In the following video, I go on an almost 15 minute rant against MLM (FHTM in particular).
These guys have the audacity to call their business model ‘relationship marketing’, when in fact what folks are doing is destroying relationships with their friends, family and neighbours while trying to recoup hefty investments in this so-called business opportunity.
For your $300 initial investment plus $70 every month thereafter, you get a cookie-cutter site that Google hates and will slap with a duplicate content penalty. Where’s the relationship in THAT?
In the video, I also show how MOST of the reps are making no money at all, based on FHTM’s own income disclosure statement.
The crux of the matter is that you don’t need to put out big bucks to start a business, especially online.
The model is called affiliate marketing, and for a tiny fraction of what you would invest in an MLM opportunity, you can have a real website and you don’t have to pay to promote REAL name brands.
‘Nuff said. Watch the video and let me know what you think by leaving a comment below. 
About Rosalind Gardner
My biggest beef with FHTM is the way they presented their “partnerships” with businesses like Verizon, AT&T, Dish Network, Travelocity etc. like they were exclusive. I was a marketing newbie at the time and was shocked to learn(after forking over my $300) that anyone with the right website could be an affiliate with these companies and offer the same deals and prices. I never received the promised tax documentation from them after quitting just before they forced me to pay $100 more for the privilege to work with them. Thanks for the great post and vid.
* cheers wildly * Great video, great advice, absolutely true. I’ve been vehemently against MLM since a dear friend of mine got caught up in a well-known highly publicized operation, lost everything including his marriage, and took his own life. MLM has no place in my life, and I am saddened by your friend’s loss. If only she’d talked this over with you before diving head-first into the empty concrete pool of MLM / “relationship” marketing.
With any business model, the best advice is to keep eyes open, feet on the ground, and common sense freshly polished. It’s said “if it’s too good to be true, it probably isn’t” – and that’s one that’ll save your hide and wallet almost every time.
Casey,
I’m SO sorry to hear about your friend. How tragic!!
Jennifer did think about calling me before they signed up, but her hubby was gung ho to go. Fortunately, both have realistic perspectives of what they can and cannot do and are willing to realize that better to lose $423 than another year’s worth of monthly payments.
Thanks for sharing!
Ros
Hi Ros,
I let myself get suckered into this program through a relative. At the time it was almost $500 to join, not to mention the extra stuff you need to get later on. Unfortunately I did my research AFTER I joined and also found that I could become an affiliate for these other companies as well. What really ticked me off was when I found the actual residual income on a customer’s bill was about .08 to .12 cents a month! You’re right, it’s a pyramid scam and they hide behind the residual income to make it look legitimate!
Another thing that ticked me off was that they won’t let you advertise on your own, you CAN’T use any names or logos of the products or even FHTM unless it’s with THEIR materials! But if I go to the product’s website (Verizon, Dish Network, etc.) I can become an affiliate AND use their logos and name.
So here’s the real truth folks . . . FHTM claims these companies come to them and ask to be represented by them; bull hockey! The reason WE can’t use the brand names or logos and FHTM can is because FHTM is THE AFFILIATE and we’re the sub-affiliates promoting FHTM. Why should we be sub-affiliates when we can go directly to the product website and become affiliates, are able to use their name and logos, are able to advertise the product AND make higher commissions?
Of course, they won’t tell you that they’re actually an affiliate for these other companies; they want you to think that THEY’RE giving you a great deal. Compare FHTM’s prices on these products, then go the companies’ websites and check their prices . . . they’re usually the same if not even better than FHTM’s prices. What a scam!! Like you, Ros, I DESPISE MLM’s!!! I learned my lesson there!
You have to blast this video out to everyone. This video needs to be seen. BTW, love the jester hat.
Hi Ros,
Like you I hate MLM but it is amazing the number of people who get sucked into it by the promise of instant riches. I was dragged to a MLM meeting by a good friend and I thought we had stumbled into a revivalist meeting with all the cheering and clapping. If you look at the MLM proposition with two questions in mind a) Whats in it for me and B) Whats in it for them? Suddenly you go ouch this is going to be expensive, not only in cash but how many times is your family going to buy stuff from you?
You can actually start setting up sites for nothing if you use Blogger. With there new templates you can get a really spiffy site up and running in two or three days. And use that for market testing , back links etc.
