The Fallout From Network Marketing Scams
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By Donovan Baldwin
The following did not start out as an article. It was actually a response in a forum to some remarks which had been made in that forum about a company with which I am associated. That is why it is a little loose-jointed and tends to sound a little defensive. I was writing rapidly and with a little heat.
The other writer took a certain set of circumstances and turned it into a general allegation of wrongdoing and in so doing made a legitimate network marketing company which provides an excellent service to vast numbers of people look like an out-and-out bandit. Additionally, the same writer had apparently been on a mission to attack others in the forum in much the same way, making several comments about the legality of companies, even some he seemed to know little or nothing about.
Once again, I was struck by how network marketing, and even perfectly legitimate network marketing companies, can be seen as villains without even having done anything. In this specific instance, most of the cursing and screaming would never have occured except for a rogue distributor who made outrageous claims of potential income – completely against the policy of the company.
However, I have been in network marketing since 1996 and have fallen for a good number of the scams and come-ons that are out there myself. I got MY education by being stupid and doing all the dumb things. I paid a lot of accidental tuition and can certainly understand anyone’s negative reaction to anything labeled network marketing or MLM.
There most certainly ARE all types of scams, misrepresentations, and outright lies out there. On the other hand, there are legitimate companies operating in MLM/Network Marketing mode.
One huge problem faced by anyone in network marketing in addition to all the scams and cheaters is that their dirt rubs off on us. Many people in the U. S. and abroad have been taken advantage of in one way or another. Paradoxically, they become some of the best network marketers in the world. Unfort!
unately,
they vehemently and passionately rail against ALL network marketers and create a negative impression of network marketing in all whom they meet.
Two strikes already!
A. Scammers create a bad image of network marketing.
B. Those that ARE scammed increase the distribution of this bad image.
Then comes the curve ball.
Eighty to 90% of people who get involved with perfectly legitimate network marketing companies will never make a penny.
Before I go further, please realize that even the SBA has in the past acknowledged that of all small businesses (and a new network marketer has just started a new business) approximately 50% fail in their first year, and, according to the last figures I saw, about 95% will fail within their first 5 years. Obviously, the life expectancy of ANY small business is not that good. The SBA provides a list of several reasons why this is so, but, without listing them individually, they tend to point to lack of experience, lack of preparation, and lack of understanding in what is involved in keeping a business running.
While collaboration with a GOOD network marketing company can be invaluable for success, it still comes down to what the individual does with the opportunity. In my experience, after the first thrill of receiving their kit, website, or whatever, most new network marketers make a few half-hearted stabs at “marketing” and then quit…if they bother to open the materials at all.
I can guarantee you, also from personal experience that when someone buys into a network marketing company and “fails”, they will blame the company or network marketing in general.
In my own downline in one company I am in, almost every single person who became involved never produced a dime of income even though I built webpages for them, promoted these webpages for them, and advised them on things they could do to build their businesses. Many find the actuality of having to “sell” something beyond what they are willing to do. I have personally!
seen (a
nd years ago did this myself) new network marketers when asked what they did, reply with their current job. On more than one occasion I was told later that they were “embarrassed” to admit that they were trying to get a business going or that they were involved in, God forbid, network marketing.
That’s our third strike.
Most people, even when they sign up with a perfectly legitimate company, never make a dime either due to inaction or not understanding what is required of them in order for their new business to be successful.
In the month of August, 2006, I personally had repeat orders from over 60 long term clients (with me anywhere from 2 to 12 months), and new orders from 58 more. This does not include orders placed with those in my downline for which I receive a commission as well. One of these generally outperforms me, by the way, and another one is my daughter who is a stay-at-home mom who makes as much as she would leaving the kids and working at a real job! Many of my orders come from people who have not ordered for a while but who have returned to my website(s) to rejoin. I have been doing this since 2000 and some come back after being gone for three or four years. I don’t believe they would do that if they were being scammed.
I occasionally lose some commission money as some is refunded to those who have requested such refunds under the guarantee provided by the company.
Not all companies are honorable, ethical, and aboveboard. Some sell products or services of value to only a few or of questionable quality. Even legitimate companies sometimes must field complaints even when they are attempting to do everything openly and honestly. Sometimes these are based on misunderstanding or on misrepresentations made by those who seem to speak for the company. In some cases, something that has worked for millions of people fails to work for a few hundred due to some specific set of events or harmful, though unintentional action or inaction by a company, and a class action l!
awsuit i
s born.
In all these cases, as Shakespeare has it, “The evil (or perceived evil) that men do lives after them; the good is oft interred with their bones.”
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Donovan Baldwin is a Dallas area writer and network marketing professional. A graduate of the University Of West Florida (1973) with a BA in accounting, he is a member of Mensa and has held several managerial positions. After retiring from the U. S. Army in 1995, he became interested in internet marketing and developed various online businesses. He has been writing poetry, articles, and essays for over 40 years, and now frequently publishes articles on his own websites and for use by other webmasters. His network marketing business provides affordable health care benefits to individuals and both traditional and nontraditional family groups. He is actively seeking those interested in starting their own home business.
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