Bad Business IdeasAt Creative-Small-Business-Ideas I am working to bring you the best small business ideas I can find. But I also thought it might be helpful to educate you about some of the bad business ideas I have found too. And in my personal opinion, and from my own experience, multi-level marketing is definitely in my top five. Read this article by David Campbell of Home-Based-Internet-Marketing-Business.com to find out why.
Does multi-level marketing sound tempting to you? Please read this, and change your mind.Back in the mid-1990s, I joined a hot new multi-level marketing program selling discount long-distance telephone services.The company looked great! The compensation plan was excellent! I could be making very nice money in a very short period of time! WOW! I'd be genuinely helping people save money on their phone bills at the same time I was earning a good income for myself! Sign me up!! After joining, I sold the phone service to various friends and family. Some joined my downline. I was getting commission checks now and then. The checks weren't very big, but they did keep me motivated. I just KNEW that when my downline grew explosively (as the company suggested) those small checks would increase dramatically! Then tax season rolled around. Doing my taxes forced me to take a clear look at the actual numbers. Bottom line? I'd gotten a bunch of new phone customers for the MLM company, plus a number of new reps. But my hard work had earned me only . . . a net LOSS of about $1,000! How could I have been so blind for so long? Hope and hype. Their blinding hype and my blind hope. Here are some well-researched facts that apply to all kinds of multi-level marketing programs:
Regardless of the language they use, if a program pays out to more than one level of participants, it's a multi-level. Don't let them fool you. The same basic scam has been repackaged in countless ways over the years. MLM affects the fates and fortunes of more than five million new recruits in North America every year. And countless more in other countries. An extensive statistical study by Pyramid Scheme Alert has revealed that in a sample of major MLM companies, 99% of sales reps suffered a significant financial loss. If all the participants over a five-year period are included in the calculations, the failure rate rises even further. Less than one in a thousand will have gained any profit at all. The so-called successes in MLM, year after year, are in the same small group of people at the very top of the pyramid. They typically represent only one-tenth of one percent (00.1%) of all reps in the company. (www.pyramidschemealert.org) Statistically, you have a MUCH better chance of making a living by gambling in Las Vegas casinos. (Don't try it. The odds may be way better than MLM, but they're still really terrible odds.) The State of Wisconsin has documented evidence - from tax returns - that people in the top 1% of distributors for a major MLM had average annual net incomes of minus $900. In other words, even people who had reached the top 1% of distributors LOST an average of $900 for the year. (www.mlm-thetruth.com/STATISTICS.htm) Because of the highly motivational and relational nature of most MLMs - and because of the outright deception - intelligent people often continue working in MLM for years without actually making any money. How many of these same people would work at any other kind of job, month after month, without actually making any money? (Please understand. Many people DO bring in some money from MLM. So we think they are "making money." The problem is that their business expenses virtually always exceed their business income. So they may be bringing in money, but they are suffering a net loss of money for their efforts. That's exactly what I was doing back in the 90s.) Multi-Level Marketing is "one of the most pervasive frauds and ethical abuses of our times," says author Robert FitzPatrick, co-author with Joyce Reynolds of the book False Profits: Seeking Financial and Spiritual Deliverance in Multi-Level Marketing and Pyramid Schemes. MLM should stand for "Major Loss of Money." (Here's another important thought, from a different perspective. Even if you yourself DID somehow manage to make a living from MLM, most of the people you recruit will actually lose money. Some of them may lose a LOT of money. Do you really want that on your conscience?) For sound advice on how to make money at home. I invite you to visit David's site. He has a lot of helpful information about internet marketing and building a home based business. Return From Bad Business Ideas To Articles Page
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