However a lot of people providing Internet Marketing tools/ training are nearly as bad as MLM as they keep promising that for a mere $97.00 you will be earning $8,734.19 within 36 hours. In my experience that rarely happens unless you are selling IM products and I have a number of page 1 sites. They very rarely tell you it is a marathon not a sprint. You wouldn’t try and build a bricks and mortar businiss in 36 hours so an internet based business while costing a lot less to start also takes love and persperation.
Johnsons Law of Money says Rewards ALWAYS come after Effort, check it in the dictionary if you don’t believe me…
I bought the Super Affiliate Handbook marketing and that started down that road, {As I gave it a plug can I get an update
}
Keep the rants coming Ros, they make great reading.
All the best
Nick Johnson
Hi Nick,
Your update is on its way.
I sent it to your gmail addy. Let me know if that address is no longer valid.
And you’re so right… it’s boggles the brain that folks can get duped into believing the overnight riches story over and over and over again. I like your ‘love and perspiration’ comment. So true.
Cheers,
Ros
Hi Ros,
Thanks for the update, much apreciated.
A question and a comment if I may – If you were starting from scratch today, with no knowledge and a budget of $75 to start an internet business how would you spend it…
The way I would go is Ed Dales Challenge series – get basic training free and use of some nifty tools to help find a niche. A domain name that you can get for about $7 if you shop around and use coupons and a years hosting at $5 per month. Put up the site using WordPress (version3 is just the bees kneess) Anything I have left out???
One comment on Internet marketing training, and I have bought a few courses and returned about 75% as they are snake oil salemen, most will say add this plugin or that plug in and unless you are computer savvy you will assume thats all you need to do. Very few will actually say if you are using All in One Seo by the ways guys and gals you should look at the bottom of each new page you create and fill in the SEO information that will assist you in getting free traffic. They all seem to want to sell the double glazing without checking the foundation is solid….
Hmmm maybe I should go on video on this subject…
All the best
Nick
Hi Ros.
I’ve done MLM twice fairly successfully but what they don’t tell you is that to achieve a monthly commission check of $4000, your expenses are going to be £4000 and you earn nothing.
A similar thing can be said about affiliate marketing where some marketers are spending fortunes on advertising to achieve these monthly checks which are gross income checks.
A more realistic proof of earnings would be the Inland Revenue Return to see how much tax has been paid and then work back to spendable income. Then you would see that only the very top tiers in MLM are making a real living income.
I think to do what you do takes a lot of study, talent and hard work. I am still in the study and hard work phase. I haven’t found the talent yet.
Over the years I’ve found half a dozen or so marketers that I listen to. You are definitely one of them.
Take Care
Richard
Hi Richard,
Thanks very much for the kudo and for sharing your MLM experience. No doubt with your success in that model, you won’t have too much trouble finding the ‘talent’ to make affiliate marketing successful as well.
Best,
Ros
I am just now reading the Super Affiliates Handbook and I live in Australia. I was involved in a well known MLM in the 80′s/90′s and did not make any money – I scared off a lot of friends and relatives with that. From what I have researched and read so far, the choice looks like a “no-brainer”. I can’t wait to get started on my AM business.
Hi Rod,
And I wish you the very best of success in your affiliate marketing endeavours! Work hard!
Cheers,
Ros
Hi Rosalind
MLM was and always will be a flawed business model.
It’s very cleverly packaged and often hooks in people who are desperate.
As business models go there is only one way that MLM could ever really work. A business using the MLM model will have to fulfill all these requirements;
Decide strategically to only ever sell it’s product via a Network
The product must be unique with no other competitors
The product must have a natural and repeating demand IE regularly consumed
Individuals must be stopped from promoting the product any other way other than through their downline
In reality most if not all MLM products are not unique and if they ever were it doesn’t last long because a competitor will spring up with a better product, more value and a better distribution model!
Many MLM companies will not permit you to sell the product other than through your network. Even if they do allow you to sell direct your price is going to be artificially kept at a certain level.
I have in the past tried MLM and was sucked on the the hype and rah rah chants. Ultimatley my business brain did actually click into gear and I will never go down this route again.
Possibly more telling was a meeting I had with an Ex Amway Diamond distributor. He said the whole business was based on a myth. Yes, he made a lot of money as a Diamond level person but this was sucked up by all the costs associated with the business.
