just look at Dave Villanueva — he’s using his product, but his own fellow members don’t actually believe it works on him.
Dinisprove niya sarili niyang produkto hahaha pic.twitter.com/aBQRvUnqJl
— AltABSCBN (@AltABSCBN) March 2, 2020
You might think you’re the boss, but you’re not
MLM companies are tempting primarily because, to quote their spiels, you become “your own boss”. You’re not tied to a 9-to-5 schedule, and you’re holding your own time. But in reality, you don’t control anything except your time. You sell what the company makes you sell. You’re required to follow the price point the company gives. You might even need to work odd hours just to reach your required quota. In reality, you’re only a sales agent, unsalaried but still working overtime.
An MLM company may tell you, “Here’s our product. Sell it and we’ll give you some money in exchange. Oh, and here are the best ways to sell them,” and that’s essentially how a sales agent works. Again, you’re not the boss here, even if you like to think you are.
When you’re told to recruit, not sell products, someone always loses
But what they don’t tell you is that, mauubusan ka ng irerefer. If it is really a legitimate business, hindi yan magsasara. What they they solemnly focus on is inviting. Parang nagsayang ka lang ng pera na binigay mo sa kanila. pic.twitter.com/5n2cR5GCPA
— Jushira (@Jushira1) March 3, 2020
This isn’t the case for all MLM companies, but too many of them place more value on recruiting more people rather than selling the actual product. When a company earns most of its money from how many people are “buying in” to the company, that’s a red flag. That means that the people at the top are earning most of the money, while someone at the bottom is bound to lose.
No financial stability
MLM all depends on how many people you’ve recruited this month and how many products you’ve sold this week, and so on and so forth. There are so many variables to consider when your earnings are being computed that your checks would probably fluctuate from lows to highs. And you’d soon realize there’s no financial stability, that is, unless you work yourself to the bones. Just like Villanueva.
You might not even get any real earnings
— AltABSCBN (@AltABSCBN) March 2, 2020
When Villanueva outed the said MLM company, he brought receipts. One of his Facebook posts revealed that the company allegedly owes him checks as far back as October 2019 (that’s six months ago!). So take this as a story of warning — you might not even earn anything when you join an MLM company.
It’s all a front
The MLM company in question is actually big enough that they’re able to secure partnerships with huge organizations like Miss Universe Philippines and huge entertainment companies. But if agents like Villanueva haven’t been paid for months, what does that mean? His checks, even if they’re under his name, are being withheld by the company. And he owns neither of his two luxury cars (a Mustang and a Montero!), because neither are under his name on paper. The MLM company’s testimonials claim that they’re earning a lot of money, but it looks like the only people who know the actual numbers are the ones at the top of the company, and no one else.
There’s probably a lot hidden in the fine print
As with most business transactions, you’d need to sign a contract, terms and conditions — whatever they may call it, this is the document that ties you to the company, and it’s what they’re going to throw at your face when you file any complaints. If you’ve signed something and you’re not familiar with the law or even just legal jargon, you’re already in danger.
Just be careful
Of course, all this shouldn’t be taken as a generalization for all multi-level marketing companies. Some of them have been successful and are actually returning investments to their members. But at the end of the day, you should just think carefully and analyze the whole situation before signing anything. It’s your life you might be signing away.
What do you think of these reasons why you avoid multi-level marketing? Do you agree? Tell us below!
