Topic: MLM – a dangerous marketing strategy (Read 1213 times)

Hello, dear Publictalk792 

Unfortunately, my topic "MLM – a dangerous marketing strategy" is currently not available for translation:


If you want to make a beneficial translation, I'm sure you'll find more interesting topics for translation which can be helpful for your local board like "[TIPS] to avoid pyramid quotes (for Newbies)" or similar.
As far as I know, LoyceV also has a great list here, where you can select from: [GUIDES] on Bitcointalk. Index thread (until there is a dedicated subforum?)

Dear 1miau sir,

I want to translate this topic in my Local Language and want to post it in my local community thread. I seem this topic helpful for my community so I decided to translate this topic. I shall be happy if you will allow me to translate your topic and reserve my seat for this purpose. If you will allow me to I will start my work. I will wait for your kind reply.

Thanks
Publictalk

Well done, it's approved already and I've added your translation to my list:

Language	translated by	Title
_____________	_______________	__________________________________________________________
Nigeria (Naija)	Mia Chloe	MLM na dangerous marketing strategy

Once again, it's nice too have such a topic like warning about dangers of MLM available for our Nigerian community.
My topic is quite "old" already and MLM, like Bitcoinnect for example, isn't very popular anymore but it's always helpful to know about MLM and why it's a dangerous marketing strategy.  

@1miau I intend on making a translation of this post in pigin in my local board so I am officially asking to reserve a slot.

Translation is now ready in my local board.
Here is the link ; MLM na dangerous marketing strategy

Sorry for bringing this thread up again. This reminds me of MMM some years ago in Nigeria but most of us have learned the lesson after it crashed. MLM makes people believe that they can get rich by joining them but in reality, very few people make a significant income from MLMs. However, it's also worth noting that not all MLMs are the same. There are some that have more ethical practices than others and there are even some that are legitimate businesses. It's therefore, advice able to do your own research before getting involved with any MLM service. As usual, I request to make a translation of this thread on Nigerian local board using pidgin language. The rate at which MLM (ponzi to be precise) is growing in Nigeria is alarming and it's our collective responsibility to create awareness so people can stay away from this platforms or whatever they are called.

Many people get trapped with MLM because both sides:
- They are lazy to learn, and investigate to find really good companies, projects for their investments.
- They are greedy and want to get rich fastly.

On the sides of scammers, they provides exactly what lazy investors are looking for:
- High ROI
- Easy method to get rich
- Huge passive income with limited initial capital
- and more.

I don't have any words to protect lazy and greedy investors because they deserve their losses. I believe if they read the topic, they will still fall into MLM traps again.

Basically you won't get paid anything until you manage to convince a number of people (victims) to invest in the scheme. After all, its from them the actual money is coming from... That's how you recognize them. Most won't let you quit right away (after you invested) and give you a refund. I knew one that allowed refunds but only for 24 hours.., i guess to comply with local laws (somewhere, often NOT your country, but some fiscal paradise).

The very early ones to enter and leave might be the only ones able to cash something, but it depends on the life of the MLM. I read some estimations say about 8% can profit, so 8 in 100 people will gain at the expense of the other 92 who will lose all.

How long they last? Until someone or group finds out and convinces enough people its a scam; then it bankrupts. Similar to a bank run (and fractional reserve banking is similar to a Ponzi scheme). Basically it lives and dies by word of mouth.

IF its a business that uses some MLM style marketing, but the main income comes from selling actual products or services, then you should research further. If you are selling soaps and get a commission for each one sold but you also manage to recruit people to sell them and earn like 1% of their cut for each sale they do, its still the soap that is making most of the profit, not the people joining to work under you and expand your network.

Sometimes they are very clever and blurry the lines, its not always easy to recognize. You might think they are earning their main profits with another (actual) business when in reality they are doing pure MLM. Sometimes they happened to have another business but secretly isn't doing well, or they buy an actual business (possibly failing) and try to combine it with MLM to give it a decent facade.

MLMs can be recognized in a lot of things all of which relates to commissions on the top of the pyramid. They mostly refer it too level 1,2, 3 and so on commissions that even if the top of the pyramid hadn't recruited someone below him he will still earn from him. With the endless possibility of earning a lot of MLMs fail as they will always run out of money to pay the top users back. And to top it all there is really no business happening new members are just paying of the old members and that how the cycle continues.

