Reader mail: Network Marketing Super-Manipulation

Well, not everyone agreed with my opinion on the real problem with MLM and network marketing. Here's what one reader had to say:

One point you have missed are the extreme, and manipulative techniques used in much of the MLM industry.

Some are worse than others, but many of them use very DECEPTIVE marketing tactics, they LIE about your prospects for success, and use extremely MANIPULATIVE techniques of interpersonal persuasion.

One could easily write a book on these techniques of persuasion, some bordering on the methods used by cults.

Please, do some more detailed research, instead of just minimizing the problem. There is a lot more to it than you say.

For instance, Amway is listed as a "cultic group" on this respected site!
http://www.rickross.com/groups/amway.html

Also, Herbalife is a total rip-off, in my opinion.
http://www.rickross.com/groups/herbalife.html

Bill

Bill:

Yes, there are rip-offs out there—I don't deny that at all. This was one article primarily addressing one issue—the behavior of network marketers in business social situations. To attempt to extract my total view on MLM from that one article, or to say that I haven't done my research, presumes too much.

You will see on my Network Marketing / MLM page that the first web link is to Jon Taylor's reports, and the third one is to MLM Survivor, both sites which are critical of many MLM companies in a well-researched, not sensationalist, point of view. And, I have read every article on Taylor's site and dozens of the ones on MLM Survivor, plus hundreds of others.

There are a number of very respectable companies in the business, and a number of not-so-respectable. Then there are a whole bunch more who are in between and end up with a worse reputation than they deserve because they're popular and easy targets.

In my article, I'm not talking about specific companies, but the industry as a whole (or more specifically, the practices of individuals involved in it). Indicting the whole industry on the basis of Amway and Herbalife is like indicting the whole energy industry on the basis of Enron and Dynegy. It's a $20 billion industry—there are over 10 million people in the U.S. alone working in the industry, and upwards of 20 million worldwide. There are going to be a few bad eggs.

As for Amway's FTC problems? Certainly no worse than Microsoft's. And the FTC has active investigations going on into software licensing practices. But I don't see anyone except a few hardball open source advocates telling people they shouldn't buy and sell commercial software. (I say that as an open source advocate myself, but I still use MS Office)

I'm not condoning the activities of disreputable MLM companies. I'm just saying that it needs to be put into perspective.

BTW—if prospective network marketers would follow the advice I presented in that article, a whole lot of those problems would be avoided. If you don't do any market research or competitive analysis; if you don't do any kind of planning—marketing, cash flow, etc.—what do you think your odds of success are going to be? It's a business—treat it like one.