NETWORK MARKETING
Multi-level Marketing : A pyramid of scheme ?
By Denis Mbau
There is a high chance that some of you have attended or heard about the famous GNLD meetings . I have , about ten years ago when me and other opportunity hungry youth met to be advised of how our lives would change by joining the program .
The advert had said they wanted hardworking individuals who would be earning 50,000-200,000 per week . I was then in university , barely making ends meet and one of those who badly needed a break .
The meeting was jubilant , the atmosphere ecstatic and energies were sky-high . The downfall for me was a commitment fee of Ksh . 3,600 , which I didn ’ t have ( but wanted ), so I let the chance to change my life slide .
Some of my comrades who could afford the amount signed up . However , many months and years down the road , they had dropped the venture . It was not as green as they had hoped . They were stuck with drugs they did not need or sell , debts and foiled relationships with their kindred . They did not want to talk about it .
The marketing structure used by GNLD and many other entities of their kind is what we call Multi- Level Marketing ( MLM ). It involves the use of word of mouth and direct sales in selling products to the public .
The key goal of MLM is to promote the maximum number of distributors for the product and exponentially increase the sales force under them . For example , during that training , we were told to bring in our friends and relatives to the program as it would guarantee us more sales .
The individuals who venture into MLM get commission on the sale of the product , as well as compensation for sales their recruits make because the commission is paid to individuals at multiple levels when a single sale is made .
“ There lies a thin line between truth and reality in regards to the validity of Multi- Level Marketing and pyramid schemes . While we may not necessarily use multilevel marketing as a synonym for a pyramid scheme , it ’ s a marketing model purely stacked against the distributor ’ s favor . ”
This may sound like a pyramid style arrangement because it actually is . But is MLM a pyramid scheme or just embodies the structure ? There ’ s a thin line .
Pyramid schemes are very familiar with Kenyans and consist of fraudulent conspiracies often disguised as an MLM strategy .
However , the difference is that there ’ s no real product for sale .
An example is DECI , a pyramid scheme that defrauded Kenyans an estimated Ksh . 2B in 2006 . About 90,000 gullible Kenyans had invested in DECI and the majority of them lost all their money when it collapsed .
The trademark of these schemes is the promise of extremely high returns in a short period for doing nothing other than handing over your money and recruiting others to do the same .
The pandemic has dealt a big blow to many families and it ’ s getting harder to put some food on the table . This has pushed Kenyans to search for low-lying opportunities to keep them going .
MLM firms have provided this easy way out because they barely ask for any qualifications and never turn you away , well , unless you are like me then , and you have no registration fees .
There ’ s also the likelihood that you ’ ve seen young men and women carrying boxes full of utensils in town , well they are not attending a cooking show , that is another MLM on the rise .
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MAL 44 / 21 ISSUE