My Experience Participating in MLM Businesses

in LeoFinance3 years ago

First of all I want to say that this post is NOT to invite anyone to this kind of business, actually I’m not longer involved in them. I want to share my experience, what can be rescued and the negative things. I first participated on one of these companies back in 2008, I already knew about them but I had never participated in one. For those of you that don’t know or may have a misconception of this I’m going to make a brief explanation.

What is an MLM or Multi Level Marketing Company

MLM is a category inside “Direct Selling” business, this means that a product or a service goes directly from the company to the client without middlemen, well sort of. The promotion is done by word of mouth and that enables regular people to gain part of the winnings of the products and services by selling products and also by making a network of people that can also sell. In theory is a great system, in practice it’s very complicated.

There is a thin line between a legal MLM or Direct Selling company and a pyramid scheme. Believe me, I’ve seen it first hand. But how can you tell the difference? Here are some points:

Legit Network Marketing Companies

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Real and legal Opportunities must have real people and real consumers.

On a legit MLM company there should always be a unique high quality product that even though it could be expensive, it should have notable results and a huge demand by consumers. In order to be effective the network should have more consumers than people selling or making business. Consumers should be at least 60 or 70% of all the people involved in the company.

Legal MLM business are regulated by the government and if they have dietary supplements or health products they have to follow guidelines set by the FDA.


Ponzi Schemes or MLMs Scams

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Graphic example of a Ponzi scheme

On a pyramid scheme sometimes you don’t have a product. Many times it’s just a service or cheap product that is used only as an excuse for people to invest money. At the end that money is recycled on the network and the ones on top are the only ones who benefited before the “business” collapses.

An illegal scheme promotes only the business and the idea to get-rich-quick. These type of schemes pay influencers to promote their business, and they show a lifestyle that is dreamt by many. Well this practices can also happen in some MLM business, that's why I say there is a thin line.


I’m not here to defend or recommend this type of business, everyone can make their own research and determine if they are good or not. And even if they are legit not all people will like this type of activity. Sometimes MLM's promoters are seen as pushy bible sellers. I’m not longer directly participating on an MLM company, but my mom is and my wife just purchase a beauty kit from a company, she may sell their products if they work on, and if she builds a testimony.


My personal experience

Sharing some photos of our Convention Trips.

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My mom and me outside the 4Life corporate offices located in Sandy Utah.

The first company that I participated in is called 4Life (my mom is still active there), this is the typical MLM company based in Utah and founded by Mormons. 4Life has health products that are mainly focused on the strengthening immune system, of course you cannot say that because it’s not a medicine, but they have worked for as we rarely get sick in the family.

What I liked about 4Life is that I did not have to buy a huge inventory each month to be active, I just needed to buy what I was going to consume, the monthly investment was about 100 dollars or fewer. It’s still a significant amount but if we compare this to Herbalife or other companies where you need to buy and sell dozens of products it was a very good deal.

To be honest I never personally had good results in this kind of business as I would have to invite a lot of people to be able to find at least four good leaders that followed my example. I was young and no one believed in me. The city where I live at the moment and where I worked this opportunity doesn’t have a lot of money so it was difficult to find someone to invest in this. Also people did not believe in the product or opportunity as they have been deceived before.

My mom in the other hand was able to build a network of people. I think that at one point she had more than 500 people below her, and she was one of the leaders in the city. She travelled to conventions outside of Mexico and won trips to the beach. Sometimes I went with her and that was a fantastic opportunity. We went twice to the USA and one time to Colombia.

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Here we are with 4Life's director in Mexico (right) and one of the top leaders in the region.

I learned a lot of personal growth and I learned how to sell an idea. One of the most important things that I learned is the power of passive income and compound interest. I learned that it’s better to build something for myself that work for other’s people dreams. I also learned that 95% of traditional business fail in the first few years but I also learned that only 3% of the people are successful in Network Marketing, I think this may also apply to other industries. And when I say successful is that they become rich and achieve that longed for financial freedom. And of course that wasn’t my case but my mom can still increase her income there.

