Recently, I wrote a post about the product, Mona Vie, which is sold through a Multi-Level Marketing system. In case you are not familiar with the product, it is a super juice of some sort with exotic ingredients, such as Acai Berries and Kyrptonite. I questioned the ability for the juice to cure all the ailments that is claimed by the many distributors out there, and the viability of the business model to actually make money for those same distributors.
The number of comments on that post was pretty incredible. Many of the comments, not surprisingly, defended the quality of the juice. The juice was credited with healing, curing or aiding in the following areas: multiple sclorosis, weight loss, joint pain, high blood pressure, mood swings, something about ORAC values in Leukemia cells, insomnia, headaches, stomachaches, arthritis and gas reduction. I'm serious. It does all this. Read the comments for yourself. They don't lie.
Of course, there were comments that defended the business model, and in fact the MLM business model in general. Frankly, being a money blog, this is what interested me. I could give a damn about the juice. If it tastes good, doesn't kill people, and can sell, maybe I'll sign up to make some money. But do I really want to be one of those MLM people out there?
So, here were the arguments in favor of multi-level marketing.
- The only way commissions are earned is through the sale of the product. Building a "downline" can build commissions, but only if the downline sells juice. The fact that commissions are only tied to the sale of product makes it not a pyramid.
- The corporate structure of CEO>VP>Director>Manager>Peon is a pyramid scheme.
- It's sales, just like being in sales for a big company. You get paid commissions for making sales.
- MLMs generated over 40 billion in revenue last year, so they can't be scams
I guess so.
So, not a scam? Sure, why not? Still something about it bothers me. Let's say you walk in to your local used car lot, and see a cherry red Mustang. A salesperson spots you and walks over. "Sure is purty, ain't she?" he asks. "Yea," you reply, "how much is it?" Used car salesperson responds, "well, I'm not supposed to let her go for anything less than $35 grand, but I like your style. For you? Let's make it an even $34 grand." "Wow, really?" you exclaim, "sounds great, let's start up the paperwork."
No scam happened in our little used car skit. But something just ain't right, you know?
Same feeling I get with all these Mona Vie juice sellers. If someone tells me that he has felt healthier since drinking a juice that he buys at Whole Foods, I may give it a try. If that same guy tells me that he feels healthier, and he would be glad to sponsor me to be a distributor in his downline, the red flags go up.
This is the problem with the MLM. Not that it's a scam. But your consumers are your salespeople. There is no greater way to sell a product than third party endorsement. Third party endorsement happens when someone else compliments you or your product. If you compliment yourself or your own product, it will always be met with skepticism. With an MLM, your consumers are your salespeople. Anytime someone says, "I tried it and it's great," the red flags will always go up.