MLM(multi-level-marketing), also known as a pyramid scheme or network marketing, is a controversial means of marketing approach. Many people don't realise what this is and it is important to understand what MLM is and how to identify it and it's up to you to decide whether this is an acceptable route or not. I find that multi-level marketing is an unfair and unethical means of approach.
What is Multi-level marketing on a basic level?
This graph above is a very helpful way to understand visualise the concept of MLM.
So to put it briefly MLM is a whole system of a company reaching out to salespeople who are encouraged to recruit more salespeople to sell what they are; by means of word-of-mouth or individually as a representative/PR. Those who recruit others earn a certain amount of commission from those they hired and this leads to a pyramid-like continuous cycle. So it is important for the salespeople who have recruited those below them to maintain making money. There can be tens and thousands of people involved and everyone makes some sort of commission at each level. However, these recruits stop at some point as referrals gradually stop, then a loss is guaranteed. Only those sitting at the very top of the pyramid make the real deal money; which makes this whole scheme unfair as those who work the hardest are at the bottom earning 5% of those on top.
Many people sell their 'items' to family members and share them on social media etc this is why it is very easy for companies to get losses by this means, as family members, one-time contribution does not guarantee authentic customers and many people just harass family to help them out. So can this actually be included under marketing and business strategies?
How to identify MLM;
Whether its recruiters in your DM's sending you sugarcoated messages like "Hi gorgeous I saw how lovely you look in your pictures and I wanted you to become a representative of my brand" or whether it's a 30-year-old woman on Facebook either selling some nutrient drinks that her family members buy or a pack of online courses for an unreasonable price, MLM comes in different fonts and sizes and its time we are able to identify it.
It can be in the form of calls, social media reach out, meetings or job ads; can you see the words 'own boss' or 'I am an NHS nurse and a business owner' 'buy my course for £100 per subscription' or 'there's no fixed pay as you are recruited as a business employee'. Run to the other direction of earth and keep yourself safe; if you accept these offers you'll be working tirelessly.
Avon is a prime example of running MLM, the company recruits every employee as a representative so it's a ginormous network of salespeople and they earn money based on how many products they are able to sell through whatever means. It's truly making those at the bottom work tirelessly and the top dogs sit and earn money. Also, MLM employees do not receive salaries as their commission replaces this.
The Talented ladies club, mentions some prime examples of how these approaches are taken I will include the pictures below.
So like I mentioned above, most people reach out through social media and recruit through DM's and the main app included in the process would be Facebook. It is important to research the company properly!
As dreadfully seen on the left-hand size most are told to 'fake it' which is sly for a company to do; faking injuries/ health issues and then saying and frauding others a certain product helped. Does not seem ethical to any degree. People would be scammed into believing a certain product will help them with their issues whilst they're being scammed to the core by someone who is "their own boss" and have a platform on Instagram/Facebook to empower and help others.
I have read on a couple of websites that MLM can be a successful means of service. Despite this, I still find this morally incorrect and as mentioned on Wikipedia some countries like China have allowed MLM with the most stringent requirements and Saudi Arabia have banned it completely.
Within Islam, many scholars prohibit MLM completely and classify it as Haraam (forbidden). They argue that MLM trade involves deceiving others into participating, and the transaction bears resemblance to both riba and gharar. (source taken from Wikipedia) .
Be aware of how MLM can be advertised to you and it's up to you to decide if you agree with me or not; whether MLM is a selfish means of marketing.
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