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Vince Reed says MLMs aren't inherently scams, but their low product margins push distributors to recruit instead of sell. The real problem is the incentive structure that breeds a get-rich-quick mentality and ruins the business model.
Vince Reed says MLMs aren't inherently scams, but their low product margins push distributors to recruit instead of sell. The real problem is the incentive structure that breeds a get-rich-quick mentality and ruins the business model.
I think the problem with MLM is human nature. You ever see those episodes of American greed? You ever see that? And they're like, I got scammed. It's like you were trying to get rich for doing nothing. Like, what did you expect? Yeah, you got scammed, but nothing. You can't just make money for doing nothing. If the company consists of the majority of people just recruiting and the distributors are the customers, that's the problem. I believe if the direct sales industry, if the MLM industry had the same mindset as individuals who sell products on Shopify and the E commerce space, they would do much better. So that's why it gets a bad name because you end up focusing on recruiting because that's typically how you make the most money the fastest because the margins are so little with a lot of the products that it turns into this recruiting fast. And that's why I think it gets the bad name.
