"Greetings, friends! " Are you also fed up with your boring job? Do you also want to be your own boss and earn lakhs of money while sitting at home? Do you also want to become a crorepati overnight? "No need for a college degree, any skill. You too can achieve financial freedom. " You just need to invest some money and double the returns in 25 days. Join our RNet Company and fulfill your dreams. If these things sound familiar to you then chances are that someone must have tried to trap you in a MLM or pyramid scheme. "For the people who don’t know, MLM is Multi Level Marketing. " "And not only in India but in the entire world, lakhs of people are fooled in the name of MLM." "In today’s Blog, let's get to know in detail how this scheme works and how lakhs of people get fooled due to these MLM schemes. " "An MLM is known by many names. Some of which are Multi- Level Marketing, Referral Marketing, Network Marketing. "
But this Pyramid scheme is a little different. I will explain the difference between the two
in the Blog later but let’s get to know
MLM in depth. Multi Level Marketing is
basically a way of marketing which some companies use. To know the difference...what happens in a
normal company? "In a normal
company, let’s assume there is a company that makes skincare products. " The company manufactures those products.
After that these products go to distributors such as shopping malls or
shopkeepers. The consumers of these
products go to the distributors to buy these products. "So, sellers>distributors>
consumers will be the flowchart for a normal company. " "Now, what happens in fraud MLM
companies?" There are sellers and
the distributors are the consumers themselves.
The fraud MLM companies fool their consumers by telling them that they
are actually not the consumers but rather you are the distributor. "But in reality, they are the
consumers." Did you get it? A MLM company usually focuses on recruiting
more and more people. A normal company
focuses on making good products so that people are able to buy them But a MLM company focuses on calling people
to become distributors for their company and offers them commission in exchange "In fact not only this, MLM Company asks
its distributor to find more distributors"
and they too will get some commission and all of you work on
the basis of commission And eventually
a pyramid sort of structure is formed. "
On top of the pyramid sits the boss, below it are some the distributors who get
some commission, " below them are
more distributors who get some commission and so on. "So, basically, a question will come up
in your mind: who is buying that product and what are these people selling that
is being consumed?" One question
you might ask here is what is the benefit of all of this? What benefit does a MLM Company have of
gathering so many distributors? This is
where the entire game begins. Listen carefully because this is the most important
part of a MLM scheme. All these MLM
companies will say that you need to invest some money to become a distributor.
You need to give them some money. "Now,
all of the MLM companies won’t ask money from you directly." "They will say, 'you can buy our starter
pack or buy some of our products.' "
"And once you have done this and invested your money then, you can
become a distributor and start earning a commission. "
And this is the entire game because think about it- the company has
converted its distributors into its customers.
"Now, this MLM Company doesn’t need to spend on advertisements or
make great products."
It just needs to focus on how to trap as many people as
possible. "'If You come and become
a distributor, you will get a commission. Buy our products in return.'" "Now, let’s understand the Pyramid
scheme. Like I said, the Pyramid scheme is a similar thing." The difference between an MLM and a pyramid
scheme is that Pyramid schemes works in
a similar fashion but there are no products here. People are asked to invest
money. In return there are no products. "Once
you invest the money, you recruit other people. " "Whatever money they invest, you will
get a certain commission but the majority money will go to the person at the
top. " "Say you join a pyramid
scheme by investing INR 10,000." You are asked to recruit at least three
members to get a commission of 10% on the amount they invest. And if these members recruit other members
then you will get 2% from the next level investment. "So, it is quite easy to show how great
a scheme it is." Find three people
and those three people will find another three people and just like this you
will become a Crorepati overnight.
Your money will double in 25 days because this is a chain. You just need to find three people who will
then find another three people and what connections will be made and you will make so much money through
commissions. The problem is friends that
when actually get trapped in this pyramid scheme then you feel that you are
sitting on top of the pyramid but in reality you are at the bottom "This is called ""Up
line"" and ""Down line""" Only 0.1% of people who are at the top earn
profits. Rest 99% are in loss after investing their money because they are
unable to find other people "In most countries including India,
Pyramid schemes are illegal and banned.
