MLM systems are all around us - sometimes visible as with AVON, AMWAY etc. or less visible as with various insurances, banks, funds and even charities.
There is a strong demand for systems that provide additional income to clients - and why should consumers advertise brands and pay through their product purchase without receiving any reward whenever they bring in more clients. Why paying landlords for high rentals in shopping malls if consuming and referring similar products can produce an additional income for yourself.
Since the mentioned systems became very successful during 'good times' the question is how many more will be attracted by such systems when economies are suffering and the need for additional income streams is rising.
MLM might be more in line with human nature as are other systems which explains why internet blogs are successful where consumers look for 'independent' opinions and testimonials and let such influence their purchase decision making.
MLM offer both:
1. trusted opinions and testimonials regarding products
2. additional income streams
Yet it is true that the MLM market is full of gangsters and H&R experts (Hit & Run) - all exploiting the greed and need of consumers.
Good examples are so called Binaries which are fortunately not allowed here in HK but still account for the biggest share of MLM's around, promising fortunes and delivering very little or nothing in return and often even come with mediocre and overpriced products at most (I would not completely exclude the a.m. 'big' names from this statement).
Since legislation has a difficult time following up on and testing the various new binaries in the markets there will still be many of bad systems around for the time being but some simple advise might help:
1. if it sounds too good to be true it might be
2. if the guys who did the system seem to be the only ones who understand it - leave it
3. if commissions are attached to conditions that have nothing to do with actual sales (i.e. symmetrical distribution of referrals) - leave it (physiognomy has little to do with sales - so don't worry if your left leg is shorter than the right one ;-)
4. check the products - in the end its about products and how happy people are with them
MLM are a way to support people, to enter markets more efficiently and to create a higher level of customer loyalty than traditional systems can. There are good systems and products around and asking the above questions and raising awareness will help to sort out the bad apples and potentially create a better life and independence for many.