Why People Call Network Marketing a SCAM


by Lickhau Loo - Date: 2007-03-17 - Word Count: 548 Share This!

When we talk about network marketing or Multi-Level Marketing (MLM) most of the people will immediately has a negative impression about this type of business model.  MLM or network marketing is nothing but a business model itself. 

Let give this into deeper thought.  If Michael Dell chooses to distribute his product through MLM 20 years ago, do you think Dell computer a scam today?  Is Dell computer going to be as successful as today?  Do you think he is going to become one of the richest men in the world?  He might still be rich, but not as rich as today because by distributing the product using Multi-Level Marketing is actually sharing his fortune with his independent distributors.

What give this business model a bad name such as SCAM?  There are a few points that I really want to point out here.

1. Everyone can afford it
This is the business model that cost almost nothing to start up.  The average start up runs as low as $10 per month or sometimes only charging a one time setup fee.  Let’s think about this, how many people can afford to invest in a $10 per month business as oppose to a $300,000 Mc Donald franchise?  You know the answer right away, right?  Network marketing is a business that everyone can afford and not guarantee success.  In the franchise business, not every one can afford it and if you can afford it, you will become successful.  For company such as Mc Donald, the success rate is so high because with the investment dollar that you put in, the marketing and management team actually help you to becoming successful by providing training and market survey.

2. Success rate is extremely low
According to the statistic, the success rate of any network marketing model is only 5% at the most.  When someone failed in this business model, what do they do?  They will bad mouth about it.  This is the natural response of human behavior.  We tend to defend ourselves and put the responsibility over to the creator.  Imagine this, if 100 people join a networking marketing and only 5 of them become successful, do these 5 people has enough ability to give positive testimonial to the program as oppose to 95 negative testimonials?  Over time, network marketing model received great amount negative words to qualify as a scam.

3. Bad programs around
This is just the nature of the business.  There are good companies out there and there are certainly bad ones.  Over the long run, even successful network marketer will not benefit from bad program.  You have to choose the program smartly.  There are some programs out there that provide you some degree of benefit even though you do not promote them because you actually need them from day to day. 

I hope these 3 points give more clarification on network marketing to everyone.  Again, it is only a business model by itself.  Some people choose to market their business themselves (i.e. Dell and Microsoft), some choose to use franchising channel (i.e. Mc Donald and Subway), some choose to use retail channel (i.e. Calvin Klein and Rolex) and certainly some choose Multi-Level Marketing (i.e. Glabal Domain International, Success University and Xango).

A positive altitude causes a chain reaction of positive outcomes. It is a catalyst... a spark that creates extraordinary results!



Lickhau Loo is an expert in Internet MLM.  Want to know how he can generate leads without making a signgle phone call?  MEET him at http://lickhau.payitforward4profits.com Your Article Search Directory : Find in Articles

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