Wealth of Advice

By Francisco J. Colayco

An email I received:

A close friend is recruiting me for his MLM (multi-level marketing) business. I did my own research. I found out that unlike Pyramiding (the scam mentioned in your book) where there is no actual product involved, MLM businesses provides its customers with products.

When my friend presented his business, he started by describing the benefits of the company’s health products. One can make money in retail but he emphasized networking and recruiting more. He showed me how I can make a million pesos in a year. He said now is the best time to join because their company is in the pioneering stage so I’ll be one of the people on top of the network. However, I started to be a bit skeptical when he mentioned the high joining fee of G1 (Php 8,900), G2 (Php 17,800) and G3 (Php 35,600).

How will I know if this MLM business is a scam? What do I need to check for? They have no financial statements since they’re in the start-up stage. How can I check if this business is legit and make reasonable returns without losing my investment.

My reply:

You are right that MLM can be a legitimate business. Please carefully review Chapter 17 and Appendix A of my book “Wealth Within Your Reach.” If you take the advice and answer the questions truthfully, you should be able to decide for yourself if you should take it or not.

Big future promises are tempting but these may or may not come true. In this case, it seems that you will make more money from recruitment rather than the actual selling of the product. This is a kind of a red flag for me. It is therefore very important that you really believe that the products are really in demand and are correctly priced before you even start selling them. MLM is only a marketing system. There is no guarantee for success. In the end, the company behind the product and the system must be adequately capitalized and able to assure production and quality of its products over a long and sustained period of time. And even assuming that the principals behind the company are dependable and financially capable, you yourself must be capable to organize and build your own personal network. This means you should have a lot of contacts, a lot of time and passion and finally a good ability to communicate and convince.

Join us for our Pisobilities Seminar on March 20 at our office at Shaw Blvd, Pasig City. Call 637-3741 o 6373731 or visit www.colaycofoundation.com for details.

 

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