He was revered by his down-line and by his peers but ultimately he couldn’t live with the lie and false promises.
What people often don’t realize is that most MLM companies fail. They start with huge enthusiasm but ultimately die often very quick deaths.
There are one of two that have been around for a while. Selling health/vitamins does seem to be working from a business standpoint even if the health claims are dubious.
Humans are often not very good at making the best choices. Worse than that is we will often go to extraordinary lengths to support a bad decision.
I have been reading some very thought provoking books is this area and would recommend;
“Mistakes Were Made (but not by me) Why we justify foolish beliefs, bad decisions and hurtful acts” by Carol Tavris and Elliot Aronson.
Wishing you all the best
(A thoughtful) Steve
Steve.
Thank you so much for your thoughtful and detailed reply. I especially appreciate the points you make about the fact that MLM’s most often fail and that you shared the comments from the ex-Amway fellow. ‘Myth’ is definitely a word I would use to describe the model.
Thanks again,
Ros
I wonder, if you did an income analysis from people who are affiliates, what the result would be. Income over expenses and income vs time input.
I have a funny feeling that more than 30% are paying more than they are making.
And, I think that people have been suckered into paying tons of $ to promote their affiliateship
Just look at all the programs, memberships, softwares, etc. out there.
Only a small number of affiliate marketers are making anything near their worth, in comparison to time put in to their business.
I am thinking that, probably there is a bigger chance at someone making an income in MLM than in affiliate marketing.
Ros,
Your friend needed an didn’t seek advice. I am thirilled that someone has the guts to speakout about some ripoff so called business opportunity. There are too many people getting ripped off everyday and a great number of them are with MLM’s. True there are some MLM’s that can be a good business if done correctly; but for the most part no way hosea. Thanks for speaking out.
Rosalind,
I totally understand how you would hate mlm based on this particular company. But not all MLM is bad. You definitely need to look at the product before you sign up and make sure it’s a good deal and a product people want. Also, do a search for “mlm company scam”, and insert your mlm company’s name. And most savvy network marketing internet marketers know that, at the minimum, they need their own hosted blog to drive traffic to their replicated website.
I would just say that whether it’s affiliate marketing or network marketing, do your homework before handing over your credit card!
Multi Level to me is nothing but BULL CRAP and should be avoided like the plague. I joined a program similar to the one in your video not realizing that the companies also had affiliate programs of their own.
Stay Away At All Cost,
Kenneth
You show proof, as a top affiliate marketer that money can be made, and the top Reps of MLM show proof that money can be made
So basically, you both have that in common.
Rosalind, do you think that most affiliate marketers make money? Don’t
you agree that an affiliate marketer’s expenses could even outdo that of an MLM rep? Like domain names, websites, hosting, adwords, cpc, cpa, and the list goes on and on.
Look at how big the market is for: eBooks,reports, blueprints, secrets, don’t forget the many secrets that need to be purchased, memberships, launches and software for affiliate marketers.
I am betting that on a percentage basis, you have more chance making money as an MLM person, than as an internet affiliate marketer.
The cost is not in acquiring the rights to sell the product, rather, the cost is in the actual process of selling the product.
Rosalind, how about the affiliate marketer that is not making money, we both know there are lots and lots of those out there. Don’t hide them please, they also exist. At least in MLM marketing, the figures of the lowest earners have to be disclosed. Not so in affiliate marketing.
Hi Ruth,
Any business requires a lot of hard work to become successful and as with anything else in life, only a very few will achieve uber-success if you will.
My point is that affiliate programs cost nothing to join and very little to promote. A domain is $7.95 per month and I do almost no advertising because I run blogs, which the search engines love. Moreover, I put the promotion up once and it makes sales 24/7 after that — which is impossible with MLM.
My biggest issue with MLM (FHTM in particular) is the fact that most of the earnings (for the company) are generated through the acquisition of new members, not product sales. I think that that’s a really scammy business model and that there are better opportunities out there for people who can not afford to shell out the big bucks simply for the privilege of promoting products that most people really don’t want.
Cheers,
Ros
In “related posts”, I read about Jeremy’s New Affiliate Marketing Strategy. I wanted to view his video but it could not be found. Is there another link available to view an updated version?
