Are there ethical concerns to worry about when it comes to network marketing? You bet. There are ethical concerns in EVERY industry.
While there are many “good” and “honest” people in network marketing, there are definitely some unethical people, too. Unfortunately, these folks give our industry a bad reputation, which ultimately hurts everyone in our industry.
In the paragraphs below, I want to share what I consider to be the Top 4 MLM Ethical Concerns, based on what I’ve found with nearly 13 years experience in this industry.
1. You Can Get Rich Quick: Many people are lured into our industry with the promise of getting rich quick. They are often told that they can join the ground floor opportunity and get wealthy without doing much work. All they have to do is sign up and the sponsor or upline will do everything for them. As a result, many folks who enter our industry have a “lottery mentality” and expect to make lots of money without working.
Things never work out this way. The truth is, you can get very rich in MLM, but most people won’t! In fact, most people earn nothing at all! You can make a lot of money, but it typically takes YEARS of hard work and persistence working in ONE company. It also takes a strong marketing prowess. If you are telling your prospects that they can get rich quick, without doing anything at all, please stop! You are doing more harm than you are doing good.
I’ve owned several different types of businesses and I can speak from personal experience: building a successful and profitable business in ANY industry is hard to do. That’s why businesses have such a high failure rate. Don’t believe me? Just drive through your local community and see how many businesses have closed down! Or, ask any entrepreneur how long it took them to make a profit in their business.
2. The Business is Easy to Do: This industry is simple, but it definitely isn’t easy. Ask anyone who’s made it to the top of their pay plan, and they will tell you how hard they worked for a long period of time.
The fact is nothing worth accomplishing is ever easy. Many folks are taught that all they need to do is sponsor 3 who sponsor 3 who sponsor 3. Things never work that way. If you want to make it in network marketing, it will not be easy. But, there is a proven path for you to follow, if you are willing to roll up your sleeves and do the work. So if you are telling your prospect this business will be the easiest thing they will ever do, stop it!
3. Deceptive Recruiting Practices: One of the things I really hate about industry is the deceptive recruiting practices that people use. Some examples might include inviting someone over to your house to see the plan without ever telling them ahead of time that you are going to show them the plan. Another example is posting a job opportunity online via Craigslist or a job listing website. MLM is not a job, it is a business, so that is lying as I see it. Another deceptive recruiting technique is using hype, lies and pressure to tell the person what you think they want to hear, or pressure/convince them into the business. These are just a few examples and one of the primary reasons our industry gets a bad reputation.
So, what can you do? Be a network marketing professional at all times. Treat people as well as you would treat your own child. Avoid the hype, lies and pressure. Contain your enthusiasm. Keep it real with people. Be honest with people. Do the right thing.
4. Average Earnings in Our Industry: By law, every company has to report their average earnings per distributor. For most companies, the average distributor only makes a couple hundred dollars per year. And the people who earn a lot of money offset the majority of the people who make nothing.
While this is true, it doesn’t paint a totally clear picture of our industry. You have to remember that 80% to 90% or more of the people who get involved will do NOTHING and QUIT the industry. And most people who quit will do so within 90 days.
In addition, they won’t use the products, sponsor any team members or get any customers. If you were to take these people out of the statistical equation, you would quickly discover that lots of SERIOUS people make a good income in this industry. The truth, as I see it, is that you can make a lot of money in MLM if you do the work and stick with it. But, if you don’t do the work, you will make nothing!
When you share the business plan with people, you should reveal the average earnings per distributor. But you should also tell them that individual results will vary. Let them know that they will get paid off their RESULTS, not their effort. Don’t promise them overnight profits or earning money for doing nothing at all.
Final Thoughts
Once again, these are just my thoughts on the MLM Ethical Concerns out there. Like any business model, we have good and bad people in our industry. My best advice to anyone looking to join our industry, is to evaluate all the facts first. Talk to successful distributors. Talk with distributors who failed. Check out the company products and literature. Do your due diligence and make an educated decision, just like you would if you were starting a traditional business.
By all means don’t take ALL the information you find online as FACTS (including my thoughts). Instead, form your own opinion. Evaluate any MLM Ethical Concerns you might have before you get involved with our industry.
And if you are currently a distributor, remember that you are an ambassador to the industry, not just your company. People will watch what you do and say, so make sure you are being honest, treating people fairly, and presenting accurate information. One bad duckling can really hurt our industry. Just remember to be professional at all times.
What are your thoughts? What do you think are the ethical concerns in our industry? Just leave a comment below to let me know what you think.
Chuck Holmes
20+ Year Network Marketing Professional
Top Earner & Top Recruiter
Email: mrchuckholmes@gmail.com
P.S. Learn how to grow a successful network marketing business. Secret tips, training, and practical ideas. Free training delivered by email.
It is horrible that people actually think they have to be deceptive in order to sell their product or recruit. The one that really drives me crazy is the get rich scheme, and still so many people fall for it! On the other hand, I love to see someone excited and pumped up about their business, but completely up front about it.
Treat people right and everything works out fine!
Isn’t it sad that there some companies that are more ethical than others? I am always considering whether or not to start a multi-level marketing business, and I am really doing my research because I want to know if there are companies I ought to avoid. Or conversely, seek out the companies that are known for their high ethics.
I want to be sure that I can stand behind my products, and also behind the service that I will be able to offer to my customers. Poor company ethics (e.g. not keeping commitments, rewarding bad behavior, etc.) might get in the way of that. I enjoy reading all of your advice on how to do my homework, and how to pick a good company versus a bad one. Thank you.
I’m glad I could help you Faye. You definitely want to pick a good company to work with.