MLM - the marketing to end all marketing?
Lately, I have been reading up on multi-level marketing or MLM for short. Before reading up on it - I had no idea what it was. It all started with a debate on one of the forums I frequent maybe 7-8 months ago. A digital newspaper (ComputerWorld) had published a critical article about the company claiming that the international company had suffered severe losses. They compared the company to the illegal pyramide-schemes and so started the firestorm.
At first I was curious as to what it was all about, and then several of the arguments presented peaked my interest. As it turns out MLM is a form of marketing designed to profit from mouth-to-mouth advertising. Among the most prominent of the companies using this form of marketing is Tupperware ™. I had heard nothing before that there should be anything wrong with this company - and certainly nothing that would make it illegal. Then one of the debaters started using illogical and contradicting statements.
Now, I take a bit of time to be convinced of anything when it comes to new methods of doing business. I am a former accountant and thus know that you can certainly make easy money - the question is whether you’ll get away with it and for how long. Every time a critical question was raised, the debater posting would be ridiculed for being old-fashioned and failing to see the bigger picture. In addition, everytime a question was raised - it was responded to with at least five counter-questions that made no sense. Before those questions were taken apart by other debaters, five new were raised - effectively burying the original question which was left with a vague or no answer at all.
I’m a stubborn person and I’m not easily swayed by these tactics. Along with a few others, we held out against the bombardment and continued to press these issues. Another tactic then surfaced. During the debate, I was called everything from a poor friend to an ignorant fool. Back-patters surfaced giving praise to the MLM methods. In the end, the result was a very messy thread with both sides going totally overboard in slander and direct threats. By refusing to answer any direct questions with any direct answers, I was left with a lack of conviction about whether I was correct in my assumptions or not.
About a month ago, I then enter a very similar debate on another forum. I’ll be honest and say that I was looking for trouble. I went and posted the one question that had ended the debate before: “How do you as a MLM person manage to not break this particular rule in advertising?”. The rule in question for those interested prevents any company from contacting private persons with the intent to sell (it is in the Danish advertising law under paragraf ?6a as well as the “door-to-door sales”-law). Now starts a fury of indignated responses - the debaters are quickly divided into the regular two camps. Although the debate never turned as hostile as the original one - it quickly reached a stale-mate. Each party with their arms crossed going: “I’m right!”.
The moderator of the forum then proceeded to go and ask the Ombudsman (a proclaimed Danish invention - basically an agency designed to find and prosecute law-breakers within the limited scope of consumer-law) for an answer. The answer was very much against MLM - it basically claimed that MLM-companies in themselves were not in conflict with the law, but their representatives were with their methods. Of course - this is not a court-ruling - the Ombudsman is the consumer’s guy - not an impartial jury nor capable of judging anything with binding effect.
During the debates, I decided to go and find my own sources of information - nothing is better than the internet at this, and I quickly found that with this topic, there were many praising it to the high heavens - and equally many damning it to the lower parts of hell along with telemarketers and lawyers. Then I came across a site entitled “The 10 Big Lies of Multi-Level Marketing” and I’ll be honest - I was so amazed that I decided to write a couple of blog-entries about this.
I’ll take the top-three arguments that was used in the debates I participated in and try and explain what a hoax, MLM really is - so, stay tuned.