Multilevel marketing was always present from a decade or more. Even today, you can find many MLM companies cropping out every day. They have their own strategy and ways of operation. I have been studying the trend of Multi level marketing for years. With a series of peripheral research, I came to dislike the new generation network marketing companies.
The new generation of MLM is basically selling the dreams of passive income to people. Without selling a single product, how can someone get into a pyramid scheme? Some people might feel attracted in the beginning with the false promise of individual dealing with New Generation MLM. But gradually, they will come to know about its flaws.
Top 5 Reasons for not Liking New Generation MLM
Creation of own competitors
There are some rules of multi level marketing. Here at the first stage you need to sell things. Along with your selling activity, it is also equally important for you to get in touch with such people who can dedicate effort in selling like yourself. Thus, commission will be earned through the sales they achieve.
But today’s MLM concentrates on only recruiting people under each head. They do not choose people on the basis of talent. Rather they concentrate on the number of heads. If you can think deeply about recruiting people under you from your friends circle or peers, you will soon realize their competitiveness in the market to defeat yourself.
Conflict between Passive and Active income
One of the attractions of MLM is commitment of passive income. Here, many people benefits if they can recruit good and productive people under them. They can form a wonderful company by themselves and even work for making upper level gain. But, there is a contradiction with the primary message of MLM, “Marketing a product”. Thus, I fail to understand whether I should concentrate on marketing or sales in new generation network companies.
Profitability with question
Business concentrates on profit. Since MLM is also all about business, profit is one of the main concerns of this business. Even after deducting marketing and other costs of the business, there must be a profit margin.
But today’s MLM fails to achieve profit of the business. Since, the products over here are redundant and overpriced, very less people wish to get it. Thus, the company does not get appropriate margin to cover . Network marketing with new generation hides the cost of marketing and recruiting. People have to pay this from their pocket.
Most of the present companies concentrates on pyramid scheme. The reputed MLM companies provides a loud disclaimer that, “We are not pyramid schemes.” Most of the MLM marketing companies say that the organization that follows the pyramid schemes are not legal.
The direct selling associates having direct contact with the company convince people through two main tactics. Firstly they give them a clear idea between pyramid schemes and MLM industry. Secondly, they claims that unrelated schemes with MLM are pyramid schemes.
Inculcating like Indoctrination
You will find much new MLM organization speaking about support training for personal growth. But, they results into indoctrination centers. But, this flaw might be denied by many associates working in such organization. But, I have seen the so called team building exercise with the same technique.
These are the flaws I have realized in new generation MLM with research for years. You may also find psychological pressure put on various individuals working under the experienced head of new generation MLM. You must read all terms and condition and profile of such marketing company really well before proceeding.