MLM---A Scam?

Hi everyone,

I think a bit of generalization is going on here. The originalarticle I believe only reflected the personal opinion of Mr PritamMahure, based on the experience he had had with the MLM schemes hecame across.The truth as always lies somewhere between the two extremes. Not allMLM schemes are magic bullets making you rich overnight; nor I thinkit is proper to dismiss the concept of network marketing as MurgaLao Margo (for readers not au courant with Hindi, Murga literallymeans a chicken; figuratively, as here, it means a victim, a push-over; Lao means "to bring").I have been accosted by network marketers many times, as I believeeach one of us has been. Although I never joined any of such schemesthinking I wasn't cut out for this kind of thing, that doesn't makethose schemes bad. There are invariably some bad eggs in thisbasket, but I think it'd be unfair to call respected companies likeAmway or Herbalife as MLM scams.Read Robert Kiyosaki's "Rich Dad, Poor Dad". He has very beautifullyand insightfully discussed the concept of money and how it iscreated. The best way to make a living, he says---and I am totallywith him on this---is to not to work for your money, but rather tomake your money work for you. A businessman makes his money multiplyby making it work for him; a man in service trades with his time andworks for his money. You should be the master of money; money ismeant to serve you, and not the other way around.There is a need to distinguish between pyramid schemes and genuinenetworking companies that generate profits from sale of products.Pyramids schemes are frauds; a few people in the beginning mintmoney. Products, if any, are just for the show; it's only moneyexchanging hands. Soon it's too many people chasing too little moneyand the entire edifice comes crashing down. So stay clear of suchnetworking companies as don't have a solid product range. This isone test that can distinguish a genuine company from a scam: Doesthe company have a well-established range of products?Amway for example has a whole smorgasbord of products. If it hadn'tbeen for the profit from these products, Amway would've been historylong back. But it's a company listed on the New York stock exchange.The idea, floated by two people in a gar garage half-a-century ago,has revolutionized lives of thousand of people in more than 88countries. The business has been approved by the US RevenueDepartment.When Amway arrived in India in 1999, people, especially HindustanThompson, dismissed it saying such things can't work in India. Eightyears down the line, they have floated their own network marketingcompanies, seeing its vast potential! If traditional marketing is sogood, why do these companies want to get into networking? Riding onthe coattails of Amway, many companies/groups have launched newrange of products to be marketed by customers themselves throughtheir networks. Bhilwara Suitings, Rajasthan, I think is the latestone with their RCM (right concept marketing) company.I have studied this concept and I think it's beautiful and veryhumane. While in traditional business, you get ahead by beating yourcompetitor, in network marketing, you get ahead by lending a helpinghand to others. The more your downline sells, the more money youmake. Your sister-in-law's cousin buys a toothpaste in Ahmedabad andyou get a commission for that sitting in Ludhiana! The earnings areshared between the group. Contrast this with Amitabh Bachchanendorsing a product (without ever having used it in his real life)and charging a hefty fee. This burden is passed on to gulliblecustomer. Since there's no advertising in network marketing, thereare no or almost no indirect costs of distribution. The marginnaturally is higher; it is this margin that is equitably distributedamongst the uplines/downlines.Some people aren't able to complete their CA. Rather than making agraceful exit, they start running down this profession, saying ithas no future! Does that make CA bad? Just as CA is not foreveryone, network marketing is not for everyone too. If you tried itand couldn't cut the mustard, that's not Amway's or Herbalife'sfault. If you don't think it's your cup of tea, just leave; besidesthey do give you a 3-month test period---90 days is a sufficienttime to know whether it's working for you or not.I have attended Amway as well as Herbalife seminars. One thing I donot have an iota of doubt about is this: The sincerity of the peoplespeaking from the stage. Some of the stories about how Amwaytransformed people's lives are really touching. Paupers have becomesmillionaires; and they are convinced to their bones that theirsuccess can be replicated by everyone.For the record, I am not an Amway or Herbalife distributor!Thanks,CA Sanjeev Bedi--- In http://finance.groups.yahoo.com/group/ICAI_CIRC_MEERUT_CA/post?postID=EYACNAWsQWmd2giDUSvWskwVgst9A5aYP7oWhUjmNFPlGwVmrMBlzQAeygUi4C4Iss0ZSM6EBsLUmV19tJT0cVsRJ2uBa4gCrE0, rakesh khanna wrote:>> Friend,> I feel u have been cheated by some so called MLM company.Beinga professional I disagree with u'r views.I have also got a chance tostydy the concept .I was also been invited to one such meeting .Iwas also been asked about my dreams.I analysed the concept.Later onI researched about the subject. I gone through number of businessplans which are been offered by by various compaies,claim to be anetwork company.I was surprised by my findings that a no. ofcompany , actually were not at all MLM co. in real spirit they weresimply money redistribution companies ,some with products but notgiving value to their cost,some were even without products. Howeverthere are few companies which are really good companies giving whatever saying.They are serious in their object giving opportunity tocommon people a chance to enjoy their dreams.If u feel to correctu'r conclusions ,feel free to talk to me.>>> WITH REGARDS,> FROM> CA.RAKESH KHANNA> M.9310121967>>