If you Tell Three People and They Tell Three People...

Last week while I was sitting writing my blog, my friend Scott came around and we struck up a conversation about jobs and making money. Scott has a job, but was looking for another way to bring in some form of income throughout the summer. We decided to brainstorm and brought up several different ideas. I told him one option would be to get a part time morning job. I also told him it would cut into his free time substantially, but would provide him with the excess income he was looking for. We also joked around and discussed the option of going to a local casino and hitting the jackpot. This idea was frowned upon by both of us, and quickly discarded. The reality of life is that generally speaking, you have to work hard in order to make a living.

There are very few, if any, opportunities to work minimally and make oodles of money. I was faced with the reality of get rich quick schemes when I was approached by someone recently who was excited about a new program that had arrived. The individual explained to me that I could be part of a new and exciting business that would allow me to make my own hours, get paid commission by telling people about this company and getting them on board and paying dues to ensure that I got the best rates on certain products. Before I even heard about how much the dues were (which were rather expensive), I already had a mental red flag go up. When I hear commission based on who I tell and who signs up, my mind generally goes right to pyramid schemes and how they can be deceiving to someone who is looking for a job or someone who doesn't know what they are.

I was told about how if I posted my member site to Facebook and 20 of my friends joined in, I'd get commission based on their involvement. If they got excited and those 20 friends posted their sites and those friends had their friends join, I'd receive more commission and not have to pay dues anymore. The same thing would happen down the line where I would get commission based on how many of my friends' friends joined. Let me say this, if you are someone who is looking for a job that will provide you with a decent salary, MultiLevel Marketing (proper name for pyramid schemes) should probably not be your first endeavor. 

So what is so wrong with MultiLevel Marketing? Are there any forms of it that work? As a matter of fact, yes, some forms of MultiLevel Marketing are not as untrustworthy as others. For instance, the company Mary Kay is technically a form of MultiLevel Marketing, and one that is not only successful, but one that can be trusted. I know two people personally who have been consultants for the beauty supply company, and have both received pink Cadillacs (one of the perks of selling a certain amount of product) as a result of their work with the company. I also have several other friends who have done it as a side job, and love it. While I am not saying avoid MLM jobs all together, before becoming a part of one, do your research.

Who told you about the opportunity?

Did one of your friends tell you about this opportunity and is that person reliable? In most cases for me, I have been invited to one of these business propositions by someone I do not know. Most of the time, those people have not been successful in their endeavor. I find it very easy to discredit what someone is telling me about if they themselves are struggling to increase their following.

How much are you paying in dues?

In my most recent discussion with a representative, I was told that in order to become a member/sales rep, I would have to spend two hundred dollars in startup costs, and then spend fifty dollars a month past that in order to keep my benefits. Now, in their defense, if I had gotten ten other people to join I would no longer have to pay dues.  The fact remains, however, that as a recent college graduate with little money, the initial cost of being a member is quite pricey. On top of that, if I go a year without recruiting those ten people, I'm out eight hundred dollars. I don't know about you, but that does not seem worth it regardless of the benefits. I find that many people spend excess money on benefits that they never use, and in this case, it sounded no different.

What is your commissions based on?

Is your commission based on the amount of product sold, or is it mainly based on how many people you get to join? In the case of a Mary Kay, your commission is based mainly on sales and not recruitment. If your commission is largely based on the amount of people you get to join, chances are it's not a worthwhile investment of your time or money. 

At the end of the day, remember that getting rich quickly is highly unlikely. It doesn't matter how good the offer may seem, you need to work for your money. Be ready to ask yourself if it is worth your time and effort to become part of an MLM and how much you are willing to sacrifice. Consumer Fraud Report is a great resource to determine whether or not the business you are looking at is a reputable company. Do your research. Don't end up like Michael Scott of the Office and end up in a mess endorsing useless products. 

Have you dealt with a pyramid scheme before?

Seth P.