MLM's Overthrew the Government in Albania

[Strong Eagle]

So, you think MLM's are harmless win/win businesses?

Think again. The government of Albania was violently overthrown in 1997 because a failed MLM gre so large that it bankrupted most of the country.

You can read about this and more about MLM's at:

http://www.businessethics.org/EinEJan2001.pdf

(may be slow to load)

MLM's are bad business in every sense of the word.

The following is an excerpt from the document:

Most of the formerly socialist countries have been plagued by pyramid schemes, the underbelly of free enterprise. In 1997, a large portion of the population of Albania invested in several schemes. Their collapse led to a violent overthrow of the government whose leaders had permitted and benefited from them. In May, 1998, the People’s Republic of China banned all multi-level marketing companies due to its inability to control the growth of pyramid schemes. Riots against the ban broke out in several provinces.

[tingshen]

hi mod,

MLM itself is not a bad business at all. the concept is great and it really works.

However, people moves very fast. most networkers are not loyal to the previous company due to no results shown in the 3-5 years period. They ends up hopping to other companies, and hoping their previous "upline" could join them so that they can relax a bit.

However, it doesn't work that way, "why shall I join under you?" became an argument and it ends up very bad vicious cycles among all the MLM companies.

If the marketplace is big enough, you probably wouldn't see such thing happened so soon. However, it just took Singapore 4 years to see such thing happened.

Whenever there're new MLM companies coming to singapore, you see old batch of people hopping to it, and trying to lure their "upline" or "team" over so that they can straight away benefit IMMEDIATELY.....

there is nothing wrong with MLM, however, those people who abused the systems makes MLM ugly, makes themselves ugly too....

the trend now is going towards Franchise with a flatter structure, for easier management.

[Strong Eagle]

MLM itself is not a bad business at all. the concept is great and it really works.

You obviously have not read the article at the link I posted. MLM is a terrible business. The concept stinks. MLM screws people and that is why MLM's are illegal all over the world. Only the people who start the thing make any real money. From the article:

The fraud of the pyramid is based upon its perverse mathematics. The promised return of investment relies upon an ever-enlarging base of enrollees, which is mathematically impossible to sustain. An each-oneenrolls-five-more scheme will result in 96% of the
participants always on the bottom two levels where no payback occurs.

In other words, it is easy to prove mathematically that the latest people coming in always get screwed. But people with $$$ in their eyes and the thoughts of easy money just don't want to see that.

[tingshen]

hi mod,

I do not want to read the article simply because of 1 reason: it is a very bias article!

You can prove it from left to right, right to left, up to down, etc, from a mathematical formulae that MLM is not going to work, MLM stinks , blah blah blah, however, most of the things do not work out according to theory. Human cannot play GOD here.

Look, I pointed out what're the potential problems Singapore MLM companies are facing, therefore, it didn't work out properly. There is nothing wrong with the concept, provided you have a big marketplace to play around with.

The MLM concept has nothing wrong with it. You train people to do sales, provide customers service. And these downlines, would slowly master it, and at the same time, they are given another business opportunity to expand their business through the system.

So what went wrong???

People are too greedy to take the short cuts by keep recruting people without learning how to do sales, how to serve customers properly and how to manage the team. So it ends up a lot of people are abusing the systems to make the so called, "fast and easy money".

And how come Insurance which is using exactly the same systems doesn't face such problem? Because in Singapore, MAS stepped in to control and prevent such thing to happened since many years ago, should be in the early 70's. So Insurance agents cannot hop for fun, cannot recruit people unless they are doing very well in sales and get promoted to managers!

If MAS could step in and control how MLM works with a series of rules and regulations to prevent such things happened, and make it work like insurance, you won't have such problem

come on, be realistic, insurance is just another legalized MLM. and dun tell me you never buy insurance because it's a stink structure.....

[tingshen]

sorry, i think in this case, MTI should be the one stepping in to set up rules and regulations to control the MLMs.

If you do pay a visit to an established insurance company, you will realised the top earner are always the very top and early batch of insurance agents, who happened to be the top top district managers in the company.

The newer agents are being sucked by them. So why dun you boycott insurance?

it's a proven truth that insurance is just another MLM, or even like a pyramid

[Strong Eagle]

it's a proven truth that insurance is just another MLM, or even like a pyramid

Well, no, it's not at all... but since you refuse to see except what you want to see, what's the point of arguing?

[tingshen]

dude, you already extracted out the most important part, dun you? So why do I need to go through the whole article just to understand the same thing?

By the way, I'm in insurance industry, are you? If you're not in the insurance industry, you have no right to comment. If you're, please show us some proof to say insurance is not multi-level and not similar to pyramid.

district manager leads a few unit managers, unit managers lead a few agents each. They override each other to certain percentage. this is not multi-level or pyramid like, then what is this?

That's why I never skeptical about MLM. It's the people you deal with. If they aren't good people and you see it, dun join! Until you see a better team, or you simply have the right to talk to all the leaders and choose 1 to join!

Same as insurance, I really can't stand some of the agencies. They sucks. That's why it took me very long to find 1 better one to work together, and I will help them grow in a very stable network.

the whole structure is pyramid like. Just because they are under finance and MAS is monitoring it, it's legalized, and the most important thing, they are selling something which is needed.

There are MLM companies works in similar way, but as what I said, it's people problem, bad guys are abusing the system to make quick and easy buck without supporting and sustaining the network properly.

Commission payout structure can be changed, a lot of things can be changed. So it's people problem, not MLM problem.

Insurance companies can simply launch another department and start selling all the products MLM companies are selling, it's just the matter of time.