But MLM, Multi Level Marketing is actually legal." What is the difference? "In MLM, you are actually selling a
product/service. There is nothing as such in the Pyramid. This is all the
difference there is. " "For
this reason only, most MLM companies show outwardly that we are selling a
product but in reality they are operating a pyramid scheme only. " Their products are disguised so they can stay
legal. In reality they ask you to invest money in
some way or the other whether it is by buying the starter pack of the product
or any other way. "Think of it
yourself friends. In real life, when do people spend money? It is when they see
some value in spending money. " You
buy food with your money because it fills your stomach. You buy movie tickets with your money because
a movie provides entertainment and you see value in form of entertainment. People will spend only when they see
value. The same is with a company. "A company only employs you when the
company sees value in you such that you have these skills, knowledge or you can
do such work. " "Now, look at
it from the perspective of a MLM company. " What value does an unemployed 12th fail
individual have for a MLM company? There
are only two values in him. One is that he has a small amount of money that he
will invest in the company resulting in profits from the company. The second value is if he is fooled then he
will search for more fools who will invest more money so the company earns more
profits. So what is the solution to
this entire thing? The solution is that
you should first understand that in life there are no shortcuts of this level. There are some shortcuts in life but not to
this extent. If you want to become rich
and want to earn money then you must have a skill that would seem valuable to
people or you should have such knowledge that people
find valuable and you can share with them.
If you do not have any skills or knowledge then you first
need to invest in yourself and up-skill yourself. Learn things that have value. Companies see
value and people too see value. One of
the best ways of doing this is through UpGrad.
UpGrad is India’s largest online
education portal which can provide you with entire degrees while being at home.
"They have masters and
certification programmes in many fields such as data, technology, management,
finance and law." "They have
undergraduate degrees and they have partnership with the top universities of
all around the world such as IIT-Madras, "
"IITB, Liverpool John Moore University, Deakin University, MICA, OP
Jindal and Chandigarh University. "
All these universities have collaborated with UpGrad for degree
programmes. UpGrad programmes also help
you with one-on-one interaction with industry professionals. They even have
dedicated student mentors. "You
will also get placement opportunities. If you are interested, you will get the
link in the description below. Definitely check it out. "
"Here, I would like to thank Upgrad for sponsoring this
Blog. " "Hopefully, you must have started to
understand a bit how MLM works" and let’s go in depth and understand the
difference between a MLM company and a normal job. What happens in a normal job? You are
interviewed. There is a screening process. "The company sees your education levels,
skills and whether you will be beneficial for the company or not if it hires
you." But MLM Company does not pay
heed to such things. "There is no
screening process. Whatever your education level be, whether you are employed
or not, have any knowledge or not, it does not matter. " Anyone can become a distributor in a MLM
company as long as they have enough
money for the membership fees or to buy the starter pack of these products. The second difference is that normal company
has a fixed salary or you are paid on the basis of your work " but in a MLM company, the number of
people you get recruited or the products you sell determine the money you
get." "MLM Company does not
pay heed to advertise its product, improve its product because they only focus
on gathering more distributors." "A
normal company tries to improve its products, advertises for it. "
"For this reason, products of MLM Company are usually
extremely overpriced." "Sometimes,
they are two or three times overpriced compared to the products of normal
companies. " The third difference
is that a normal company earns the majority of its money by selling its
products and services while a MLM company
earns the majority of its money by hiring recruiters. The majority money comes from the the initial
investment provided by the distributors
that come and join "Fourth and
most dangerous difference, MLM companies usually hold live events where a lot
of self –help, motivational talks are given." You are told to always keep a positive
mindset. "If someone says
something bad about MLLM, doubts you then get rid of the negative people from
your life whether they are your friends, family. " "Generally, people who participate in MLM, the victims of
this scam become distant from their friends and family due to these very
reasons. " Let’s get back to multi
level marketing and now I would like to explain how you can recognise these MLM
companies. "It is not always easy
to recognise these companies. A lot of times, they secretly entrap you in their
schemes. " First thing is that MLM
companies usually give you incentive to recruit more people.
