So what is MLM and pyramid scheme? Most people when they see Armway, MaryKay, Avon, It works, Nuskin, and many more companies who recruit people to do direct sale as pyramid scheme. Some people said they make a lot of money with these business and some were able to quit their full time job and stay home. When people approach their potential buyer/ “down line”, you will hear these similar terms: “Are you a stay at home mom and want to make some extra cash? Do you want to be your own boss? Do you want to set your own hour and work whenever you want?” The answer for that is yes, yes and heck yeah. Who doesn’t want to be able to make a bunch of money and stay home with their children? But if it is too good to be true, it most likely is. There is always a catch or fine print somewhere that will jump out at your least expectation and leave your mouth wide open without any words to explain.
Let’s begin with what is MLM? MLM also known as multi-level marketing. It is a marketing strategy that allow you to earn money not only from the products you sell but also from the sales of the other people who you recruit. You will hear the word “down line” a lot if you decide to join these company because that is the main key if you are going to make money or not. This is also a direct sale to consumer model that use the technique of “word of mouth”, referral from you to family, friends and then friends of friends. You will be encouraged a lot to get people to sign up as a distributor. Remember, your down line is the only way how you will make the most money. The more down line you create, the more money you will earn.
What is pyramid scheme? It is illegal in many country not just in America. Pyramid scheme involves an organize/company trick you to sign up by paying a fee and promise to give you a share of the money from all the new recruits that they enroll. There usually no items or products involve into these scheme. They understand that they can’t just going around and recruit people after people so they make it a little bit simpler. Instead of recruiting a lot of potential victim, they each only need to get two to sign up and those two go out to enroll two more and it just keep going on and on and on. Different company have different plan but it is pretty similar throughout.
So why is MLM associate with pyramid scheme? It is simple, by selling the products, the company is no longer consider a pyramid scheme. I am familiar with Nuskin because the boss that used to work for sign up as the distributor. She even set up power point slide show with someone who was at the top to come and talk to some of the employees at work, me included. They tried very hard to get every one sign up and when I refuse, they gave me a reaction like I was missing a huge opportunity. I didn’t know how big of an opportunity that was but I certainly saw how many products was left over from the auto shipping and none was really selling. At the end, she pretty much gave it to people as gift. I didn’t know how that turn out at the end because I resigned.
Recently, I ran into this wrap products from “It works!” company. I was very curious about it because being an esthetician, I am familiar with the body wrap treatment at the spa which involve products and massage technique to help reduce bloating, water weight and get rid of cellulite slowly. If you go to any beauty show, there are so many variety creams, gels that will help you with that. You name it and they have it for you. But it comes with a price and it is very high price too. So with the distributor price at $99.00 with a box a wrap (4 treatments) and then get another box free (special at the time), I signed up for it. It is a reasonable price for me because I don’t mind spending money to take care of my body from my skincare to my body cream. I also a stay at home mom so if I make extra money than yayyyyyyyy 😉
This is what I learn after signing up for the distributor at “It works! Company”. First and foremost, the wraps didn’t work on me. It is something I already predict before I bought it, just like my experience with all the acne cream I bought when I was a teenager. Some products will work, some will not work on you. You just move on to the next and stop wasting money on something you know that doesn’t fit you. What I don’t like about it is that as soon as people said they don’t see the different, there would be someone who ask you if you drink enough water, if you eat way too much while you have the wrap on and ya da, ya da, ya da. It seems like it wasn’t the products but me who didn’t follow instruction. Bad, bad reaction there. And if the best seller product didn’t work on me, how any other products from the same company would. Sorry, I rather spend money on makeup and healthy food then swallow some pills. If I need my metabolism boost, there is biotin which great for hair, skin and increase your metabolism as well. And you can get that at Walmart, Walgreen, CVS and many more drug store. You want to suppress your appetize, coffee. Why do you think I love coffee so much? I love to snack but I rather sip on coffee instead. Coffee pills also do the trick but take it at your own risk, I got shaky once time so I never take it again.
So this is what you need to know before you sign up for the It works! Company. They will charge you $20 for the website where you will sign up Loyal Customer (LC) or buying products from your website. There is option for you to opt out but what kind of business doesn’t have a website. I doubt that you want to direct all your lead to someone else page. Second, you have to set up the auto shipment over a certain amount to be able to qualify for commission. That is where they get you, doesn’t matter if you sell any products or sign up any one, they will make money of you from these auto shipment. You can also opt out from the auto shipment but you will not get any commission from sign up any body. The only commission you have is if any one buy the products at full price on the website, which you have to pay $20/month to keep it live. So tell me, will you the money you make be worth it comparing to the money you have to spend. In business, the profit is the main thing. If there is no profit, why you are in the business. If you want to sell a product, you have to get the cost of making the products to be lowest and sell at the high price. If you sell the individual wrap at $25 each, you break even with the amount you spend. But most people forgot the hour salary that you put in to sell those wrap. If you work at $10/hour and it took you 4 hours to sell those wrap. You actually lose out $40, so you are no longer break even. The only way you can make any money is to expand your team, sign up loyal customers, distributors. The more people you sign up, the more money you will get from their auto shipment. On the side, you can make money from selling off the products you receive from doing at home party, friends, family which you will lose later on if things doesn’t go smoothly. And the company also keep your credit card on file to charge it too and the customer service can’t do much because they are not the one processing the payment. You can delete your card on file if you are a distributor but if you are a loyal customer, you are pretty much screw. The only help you can get is from the person you sign up with, and just pray that you have a great one who will jump through hoop for you.
What about loyal customer? You don’t want to spend $99, then spend $59 for 3 month. You can’t sell the products either. If you don’t like the products and you try to sell the left over, they will charge you money for it. They have a team just to monitor site like Amazon, Ebay, and Craiglist. Which is very illegal to me? What if I buy a DVD, and I re-sell it after I am done with it. Is best buy or Walmart will charge me money for selling something that I own? You also will get charge if you cancel the auto ship before the 3 months are up. So if the products don’t work on you, well you either switch so something very cheap or just acknowledge the fact you will lose all that money on something doesn’t work on you. They also charge shipping fee and taxes as well. Most of the company give out free shipping for over $50; and their boxes are very, very small, it is so easy to give out free shipping. But hey, more money in the company pocket right!?
The company also have tons of picture of before and after, some very questionable picture as well but I will not get into it. I have my own before and after and it is not that anything that impressive. Like I said before, it might works on others but not on myself. I don’t know if this company is involve in pyramid scheme or not but I know for sure it is focus more on signing up people than promoting their products. For example, shiseido is not only famous but very popular skincare products brand in Asia. Their products are great, and I use them even though they can be pretty pricey. Their products work and they don’t have to get any distributors. They can do direct sale from their own website and see the money rolling in. If these products are such a mind blowing experience, why they didn’t sell it directly to customer and get a lot higher in return profit.
If you make lots of money with these type of company, than keep doing what you do. If you are new and want to try it out, be careful and do your homework before throwing your hard earn money out there.