Straits Times Forum, Dec 30 2003
Dangers of multi-level marketing
I ma writing to raise awareness of teh recent rise of multi-level
marketing firms that may engage in underhand or even illegal
tactics.
Several weeks ago, I attended a seminar on multi-level marketing in
Shenton Way. During the seminar, the audience, mostly teenagers,
were subject to what could be tremed 'brainwashing'.
They were inundated with fantastic claims of paths to riches, using
a gimmicky prsentation style which involved loud cheering and
enthusiastic clapping from staff. At the end of the seminar, which
focused almost exclusively on the cost of livingand how the company
can help one achieve one's dreams of material well-being, I was
left bewildered. Thre was absolutely no mention of teh product they
were selling.
When I questioned this, I was told: "Does the product really
matter? I could go on and on about the benefits of aromatheraphy,
but what is important here is our marketing technique."
As it turned out, this marketing technique closely resembles
pyramid selling. To join the scheme, you pay a fee to buy an
aromatheraphy product. For each person you sell more products to,
you receive a commission. And for each sale, the person who got you
to join the scheme receives the same commission.
The chain continues ,with more people pulled into the scheme, and
those on top getting rich quick.
What is suspicious is first, the focus is on the sales method
rather than the product. Second, they seem too eager to impress the
audience and the potential customers with flashy presenters and
pushy marketing.
Third, the commission structure is strange, to say the least. The
commission is the same for the person who sells the product, and
the person above him in the chain. This means those higher in the
chain can simply live off the fruits of others labour. It
encourages continuous selling until there is no one left to sell
to.
I hope to draw attention to such schemes as the amounts involved
are not small and those who join later will definitely be left
disappointed.
As such scheme proliferate, I hope the authorities can clarify what
is legal and take action against any perpetrators who are engaged
in illegal activities.
Leow Zi Xiang