Except that in working a daytime job, you are still somewhat secured from getting fcked over and that they don't take something from you except your time and your effort, though it somewhat resembles a ponzi scheme in its level of organization. Also, working under a corporation, big business firm etc. is perfectly legal in any books, and that the workers are protected by a multitude of corporate laws in every government. MLM is an okay business model, only if the people running the operation really sells something that provides for their underlings, but if not, then there's really no point joining these schemes as 99% of the time they are scams.

That's how most MLMers roll; they'll find random friends/ victims on social media, invite them for some chit-chat and eventually introduce the model, sometimes by bringing in their upline(s).

I was an ex-MLMer and their meetings mostly force you to do anything for the sake of bonuses.

I think that the most obvious giveaways about these MLM schemes is their promises of passive income. How you can be able to get one referral, and they are able to refer even more people which can all be traced back to you and if they invest into the scheme, you're able to receive dividends.

This is never a sustainable business model. None of these schemes have ever survived past the point where they don't have sufficient funds to pay back previous investors with new investments anymore, and the owner decides to exit scam, since MLM is highly synonymous with pyramid/ponzi schemes nowadays.

I do see this mistake made very commonly by beginners who think this is a viable investment option. You simply never invest in anything which the underlying fundamentals does not generate any profit, but rather recycles money through the system. It's far too risky to even touch MLM, and you may even be accused of wrongdoing if you promote one.

I remember a meeting I had attended they took me to an expensive restaurant, they were wearing expensive suits and speaking sophisticated English, all was going well till they said it’s a tree model. I took my bag and left I warned the guy who was with me saying these guys will scam, but that poor chap believed them as he had got few paycheques from them. A year later I read in the newspaper how their scam was busted, and they went to jail while I was sipping my hot chocolate like I always do.

Moral of the story a tree based model is a big scam, they’ll dangle the carrot in front of you to bait you and then you’ll be beaten by the stick when it’s busted, earn less money but never loose money in such scams. A popular scam of this type is those Hyip sites and those sites which have level based earnings never put your money in there, even if people are getting paid never do it.

 *Disclaimer I lost a good fortune in those hyips and level based earning schemes, hence I’m biased against them but if anyone wishes to go ahead and loose their money by all means do it*.

Do you mean referral links? It's similar when you compare that both are free advertising by the existing user and therefore he is interested in geting referrals. MLM is much bigger because the referrals of your referrals etc. still get rewards.
But in general agree, many ICOs use it and it's always recommended to keept that in mind when you get over a referral link that the person posting it is interested in getting you in. Don't trust, verify  
Good point.

Just this weekend I was watching a documentary on a MLM scam run by a guy from Spain that took place a couple of year ago (2013..2015). The scammers made their scam work in 78 different countries, making away with 228 million Euros.

What they did, and this was something like the last step in a serious of pre-crypto scam attempts that ended-up turning to crypto for the final act, was create a digital currency called Unete. An investor was promised a ROI of 188% per year. In order to do so, you needed to invest at least 60 euros per month and perform a routine task: copy/paste adds on social networks, investing around 10 minutes per day of your time. The investor was paid in Unetes based on his monthly investment.

Each Unete theoretically had a value of 1 USD, but really lacked any value at all, and the digital currency extent was limited to those that entered the Ponzi scheme.

Yes literally they were fools if they think that they also can make huge profits from this type of marketing.

But will still collapse at the very bottom of the pyramid when the recruits find it hard to get referrals or sell their initial paid products/merchandise and ended up as a "sales agent with a tuition fee" than a marketeer.

By the way, (Overpriced) health products are the number one candidate for pyramiding scams, specially "heath" juices and stupid herb pills which mostly doesn't have a significant heath benefits (like putting a bitter gourd flesh in a capsule).

While there are legit MLMs out there (e.g. AmWay), I just dislike their persuasion and "lies" they churn out to rope you in.

And while we're at it, BITCONEEEECCCCTTTTT!!!

Regarding points 4 about "There is no transparency in MLMs", few MLMs try to deceive user by make their MLMs system open-source or put it on blockchain's DApps to make user think "it's not scam/dangerous if it's transparent".
But the fact that their system is open-source and audit-able doesn't change the fact the risks mentioned on points 1-3 still exist.

I have knowingly experimented with MLM schemes before, because I wanted to understand their business model and also look for warning signs, when they might collapse.    I never recruited other people, because this was just an experiment and I did not want other people to burn their fingers on scams like this.

Some MLM strategies are more legit than others and are actually backed by good products, like Tupperware and some cleaning and health products, so this can be used as a good direct marketing strategy without the Ponzi scheme connection.  

Don't go with the MLM , that is always going to become a scam for some point of time. The money you've earned in MLM were coming from the new investors money.