Why Multi-level Marketing Is Not Good

Multi-level marketing (MLM) is a marketing strategy in which the sales force is compensated not only for sales they personally generate, but also for the sales of others they recruit, creating a downline of distributors and a hierarchy of multiple levels of compensation. -Wikipedia

This strategy has been more known these days, especially in social networking where recruiters will tag several people showing the check payments they've received. They often invite us to join them. They want us to experience financial freedom where money works for them instead of trying hard to earn money. They will try their best to meet with us and talk to us. They want us to live a healthy and wealthy life, to take risks, and to trust the system that will bring instant money. I'm neither connected to those groups nor connected to those against them, but I want to point out things that are not really good with such kind of system.

It's true that we all want to be financially free, but this does not mean we want to take any path that will lead us into achieving it. This is regardless of what the state's law says. Is this in the first place the most important goal in our lives?

People who join these companies need to pay a fixed amount of money which usually include products and membership with access to trainings and other activities. Your recruiter has a share in that money you pay to the company. You earn profit when you're able sell these products (at a higher price). Are these products easy to sell? You are selling expensive products, products that are not really known by most people. If they are popular products available at drug stores, then most people will just buy from these stores. So it's how you market these items to people, and it will be challenging. What if you can't find potential buyers? Unlike in other marketing scheme, you can't simply return products that you were not able to sell. You have to sell them at a lower price or use that product which means you did not earn anything at all. That's perhaps what they call risk and they will tell us that we should not be afraid to face it and instead we should believe that we can do it.

So the key to achieve financial liberation lies in how you recruit people, knowing that you can earn commission from items they will sell (or buy from the company) or in their recruitment activities as well. It seems that they are using you to earn money or hiring you to do the work, but they are also "helping" you to join and experience this financial freedom. I'm against this kind of strategy because it creates a completely different view of how we see people. We begin to see people as means rather than ends, and we are spreading this kind of mindset. We begin to look at people, our friends, and family members as candidate members, as candidates that will help us earn more. The more you are successful, the happier your recruiters are, not only because you proved that they were not lying, but you helped them earn instant money.

Isn't it the case for all known businesses today? I don't think so. An owner of a salon sees people walking outside her establishment as potential customers. She wants to provide services for her customers. She needs to build relationships with her customers and to provide discounts for loyal customers. Her company's success means satisfaction for her customer. It's give and take. It's partnership between the owner and the customers. The owner helps them by providing the services, and the customers help the owner by giving her money. That's also one way to achieve financial liberation... without treating the people who gives you money as "slaves". Customers are in fact the master, and owners try to please them. But in MLM, it's completely different.

Perhaps they will say something like this to you: "Don't worry, you will soon be like one of us, just work hard, and recruit people". If we only think for ourselves and the money we are to acquire, it seems reasonable, but we know this entire system and company will only work if products are being sold which means some people should work hard to sell these products. These people will operate in an environment where competition is very tight, where each member of the family is selling the same product to friends and relatives who will one day be selling the same products as well.

Does money really work for us? We know in our hearts that money comes from the hard-earned money of other people. It's not the same when we invest in a bank or in a company where money worked for us. We deserve to share in whatever profit these institutions are earning, because they at first benefited from what we gave. This is not the same in the case of MLM. Do those recruiters deserve to take "their" share for an "undefined" amount of time? Isn't it that their purpose was to help us? Is it genuine assistance when somebody expects something in return before and after helping? Or is it taking advantage of you and your desire to be financially free? They are not risk takers. They have a chance of "getting back" the value of their money (at most, by using the products). True risk takers invest in something with a possibility of getting nothing back at all.

Immanuel Kant, a philosopher, believes that "actions are morally right in virtue of their motives, which must derive more from duty than from inclination", and he says that we should "act in such a way that you treat humanity, whether in your own person or in the person of another, always at the same time as an end and never simply as a means."