Normal companies give you an incentive when you work well or
turn up with more sales. "But
here, incentives are given to recruit more people and get more
participants" Second thing is that
MLM companies usually have a hierarchy. "The distributors are given different
tags such that one is for gold level, another is for silver level. "
"To reach these levels, you do not need many skills. You are not
appointed. " Rather all of this is
given by the number of people you recruit below you. The
third thing is that these companies only give you commission when you pay a
certain amount. You can call it the pay-to-play requirement. An interesting thing here friends is that a
MLM company has so many levels which is not functionally required. If you look at it from the perspective of a
company then the company can easily have a referral scheme such that 'you buy this product and if you recommend
this product to your friend or family member then you will a certain percentage of commission.' This is enough if done at a certain level.
What is the need to make so many levels?
They say that you refer one person who will then refer another person
who will then refer another person... They
knowingly want to make a pyramid structure.
Because the main source of income for the MLM company comes
from here. More and more people get
attached. They pay investment fees. They give the initial amount to the
company. Who is the target group for
these MLM companies? Who made the
sacrificial goat here? "These
companies generally target unemployed people, housewives and anyone who comes
under the category of vulnerable people. "
"Unrealistic promises are made to these people, big dreams are
woven that you would be able to do this, you will earn this much." "Pictures of a luxury lifestyle are
painted in front of them, dreams of expensive holidays are woven... Words like
‘financial freedom’ are generally used. "
They claim that you too will become an entrepreneur by joining their
company . "But in reality what is
this company? It is “His Hat, Your Head.”"
If you watch the interviews of the people who have been entrapped under
such schemes "then you will hear
stories -how people reached their limit on their credit cards, took loans to
invest in these companies and were unable to pay the debt" " people lost their homes, bankruptcies
were seen." There is a higher
chance of you winning money in a Casino as compared to a MLM scheme. "Herbalife, Amway, QNET are examples of
some popular MLM companies. " Many
of these companies are earning billions of dollars through these very MLM
schemes. A question might come in your
mind here- Do all these companies who use MLM are a scam? Are all of them
frauds? "To answer this
question, I would say almost all of them are fraud. " "I am saying
""almost"" because there are some examples of companies who
are working almost fine. They do not
scam people every time. " There are
some MLM companies who are indeed using the MLM scheme but the products they
sell are actually good and people are using it. And some people just buy those products and
everyone doesn't turn into a distributor.
One such example is Tupperware.
Tupperware plastic boxes are in everyone’s home. They use
the MLM scheme only to sell their products. But I would not call it fraud here because
its products are actually of good quality. Every consumer is not becoming a
distributor. Another critical difference
is that the good MLM companies will not compel you to invest a certain
percentage of money to get commission. They
will say that you need not invest money every time. If you recruiting people
then you can take the commission. But
in reality there are very few companies like this "
Another question that arises here is that normal companies which are not
frauds, why don’t they use MLM techniques to market their products?" If you think about it from the perspective of
a company then you will get to know the answer. "If your company that is making a
product/service, that product/service is actually good so what will be the need
to hire so many distributors?" If
your product is really good then people will buy it just like that. " For this reason friends, I say that
the products of most MLM companies are bad and overpriced. "
If they try selling those products in the normal market then no one will
buy it.
These companies will start registering losses. "This is the reason these companies are
using MLM techniques to sell their overpriced, low quality products. " The aim of a normal company is to maximize
its profits. If a normal company starts using MLM then it will have to split
its profits at different levels. Why
would a company like to do it? "They
would keep just one level such that whoever is buying the product, if that
person refers it to someone else, "
he will get a certain percentage commission. That’s it.
What is the need to keep multiple levels? "There are very rare cases where a good
company makes good products, it is beneficial for such a company to make use of
the MLM scheme." I can think of
just one example such that a product is
being sold which is being used more by people among friends and family such that
they can recommend it. "So by
recommending it to one another, they basically spread their products through
their network of people." There are
very rare cases where such things happen. "Hopefully, you understood the entire
story of MLM here. " Share this
blog with friends and family so that they too can save themselves from this
trap of MLM. Thank you so much.