So I had a student of mine who recently read one of my company reviews recently and didn't like what I had to say. For the most part I am pretty indifferent to companies and just give out some simple facts and lead to the fact that their upline and company doesn't give a rats arse about them in marketing.

Building mlm companies through friends and families can work and that is how most companies are built. I give a solution to helping reps in those businesses to realize there are other ways to generate leads and the Internet is one big one I personally utilize.

But with this strategy you will be bound to step on toes. Why? You can't be right 100% of the time but guess what, this is why this is YOUR opinion. Even if your data is incorrect you should encourage reps in those businesses to come and leave you a message that maybe you don't have the correct entry level price or maybe you had some facts incorrect.

That being the case you just received feedback making your blog or review post all the more relevant with more traffic. The more attention you can gather the better.

Of course if you do it just for the shock factor that is not something I recommend and shouldn't be used to generate traffic. Kind of like calling something a scam only to say this is the best mlm company ever.

But you know what, when your researching hundreds of different companies looking to see who would be a good candidate for review you are bound to run into some ponzi schemes.

Wiki defines Ponzi Scheme as:
“A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors from their own money or money paid by subsequent investors, rather than from any actual profit earned. The Ponzi scheme usually entices new investors by offering returns other investments cannot guarantee, in the form of short-term returns that are either abnormally high or unusually consistent. The perpetuation of the returns that a Ponzi scheme advertises and pays requires an ever-increasing flow of money from investors to keep the scheme going.

The system is destined to collapse because the earnings, if any, are less than the payments to investors.”

Now this is more related to investments then a mlm opportunity but guess what.. you just invested a lump sum of money to be involved in a business. IF the only way you are making money is through the recruitment of people then there is an issue. Sure there are situations where a company will try and legitimize the situation by allowing upper tier positions to get paid on other things but if the common rep who comes in can NOT break even without sponsoring there is a HUGE RED FLAG.

What would you rather me do? Tell you that your business is legit and you will do just fine in the next 10 or even 5 years to come? I would rather tell you I think your business is a freaking ponzi scheme that is destined to fail but if your looking just for short term gain I can still help you. You see if you just want a quick buck ponzi schemes work because as long as your not the chump at the bottom of the ladder you win or at least break even. But if your doing this business to build a lasting residual to take you into retirement and beyond a ponzi is NOT recommended.

So expect to ruffle some feathers if you really are trying to help people. I will straight up tell you if there is something wrong with the business model. Sure I might not agree with a lot of these products or services but guess what that is why network marketing works. The business is in place to sell products or services. If your business has no real product or service watch out! Some are thinly disguised to make it seem like it's got a legit product or service but we all know better don't we.

  1. Make sure that this business you joined has a product or service someone would actually use.
  2. Make sure that you can at least break even just by selling your product or service every month. We all know sponsoring people is hard and most avg about 2.5 in their entire career. Why do you think so many companies tell you to just sponsor 3 and your golden?
  3. If your MLM downline can NOT sustain itself just on selling products or services and MUST recruit to break even your retention will suffer bad. Drop out rates will fall to a piss poor level cause so many will not recruit a sole and will be stuck with an autoship that is bigger than what they could physically match in earnings from products/services sold.
  4. If the last people in are going to be suckered because they can't live without sponsoring then that is one giant ponzi scheme. The entire system built on the sole purpose of recruiting NEW people into a system is not network marketing. Network marketing is the purpose of selling the companies product or service NOT sponsoring people. You sponsor people to push volume or lock people into a service they would have normally used without the network marketing company being in existence.

Engineering Your Success,
Lawrence Tam

Lawrence Tam

Funny dude who grew up in Houston, and retired from Mechanical Engineering at the age of 33. Has 3 kiddos and happily married and marketing full time since 2012. Learn how to take control of your life and health through a simple challenge to keep you healthier one day at a time - Click Here to Learn More.


Mike Thompson · October 8, 2011 at 7:33 pm

Yes I agree with Lawrence in that some MLM companies are just ponzi schemes in disguise.
You must do some due diligence on the company before joining a mlm but know multi-level-marketing is also a great way to Leverage ones time and income.

You must make sure the mlm company you join is doing things legally and it could be the best decision you ever make. Also be aware that it does not have to be a mlm company to be a ponzi scheme and so always check out the venture you are about to embark upon before laying out a bunch of your money.

It is a big red flag when you join the companies conference call and the presenter does not even mention the product.

Mike Thompson

    Lawrence Tam · October 8, 2011 at 8:27 pm

    yeah, it’s fear… fear of the “truth”… Well, good thing there are a lot of good companies that are legit.

Lawrence Tam · March 3, 2010 at 4:34 pm

i'm always up for watching a cat fight. i guess sometimes it just hits home a bit too hard. and if i'm off base, let me know.

Lennie · March 3, 2010 at 3:21 pm

It would seem to me that being upset at someone else's opinion suggests an insecurity and possibly a reference to the fact that there is some truth to what you say. But it sure makes for good reading…

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