The MLM Controversy

by Rahimah Sultan

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What is MLM?

MLM (multi-level marketing) is a business model for selling products directly to consumers using independent sales representatives.

The origin of multi-level marketing is often disputed, but multi-level marketing style businesses existed in the 1920s and the 1930s, such as the California Vitamin Company (later named Nutrilite) and the California Perfume Company (renamed ” Avon Products”). – Wikipedia


What’s the difference between MLM and a pyramid scheme?

A MLM business always has an actual product or service to sell, along with the option of building your own sales force or global network.

In an illegal pyramid scheme, no one is selling or buying any products, and the emphasis is on recruiting new members.

MLM is a legitimate business model if done correctly.

On the other hand, pyramid schemes are totally illegal.

Since both involve recruiting, MLM critics have often referred to network marketing as ‘legal pyramid schemes,’ which explains why this myth continues to be kept alive.


Although most MLMs are not illegal pyramid schemes, the one thing that separates them from regular non-MLM companies, recruiting.

In case you didn’t know, you have to recruit new members to be super-successful in network marketing.

It doesn’t matter how good your MLM product lines are or what country you’re in.

You know already that success means consistently recruiting new distributors.

Generally speaking, there’s nothing wrong with MLMs or building a team of like-minded entrepreneurs.

But if there’s too much emphasis placed on recruiting and not enough on product sales, an MLM can get into serious trouble FTC.

The FTC states that a pyramid scheme is clearly defined as a company that specifically offers payouts for recruiting purposes only.

Just know that there are two sides to the network marketing coin.

If you hear somebody say that all MLMs are pyramid schemes, don’t fritter away your time arguing with them.

Do your own research and check out companies for yourself if you’re seriously interested in an MLM business.

It might be a good fit for you or maybe not. But you’ll at least now be informed.



What does it take to be successful in MLM?

You must have many qualities and skills to succeed in MLM. You need a lot of patience, determination, a strong work ethic, and excellent communication skills, among other factors.

You need to be a relentless, iron-willed sales and recruiting machine.
If that idea is distasteful to you, even the best network marketing companies are definitely not for you, because it’s ALL about selling.

Selling is an essential part of any MLMer’s overall marketing strategy.

Don’t be fooled by anyone who might try to ease your discomfort by telling you there’s “no selling involved”. There are no exceptions.

The success of any home-based business ultimately depends on how well you sell your products/services.

Nevertheless, recruiting is a skill set that can be learned by anyone from a stay-at-home mom to a broke college student with maxed-out credit cards.

But, there’s always going to be a learning curve to go through to become successful, no matter what type of business you decide to go into. So, be willing to get uncomfortable at the start.

As far as recruiting goes, if you’d rather fight a bear than try to recruit and sell the dream to your friends and family, stay away from network marketing.

‘Sometimes you shouldn’t mix business with pleasure.’

If you’re going to pursue network marketing, be careful who you approach to join your team. Is it worth potentially damaging your relationship with that person? If your answer is no, you might want to cross them off your warm market list.

I hope this overview cleared up some of the MLM Controversy.

So, MLM, as with any business, isn’t for the faint of heart. There are over 1,000 MLM companies in the United States. Do your due diligence before selecting one as your home business endeavor.


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