Something that is promoted on this type of Business is the freedom. Freedom of time and freedom of money. By observing the leaders of the company I understood something. They might earn a lot of money and have good cars, fancy houses and travel the world, but at the end they are slaves of their business. Each month they have to reach some goals in order to cash that precious check. They have to buy their products, have a certain amount of people directly invited by them to do the same and from then they have to reach some volumes in sales in their first three levels and on the organization. Their rank and their check depend on the people below them, they also have to achieve some goals.

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With the Marketing VP of that time (2015).

I never went through the experience of having to qualify for a rank on the top of the company, but for what I saw it was something very stressful specially on the last days of the month. I also saw that big leaders were always traveling and sometimes they traveled to different countries, so they could be able to give presentations and train their “down lines” (the people below them).

I was involved in a couple of other companies with slightly different concepts but it was the same stories. On one of them I was able to win around 400 dollars on my first month but many things happened and I had to quit at the third month. The last company where I tried to do something like this ended up being a Ponzi scheme, or at least it was not a sustainable business. That company was an Academy for traders and it taught how to make money on the Forex world and also Crypto. At the end this was something good because by learning in this company I found STEEM and Steemit.com and I began my journey here.

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These guys are the scientists behind the 4Life products.

I personally think that MLM business have a bad name. A lot of people don’t know the difference between a legal and illegal business. And even a legal business can become sketchy if the people that invite you make unrealistic promises. I was tired of trying to change people’s mind so that was one of the reasons I stopped promoting this type of businesses.

I have seen both sides of the coin, and I am happier creating content on HIVE. Here I have had great results and I have found my niche, my audience and my purpose. I still have the idea to help my mom to increase here network by placing ads on Social Media and if my wife decides to promote the beauty products she will have my support but my focus will be here on Hive and Leo. I’m not an enemy of having several income streams, that’s also something good I learn on MLM.

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This is Danny Lee, at the moment he is the CEO of 4Life.

So what do you think?

Have you ever participated in an MLM?

Do you think all MLMs are pyramid schemes?

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A little bit unrelated, but did you ever watch the TV series called 'on becoming a god in central Florida'?

So good haha.

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Wow! I haven't seen it but it looks good! It's like Amway or something similar hahaha. I think this shows the most negative side of this industry.

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A little bit unrelated

aka fully 100% related lol.

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I haven't seen this series but it looks like The Wolf of Wall Street MLM version! It may seem a little exaggerated on the trailer but believe me, some people can be this fanatic and sometimes it can become a sect.

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All the events are full of emotion and that is not necessarily bad, but it can be a little awkward if someone is not in the same mood.

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I joined a MLM company before around 2017. I invested time and money but did not receive any rewards. Maybe I am not that good on recruiting people who knows?

I haven't used the product as it was a travel and tours business. When I tried to add a credit on my system, I wasn't able to receive assistance from their customer support team. Even my recruiter "upline" doesn't know how to create one.

The presentation was well played as they have said that I can top up with ease but sadly after getting my hard earned money they are not reachable anymore.

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Ohh too bad... It's really not your fault as I said 97% of people fail in this industry. And also the fault if of your up lines because they should be the ones to support you. And sadly many of the "opportunities" are just scams or are not organized well.

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I tried Herbalife many years ago but I quit the first month because I had to invest more money than what they asked for initially. They wanted money for literally anything. I quit and became a great seller for DN instead. (a newspaper in Sweden). No MLM for me, but I don't think that all of them are as bad as they might seem.

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Yes Herbalife is one of those MLMs that require to sell many products each month, it is focused on sales.

I also believe that not all are bad, but any MLM business require a lot of time and a passion for the product. After some time I also found that it was not the best option for me, luckily I found Hive and also Leo and now I am more passionate than ever.

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MLM are a great idea, but unfortunately plastered with all the scams.

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Yes, it's very easy to lose money or to arrive on a business that ends up being a scam...

