“A multi‑level marketing (MLM/Pyramid) plan promotes the supply of a product to participants in the plan. Participants earn compensation based on supplying products to other participants or customers. Pyramid selling focuses on generating profits by recruiting others and not primarily from the sale of products. A multi‑level marketing plan is a legal business model for selling goods and services. Pyramid selling, on the other hand, is illegal and constitutes a criminal offence in Canada.”- Government of Canada
Since covid, these companies are booming. They are finding new ways to reach out to people but the basic tricks remain the same. I happened to watch the Amazon series LulaRich a few days ago, which opened my eyes to what extent can so-called company owners go to rob people of their happiness and inner peace, let alone their money, friends, and even family members. Here are 9 signs which can help you spot these companies.
1. “I Have a Brilliant Idea That I Want To Share With You.”
An old friend/ friend or an acquaintance suddenly calls you 1 day and tells you about a brilliant idea that she wants to discuss with you FACE-TO-FACE. Think about it, the same person who never went beyond formal exchanges is now eager to share a business idea with you. Sometimes, they insist you go and meet someone who has a way to make full-time money with part-time work.
2. “Your Educational Qualification Does Not Matter.”
Usually, companies go through a process before hiring someone. Your education, experience, and other skills are tested in several rounds of interviews. In contrast, to be a part of the MLM/Pyramid scheme, you are just seen as a consumer and the company is more eager to welcome you than you are willing. If you feel that you are being rushed to join a company even though you know nothing about how it works, think twice.
3. The Atmosphere In The Meetings.
You go to a ‘meeting’ and the atmosphere is hyped- up with over-enthusiastic people who are apparently at big designations in the company and making a ‘six-figure’ income. Usually, it is a way to trick the new prospects into thinking that people who are already working, are doing well. These companies often hold big conventions, have frequent meetings where everyone talks the same language. For an outsider, it looks like a cult.
4. The Prospects Company Focuses On.
These MLM/pyramid structured companies mostly focus on vulnerable groups of society. That would be students in need of quick money, minorities, immigrants and stay-at-home moms, etc. In other words, they identify people who want to make money quickly. That is when the real hunt begins for the prey. They will wash your brain and you will be swayed to do anything to earn a quick buck and in turn, they will get bigger chunks of money in bonuses.
5. The Stories.
Speakers talk in circles, usually their rag to riches story, openly flaunting the money they have made with the company, instead of emphasizing the ‘product’ or ‘services’ they are providing. Even someone tries to question, they do not get straight answers. These MLM/Pyramid companies have created some content in the forms of Youtube videos and convention recordings just highlighting the success stories of some individuals and not those who have failed.
6. The Recruitment.
At some point, they create urgency and immediately want you to enroll in their company, as it is a once-in-a-lifetime opportunity that will not wait forever. Their main aim is to give minimum time to the prospect to think or consult anyone else. If you somehow escape, there are several follow-ups to ask about your decision. That is merely a way to make a conversation and convince you somehow.
7. The Catchphrases.
If you hear words like ‘System’, ‘helping families’, ‘strengthing families’, ‘financial independence’, part-time work with full-time money’- better run while you still have a chance. In these companies, there is more than needed criticism of jobs, businesses, and other conventional ways of making money. Be your Boss is the most common phrase that you will hear them saying. Being your boss is never achieved by joining someone else’s team and that’s a FACT!
8. The Role-Models.
They give examples of so and so people who were fed up with their jobs or people who were very comfortable in their jobs, and they joined the company and now they have wonderful lives. Both kinds found the purpose of their lives in this miraculous company.
9. It Seems Too Good To Be True.
If still there is room to look for signs, I would say go with your gut feeling. Our gut knows more than we think and sends signals to direct us. The bubble of get-rich-quick schemes bursts in no time. Many of these MLM/pyramid companies end up in lawsuits as per a Forbes article and others are on their way. Next time some ‘business owner’ shows their six-figure income from such company, ask questions like:
- How long did it take to earn that paycheck?
- Is the income consistent?
- How much investment did they make before earning that money, both in terms of money and time?
- Does their income depend on the sales they make or recruits they hire?
- Is their Bonus is larger than their actual sale/business done?
The answers will direct you to make your decision regarding these MLM/Pyramid schemes.