Case Against MLMs & What You Can Do About It

In looking for home-based opportunities, Market Level Marketing (MLM) (or networking marketing) programs have for many years been offered as an option. Over the years there have been discussions as to whether in the first place these programs are legal or even ethical. In his book, “The Case (for and) against Multi-level Marketing,” Jon M. Taylor, MBA, Ph.D provides the strongest critical voice against MLMs.

DISMAL STATISTICS

According to Taylor’s research, the dropout rates are scaring. In his assessment of these probabilities, he insists that one is better off gambling than getting involved in these MLM programs. The following is the data that his  study revealed:

  • A minimum of 50% of MLM representatives drops out in the first year.
  • A minimum of 90% of representatives leaves within five years.
  • By year 10, at least 95% of representatives would have dropped out.

What is of great concern is that there is favorable comparative data on the average failure rates of non-MLM small businesses. According to the U.S. Small Business Administration, small businesses fare better with 20% not making it past the first year, about 50% of them lasting five years or longer, and about a third making it past 10 years.

Taylor argues that based on the extraordinary loss rates MLM programs must not be promoted either as an “income opportunity” or as a “business opportunity”. He argues that this in itself is a misrepresentation. He details factors that make this model ‘unethical,’ though legal in many jurisdictions. He argues that in an MLM model, the market is assumed to be virgin and infinite which is not always true.  There is also the question of whether the prices of MLM products are competitive enough to be sold at listed retail prices. This raises the question as to whether the losses of the hapless downlines are what gives undue gain to their upline.

YOUR OWN RESEARCH

In 2017, AARP Foundation, a not for profit organization which helps vulnerable older adults build economic opportunity, did a study which revealed that only one-quarter of participants make a profit — and of those, 53% make less than $5,000.​ These findings call into question a promise often made by MLM companies of financial freedom through their programs and explain how crucial it is to do your own fact-finding when considering whether an MLM opportunity is right for you. Besides, you need to check that you are not joining a scam before it is too late.

When critical data is missing, such as the actual average income per participant, the reality of a business opportunity may be ill-advised. In the absence of any proper analysis, the easiest approach may be, first of all, to check whether the products or services offered are of benefit to you or your family. In such a case, the justification for your enrolment could be having access to beneficial products at a discounted membership price. This presupposes that your non-monetary benefits are quite crucial to you and your loved ones.

PRODUCT OR BUSINESS OPPORTUNITY?

Prudently, care must be taken to research the alternatives and to check whether the pricing is acceptable. Where you can establish a target market, with proper analysis, you may go ahead, approaching it as a business opportunity. In the final analysis, you would make such a decision knowing that this is a high-risk undertaking.

The internet is a valuable source of data that can be used to make informed decisions. However, there are many single-level marketing opportunities that may have a much higher income than a typical MLM business. This category may include retailing products or services and also affiliate marketing programs.

MY PERSONAL EXPERIENCE

I have been involved in a number of MLMs and most of them I stopped on the way. There was one promoting fashion wear, the other marketing financial literature, the worst was traffic monsoon, offering advertising services, which was stopped by the US SEC. My experience in all this led me to the conclusion that one must fully come to grips of the business they seek to promote. For this reason, I am reluctant to give a sales pitch for my current MLM program.

I am currently an independent distributor with LONGRICH. However, my approach has been to leverage its market analysis and seek to identify a niche that I can personally exploit. This brand is vigorously promoted by mostly independent distributors. In the midst of the noise perhaps some aspects of the business model may be sugar-coated. It is for this reason that I am taking my time to understand the model. However, there is the part that I can easily decipher so far and that is the products being sold.

A REVIEW OF SOME OF LONGRICH PRODUCTS

Longrich is a multinational corporation with an advanced research and development program. They manufacture products under OEM (Original Equipment Manufacturer) & ODM (Original Design Manufacturers) for multinational companies like Walmart, Unilever, Marks & Spencer, Estee Launder, Avon, Tesco, etc.

Longrich has over 2,000 products from eight different categories. They manufacture top quality, unique, and highly effective products. They have a wide range of products which include health and fitness appliances, beauty products, personal care, skincare, dietary supplements, household equipment, furniture, detergents, cosmetics, pet care products and so much more.

