DEFENDING ‘REFERRAL MARKETING’ AS A LEGITIMATE WAY OF MAKING MONEY
I was approach the other day and asked a question about the wonderful industry I have been involved in for over 39 years called ‘MLM’. Some have called it ‘Referral Marketing’, other ‘Network Marketing’ – either way it’s a legitimate way of moving great products from a manufacturer to a customer.
I was told in no less words and I quote verbatim – “Looks like a scam to me”. I did not react in anyway, only to educate the person that MLM is totally legal and responsible for sales world-wide that now exceeds $170 Billion Dollars. When the MLM Industry first launched many years ago – it was ridiculed as a pyramid scheme. Franchising was also subject to the same misconception and labelled illegal when it first came to the UK.
Franchising actually began in the United States in the mid-1800's with Albert Singer and the Singer sewing machine. Albert Singer used franchising as a means of distributing his sewing machines throughout the United States. He is credited as the first franchise in the United States and the first to develop a franchise contract.Network Marketing runs on same fundamental principles, without a large investment usually associated with Franchising. Even better news is that unlike a Franchise, you are not limited by any boundaries and can operate anywhere your Company is willing to ship products to
The unfortunate problem with MLM in my professional opinion as an Industry expert, is that some companies use the same vehicle (MLM) to create wealth or generate income without having a proper consumable, affordable and repeatable product.
When you start looking at products or services offered by any MLM company that exceeds $5,000 or $20,000 to get involved – then you should question the motive behind the entre level. This in my opinion looks like a get rich scheme and needless to say someone will eventually get hurt financially. Needless to say, because of such companies that start with a get rich quick mentality and offer people riches for the participation in their programme – this does leave a string of bad publicity, that is no fault of the Industry, just the people behind companies who use the MLM platform.
My advice is for people to do their homework first, and as we have the internet to help us – the searches can be done quicker than even before.
If the company you are looking at has a high entre level – please avoid at all cost. There are UK laws here in England to protect people and £199 is the maximum people can spend within the first seven days – if you are asked for more, then that company is breaking the law.