[sydneymak]

hey, guys, I've read the articles. I didn't see which part of the article saying MLM as part of pyramid scheme. As I know of, few coutries ban MLM, but more than 100 over countries including Singapore and Malaysia are open to MLM.

I think the issue here is Pyramid scheme, not MLM.

MLM is a legal business, i suppose. If not, why the university of illonois conducting a course on "Network Marketing" by Professor Charles King, a harvard university graduate. So no need to argue so much.

[Strong Eagle]

As I know of, few coutries ban MLM, but more than 100 over countries including Singapore and Malaysia are open to MLM.

Singapore bans MLM's if they use certain business practices (which almost all of them do). You speak as though you can separate MLM from a pyramid scheme. The fact is you cannot, so long as a new "distributor" has to buy in, and the person who recruited the new "distributor" gets a payoff. This is the essence of most MLM's and it is no different than a chain letter selling "reports". The people on the bottom end always get screwed.

[sydneymak]

I did a bit of study in it. I have the basic knowledge to differentiate pyramid scheme and MLM. you know, sometimes we can't avoid to buy certain products which distributed thru MLM channel. it is illegal in singapore if we get involved in pyramid scheme, no matter as a seller or a buyer. I don't want to be sent to jail. So it is important for me to know that i'm buying something thru legal channel. Recruiting part wise, i am not sure if i will agree with you. In order to enjoy discount as a consumer, it is the government rule that all the consumer need to register ourselves with those MLM company. in that case, do you consider that we are being recruited?

Standing from a consumer point of view, as long as I can buy things at cheaper rate, i don't mind. After all, buying from retail shop or shopping centre is about the same. Sometime even worse coz no discount no matter how many time i buy from them.

[Strong Eagle]

If you read the stickys concerning MLM's in this forum, you will see that Singapore makes the following distinctions:

If you are required to buy a certain amount of product in order to join as a distributor, and you cannot get a refund, then it is illegal.

If you must be on some sort of autoship, agreeing to take a certain amount of product each month, then it is illegal.

The higher level distributor can earn commissions on product sold by lower level distributors, but not for product sold as part of signing up a dsitributor; otherwise it is illegal.

Out of all the numerous MLM scams posted here, I have seen exactly one which may have met the criteria for legality in Singapore. There was a joining fee but it was refundable. There was no minimum order and no autoship.

In the end though, all MLM's ARE pyramid schemes... they have to keep recruting new lower levels of recruits and the last levels in always get screwed. Even with MLM's that have been around for a while.

[Barney]

I did a bit of study in it. I have the basic knowledge to differentiate pyramid scheme and MLM. you know, sometimes we can't avoid to buy certain products which distributed thru MLM channel. it is illegal in singapore if we get involved in pyramid scheme, no matter as a seller or a buyer. I don't want to be sent to jail. So it is important for me to know that i'm buying something thru legal channel. Recruiting part wise, i am not sure if i will agree with you. In order to enjoy discount as a consumer, it is the government rule that all the consumer need to register ourselves with those MLM company. in that case, do you consider that we are being recruited?

Standing from a consumer point of view, as long as I can buy things at cheaper rate, i don't mind. After all, buying from retail shop or shopping centre is about the same. Sometime even worse coz no discount no matter how many time i buy from them.

I read with interest the concerns raised here. I agree with syndeymak. I am a MLM consumer myself. It's a new way to retail shopping, only difference is I get a discount, and some companies also offers refunds should the product deem unsuitable. So let me ask, how many retailing avenues out there offers such a practice?

Like what tingshen had shared, it's the people at the top that abuses the system and some even construe the whole idea of MLM. And many are put-off with the idea of MLM business.

My stance is if you are using it for your own consumption, then it would not have much conflict, unless you use it as a business revenue, then you would have to ask where your business ethics could go. How you will deem to approach your downline. Whether you intend to use it as a long term business or a hit-and-run affair. The ball is in your court.

[Guest]

I did a bit of study in it. I have the basic knowledge to differentiate pyramid scheme and MLM. you know, sometimes we can't avoid to buy certain products which distributed thru MLM channel. it is illegal in singapore if we get involved in pyramid scheme, no matter as a seller or a buyer. I don't want to be sent to jail. So it is important for me to know that i'm buying something thru legal channel. Recruiting part wise, i am not sure if i will agree with you. In order to enjoy discount as a consumer, it is the government rule that all the consumer need to register ourselves with those MLM company. in that case, do you consider that we are being recruited?

Standing from a consumer point of view, as long as I can buy things at cheaper rate, i don't mind. After all, buying from retail shop or shopping centre is about the same. Sometime even worse coz no discount no matter how many time i buy from them.

I read with interest the concerns raised here. I agree with syndeymak. I am a MLM consumer myself. It's a new way to retail shopping, only difference is I get a discount, and some companies also offers refunds should the product deem unsuitable. So let me ask, how many retailing avenues out there offers such a practice?

My stance is if you are using it for your own consumption, then it would not have much conflict, unless you use it as a business revenue, then you would have to ask where your business ethics could go. How you will deem to approach your downline. Whether you intend to use it as a long term business or a hit-and-run affair. The ball is in your court.

[Guest]

Oops sorry double posting....no delete mode??

[jpatokal]

By the way, I'm in insurance industry, are you? If you're not in the insurance industry, you have no right to comment. If you're, please show us some proof to say insurance is not multi-level and not similar to pyramid.

district manager leads a few unit managers, unit managers lead a few agents each. They override each other to certain percentage. this is not multi-level or pyramid like, then what is this?

Is the main job of your agents to recruit more agents? Are your agents paid commission when they recruit a new agent? Do new agents joining your company have to buy $1,000,000 worth of insurance policies up front ?

And if the answer is yes, please do tell us what insurance company you're working for!