ALKALINE ANTIOXIDANT PI CUP

The biggest appeal for their products is that one of them has been of great benefit to me. After I purchased a Longrich Alkaline Antioxidant Pi Cup, my digestion improved after using it. I had struggled with the problem of constipation for more than twenty years.  Now that I drink water from this cup, I have daily bowel movements. To understand how this worked for me, I researched on the internet and came across an article by Dr. Mahmoud Ghannoum, one of the leading scientists researching the microbiome, who aptly underscored the importance of alkaline water. He said Hydrochloric acid as essential as it is for the stomach, can cause gut complications if there is too much of it. He, therefore, recommends natural alkaline water not only for optimal acid levels but also for the promotion of the growth of good bacteria and fungi for the digestive system. He further adds that drinking alkaline water regularly can cleanse the colon, flushing out toxins and free radicals away from the digestive tract.

There has been a lot of studies that have been done on the benefits of alkaline water and quite admittedly it has hardly been conclusive. However, I do lean on the positive side of the argument because of my personal experience. I have even heard of cases where the intake of alkaline water helped someone to stabilize their blood pressure. There is also an account on the internet where someone was relieved of kidney stones as a result of the use of the Alkaline water cup.

An NDTV report cited a study published in 2016 where 150 mice, in an experiment, consumed alkaline water over a period of 3 years. The study results showed probable signs of slower aging in those that lived on alkaline water during the period. The benefits would also include stronger bones and weight loss. Overall, the proponents of alkaline water insist that it helps the immune system to battle foreign pathogens and gives protection from many diseases and health issues. I tend to agree with them.

With my personal experience and some of the data that I have extracted, it made me check for these “alkaline products,” beyond Longrich. I found that the cost that I incurred of $45 was quite a bargain because I found it going around US$148 on Amazon and around $85 on eBay. Similar products fetch around those amounts offering a potential of a good gross margin return on investment. There were other brands to look for like aQuasafe, Invigorated Water, APEX, and Aqua-Ionizer Pro offering me latitude in terms of any future business considerations.

ANION SANITARY PADS

Further, on my product assessment of Longrich products, there are sanitary products that not only meet the hygienic demands of women but also provide additional benefits in the form of Anion enhancements. Anions are naturally occurring and are known to increase the general healthiness and well-being of women. Following their extensive research and testing, Longrich developed anion sanitary napkin that inhibits the reproduction of anaerobic bacteria and improves women`s self-protection and disease prevention ability and vaginal itching.

The traditional padding of the sanitary napkin is made from paper pulp, which is the outcome of processing recycled substances.  There was a study from WHO that established that 62% of gynecological diseases suffered by women are as a result of poor-quality sanitary napkins. “Anion” sanitary napkin, on the other hand, is made from water-absorbing particles, fully wrapped by strictly sterilized, dust-free paper. It firmly meets the national hygiene standard. With my further checks of other brands, I found these notable names Winalite Qiray and Shuya. The prices for Longrich Superbklean napkins are quite competitive and within an acceptable range.

ORAL HEALTH FLUORIDE FREE TOOTHPASTE

Based on decades of research, fluoride has a proven track record of protecting teeth and improving oral health. However, excessive exposure to fluoride has been linked to numerous health issues. There is a definite danger of dental and skeletal fluorosis.

A safer alternative to fluoride, especially for children is a toothpaste with xylitol. Clinical studies are reporting promising results of tooth decay prevention with xylitol.

Longrich toothpaste is fluoride-free and is combined with xylitol as an alternative to those concerned with the effects of fluoride. I looked out for the other brands like Tom’s of Maine, Hello Oral Care, Dr. Sheffield, Spry Xylitol, and Epic Dental and I found that the prices of most of these brands are on the higher side in comparison to the Longrich toothpaste.

CONCLUSION

The choice is yours. You might want to ignore MLMs in terms of business opportunities. But how about their products? It might be a good idea to seriously consider the benefits of being championed in their marketing campaign. If you use these products, chances are that you fall in love with them as I did. The appreciation of the products could be a conduit of a business opportunity!

Please comment below and let me know what you think.

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