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I've not participated in an MLM IRL and I do not think they are all pyramid schemes. I've put a little bit of bitcoin into Mirror Trading International, who use it to trade with and I get interest (approx 10% per month). It has been called an MLM and it has been called a pyramid scheme lol, but I feel I've done my due diligence. Intend to get round to posting about it.

Nice write-up. My preference is for the decentralised space of Hive/Leo too :)

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Yes, it's complicated and it's easy to lose money sometimes.

As I said it's an industry that has bad reputation and I believe that this is because of two reasons:

One is opportunities that end up being a scam and are there only to make money fast and then disappear. And the other reason is because people promote the business the wrong way. Even if it's a legit opportunity, they make promises that are not always achievable or create huge expectations and when they are not met people are demotivated and quit, then call all MLMs scams hehehe.

The same can happen here, if you invited someone telling that on their first post they could earn 20, 30 or 50 dollars, while it's not impossible is not likely to happen to new users, so they would also call Hive or Leo a scam if we did that.

Thank you for your comment!

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Yes, perception (and emotion) has a lot to do with it :)

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I've worked a couple of MLMs that failed, Solavei and Handtech. One was a phone service. The other was an IT back office service. They became insolvent eventually.

I am currently a customer of Usana. I like the products. I never really got too involved in the sales part of it. I do recommend the products. I just don't push to make the sale.

I explored World Ventures. I may at some point sign up for it again, once travel becomes a thing again. But, my interest is the product, not so much the business.

My wife has done some Avon selling. She did that for a while. We wound up having trouble collecting payments for products and had to stop. She still buys Avon from time to time.

I have known people who have been successful with Stream Energy and Ambit.

Some people are successful if they are driven and get the right training. I think the greatest value of MLM is that it is a minimal way to start a business. You don't have to manufacture. You don't have to develop marketing materials. The bookkeeping is rather simple. You just follow the system and training.

One great trainer is Eric Worre who wrote a book titled Go Pro. He makes MLM sales a low-pressure numbers game. He doesn't try to convince the prospect. He lets the marketing material do the work. I think, if I ever got serious about MLM, I would use his method.

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Thank you for sharing your experience.

I know Eric Worre, I read his book some years ago and it's a good method. He teaches how to do this professionally.

I have a friend that invited me to Usana, they have good products but they are very similar to what my mom already sells on 4Life...

Just the other day my wife bought the Galvanic Spa from NuSkin, she is going to test it on her skin to see if she gets the results. Maybe she will make business with it too.

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There is nothing on this planet, what could force me to have any business with MLM. Not as a buyer, nor as a participant/seller.
To me MLM = Ponzi.
Just more nicely wrapped and painted ponzi.

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Yes, that's why I stopped, because I was tired of trying to convince people. As you say you already have your mind set.

Personally I will not participate as a seller or networker, but I do plan on keep buying some of the products that I have consumed for several years, they have worked for me.

Thank you for sharing your insight!

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You sound like a very simple man Eddie, i like.

When i hear MLM the first thing that comes to mind is GNLD, a popular food supplement company in my country. They had some of the most aggressive marketers and unfortunately the poorest. It seemed like a small cult of people pushing a product you really can't afford or even care about. The GNLD business was introduced in my former church years back. My parents signed up and bought a lot of supplements. I guess the fancy trips and caught their attention. They were never able to follow through, gladly so.

MLM aren't necessarily scammy but they mostly offer lofty dreams to people. Judging from your experience, it is clear that it isn't easy even after you climb up in rank and most people end up becoming slaves to the business--or passion( i consider both to be the same).

i will never venture into such a business. I have always considered myself to be a creator and that influences my career path.

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That name is familiar to me but I'm not sure.

You are right this opportunities are seldom promoted as a way to get rich and I believe that is not something positive in the long term. It's complicated and not for everyone.

While I'm still consuming some of the products I don't see myself promoting this kind of business anymore.

Thank you for sharing your experience.

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Perhaps maybe generally people have made the MLM Business to have a bad name after the long run

Yes that's true, a lot of people don't do the business professionally.

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