MLM Plans vs Pyramid Schemes

One of the reactions I often get from people when I bring up my Reliv MLM nutrition business is "Oh. Oh no. Steve! I thought you were smarter than that. You're not involved in one of THOSE!" "Those" being the pyramid scams that everyone knows MLM businesses to be. The idea that the MLM industry is a giant Ponzi scheme is deeply rooted and nourished by self-righteously ill-informed pundits, and unfortunately there are sufficient unscrupulous individuals and companies out there to lend credence to the belief. But is it really true?

A pyramid scheme is based upon paying returns to investors out of their own money or from money paid by subsequent investors, rather than from any actual profit earned. This is the crucial element, and we may as well admit that there are MLM businesses that follow that model. But that doesn't make the whole network marketing industry a pyramid scheme any more than phishing makes all internet marketing a deceptive scam. At its core, network marketing is simply another alternative for product distribution and sales. It relies upon layers of personal contacts to inform, sell and expand. The more extensive a network you can create, the more money you can potentially earn.

So how do you distinguish between a legitimate network marketing opportunity and a pyramid scheme? Its really not all that difficult. Consider the following:

1. Avoid the "get rich quick" offers. A marketing network takes time and effort to build. You have to work, not just sit back and reap the rewards of having a big downline.
   
2. If someone tells you that you have to "get in early" to build your business and make lots of money, watch out. A well run network marketing business built on a solid product allows you to get involved at any time.
3. Beware of high fees to "buy in" to the business. If you are being asked to pay $100 or more for a "distributor kit" that is nothing more than a DVD and a few paper forms, or if your sponsor is making money when you sign up, look elsewhere.
4. Avoid requirements to purchase a minimum amount of product every month. You may end up with a garage full of products you can't get rid of. If the product is good, and in demand, why is there a need to force you to buy it? (Hint: To help your upline make money.)
5. Expect a money-back guarantee. Not just for your customers' product purchases but on your investment as well. If you discover 3 months into it that its not for you, you should be able to get a substantial portion (90%) of your investment refunded.
6. Do your due diligence. You would not buy a franchise or business without working the numbers. Do the same for any MLM opportunity. No, not the numbers in the sales presentation. Check out the company. How long has it been in business? Is it the target of complaints or lawsuits? How does it earn its money?
   
7. If anyone tells you this is not a sales job, or that the product "sells itself", thank them and walk away.

Certainly there are unethical MLM companies who prey on greed and naivete. The good news is that they tend not to last very long. True pyramids have a way of collapsing. There are also wonderful companies out there who have been in business 20+ years, have excellent products backed by ethical business practices and many happy, successful distributors. It you are considering a network marketing business, your first job is to recognize the difference. Every scam requires a willing victim. Don't let it be you.

More Good News About Soy and Breast Cancer

Increased intakes of soy and soy products may reduce the risk of death and breast cancer recurrence, says a new study in the Journal of the American Medical Association. Another cautionary tale against too quickly extrapolating results from mice to humans.

Obesity Epidemic Tempers Good News on Cancer Rates

NPR reported this morning on its Morning Edition show that cancer deaths in the United States have been dropping since the 1990s. Researchers say that the decades-long effort to improve diets and reduce bad habits, like smoking, have begun to pay off. On the other hand, increasing obesity rates are contributing to increases in certain cancers. Listen to the entire segment here.

High Blood Pressure Linked to Memory Problems

A 2009 study by researchers for the American Academy of Neurology concluded that high diastolic blood pressure (the lower/second number in a blood pressure reading) was associated with cognitive impairment and memory problems. In the study, hypertensive people (diastolic pressure of 90 or greater) were found to be more likely to have problems with reasoning and recollection than those with normal diastolic pressures (80 or less). Every 10 point increase in diastolic pressure increased the odds of suffering some cognitive impairment by about 7%.

It's no news that high blood pressures are implicated in serious health risks such as heart attacks and strokes. Here is one more reason to pay attention. High blood pressure has genetic, dietary and lifestyle components. Are you managing the two that are under your complete control? Do you even know what your blood pressure is? Or did you forget?

The Spamification of Twitter

I've been exploring Twitter for about a month now, and, frankly, doing so to evaluate it as a marketing tool. It seems to me to be a natural sort of tool to use in promoting a network marketing business, which really is a business that is built upon the strength of your real-life social networks. It was also highly recommended as a useful tool by Jonathan Budd in his (IMHO) excellent MLM Internet Marketing training program, which I am beginning to apply and finding both sensible and useful.

So what is my point? Just that Twitter seems to be overrun by people who think that bombarding their followers with an endless torrent of low value, blatantly promotional solicitations for whatever it is they want them to buy is a great idea. Does the fact the people elect to follow you mean that this is not spam?  Is sending the exact same tweet 20 times a day not spamming? Is sending 50 tweets a day with links back to your sales page or web site really effective? Is that the kind of Personal Brand you want to create for yourself? I think not. Take a look at this short video from Katrina van Oudheusden's blog on "How to Fail to Find Leads on Twitter". She says everything I wanted to say here faster and better.

For me the bottom line is this: People who use Twitter to bury me in solicitations simply become invisible to me. After the second day, I don't even see their tweets as I scroll past. They may have thousands of "followers" but how many of their messages even get seen, let alone read? Who really believes that anyone has "The Big Secret" that will make the rest of us rich, and that out of the goodness of their hearts they want to share it with everyone if only we will visit their web site? I want to stand out, but not that way. I want to to be one of the people who's tweets you will stop to read. If I send out five tweets a day, four of which are completely non-promotional, value adding, interesting messages; if I take a genuine, sincere interest in creating and building social connections and relationships; if my marketing messages are open and straightforward and not sneaky...... then over time I will build a Personal Brand that will attract the people who are looking for what I have to offer. And isn't that what marketing is really all about?

Wishing Everyone a Safe, Happy and Healthy Holiday

I am taking off to Wyoming for a holiday clan gathering. So best wishes to everyone for a great Thanksgiving (or whatever you celebrate) and I will be back on Sunday.

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