How to spot a Multi-Level Marketing (MLM) in Malaysia?

There are many who have been approached by MLM representatives, with promises of great returns. Everything is presented perfectly, and often without the mention of any losses; from the initial deposit, the ‘guaranteed’ profit to the processes involved. The general rule of thumb is, if it sounds too good to be true, it probably is. But, before you turn down the offer of a low risk investment, learn the characteristics of a MLM.

1) The opening line to invite you will be along the lines of, “I have a great business opportunity for you” or “Invest a little and become a business owner in a few minutes”. There is no real business opportunity without risk. It also takes time and money to set up. But being a business owner in a few minutes? Definitely sounds too good to be true.

2) If you were to ask, “Is this a MLM programme or pyramid scheme?” be prepared for the answer “NO”. Most representatives do not disclose that they are indeed asking you to enrol into a MLM programme since there are many people who are wary of investing money in a MLM.

3) More often than not, the people who approach you with MLM opportunities are friends or family. The MLM business works on a hierarchy, the person who joins the programme will then have to recruit other people as his ‘downline’ to do all the selling. Since it is difficult to persuade a stranger to part with his money, the easiest people to recruit for MLMs usually are friends or family members. Also, it is relatively simple to set up a ‘business appointment’ with people you know.

4) In cases of family and friends, your relationship with them will be at stake if you do not sign up for the MLM package.

5) A carrot will be dangled in front of your face to entice you further into enrolling into the programme – do you want to drive that luxurious dream car and own a triple-storey bungalow within the next two or so years? There will be promises of a fortune, in a relatively short time.

6) There are claims by these representatives that someone famous endorsing or using the product, be it a celebrity or politician.

7) You will be given the example of a person who made it ‘big’ in the business, and with very little work and has already have X number of people in his downline to ‘make his money for him’. In certain cases, copies of cheques showing a high income will be shared.

8) Their marketing efforts make the business look like it is easy to run and is indeed successful as the “product is great, it will sell itself”. No product is ever going to sell itself, that’s the bottom line.

Money does not grow on trees, so ensure that you are putting money in a legal business where the risks suit your appetite and you will not be at danger of losing your money or friends/family. Remember, if you have pay anything up front before starting a job, you are a customer, not an employee. Therefore, invest wisely.

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