Thanks
Mikey
Hi Mikey,
Thanks for pointing out that the video is gone… I see that he has also removed his site / training program. I do know that Jeremy was getting involved in a big venture, so I suppose he felt that he didn’t have enough time to dedicate to his students.
Cheers,
Ros
I agree with Ruth and her comment that you have to spend money to be an affiliate marketer, too. Back in the early days, it wasn’t that necessary to do PPC but now, with so many people competing for the AM dollar, you’ve got to spend advertising money. And depending on the product, it can get very expensive. That’s something that the gurus don’t tell the newbies.
The truth is, whether it’s mlm or affiliate marketing, it’s a marathon, not a sprint. Educate yourself before jumping in and spending money on something you may not completely understand.
And I don’t get where Steve gets the facts to back up his assertions:
“As business models go there is only one way that MLM could ever really work. A business using the MLM model will have to fulfill all these requirements;
“Decide strategically to only ever sell it’s product via a Network
The product must be unique with no other competitors
The product must have a natural and repeating demand IE regularly consumed
Individuals must be stopped from promoting the product any other way other than through their downline”
Huh? Says who? READ your mlm’s policies and procedures before joining, and NEVER join a company that won’t let you promote your products any other way than through your downline. MLM products can compete just like any other product in the marketplace, by showing their value through features and benefits.
MLM has grown up since the 1980′s and yes, it’s possible to make money with this business model if you approach it the right way.
Hi Eunice,
Thanks kindly for getting in touch! Re your comment:
I must disagree. I did PPC extensively in the early days, but now with the way blogs are loved by Google, I do almost no PPC advertising.
Cheers,
Ros
Hi Ros
First off, thanks for all of the tips you’ve given me over the years. I had to leave a comment on this one as I am heavily involved with a MLM right now. Most of what you said is correct. There is only a small % that actually make money in MLM (can’t the same be said for affiliate marketing?). I joined my first MLM 2 years ago not for the business but for the discounts on products as I was using them already. I put to use many of the tips I learned on your site along with some off line things and am now doing it full time.
The problem with the MLM industry is that many companies don’t have a established brand name first. So everybody thinks its a scam. Then there are the costs (Doesn’t affiliate marketing have costs too?). The one I joined was under $40 to sign up and has no purchase requirements.
It is true that many people think they will get rich and they quickly find out it is not the truth. It takes work!! What turns many people away from MLM’s is when somebody says the word business along with their products. I don’t even talk about the business to people for two reasons. I want them to try the products first and when you bring somebody into the business you need to train and motivate them. That’s a lot of work. I would say that 90% of my income comes from my customers. The other 10% comes from my customers who really enjoyed the products and now want to do the business.
My MLM is with a company who had been around for 10 years before starting their program. They advertise their products (the main one is the P90X workout) all day so its easy to talk about. The MLM business model only works if the person cares about the products. If you care about the products then I would do MLM over affiliate marketing all day. Reason being is you get to keep the customers name (like you having me on your newsletter) and earn future commissions on them while only having to work once on acquiring them. With affiliate marketing you have to work everyday to get new customers and then you send them off to the company you partnered with.
There is a lot of garbage MLM’s out there but you can’t knock the whole industry as there are good ones with good products ran by great people.
Thanks
Brad
Hi Brad,
Thanks kindly for your thoughtful, informed response.
Looks like you got involved with one of the few ‘good’ MLM companies and have exactly the right attitude to make the business work for you, i.e. really caring about the products that you use and promote.
I must disagree with your point about having to work all day to get new customers as an affiliate marketer though. That’s why I always stress the need to build your own list, to bring folks back to your site to check out new and relevant products.
Keep up the good work!
Cheers,
Ros
I agree with you that alot of MLM’s are scams, but on the other hand there are alot of good MLM companies as well.I believe that could be true in any field. There is good & there is the bad.
MLM has been our family’s sole income since 1996. The companies that we align ourselves has been in the health & nutrition field. We are very product focused. Also, we personally don’t approve of companies that sell imaginary products (like ways to save money).
We got into MLM at first because of personal health issues. Someone recommended a product to us that was manufactured by a company who sold it by MLM distributors. Only after seeing a difference in our lives by taking these products, did we start recommending the products to friends with similar issues.
Next thing we knew, we got a check in the mail. We weren’t even trying to earn any money. We didn’t at that time know what MLM was. In fact, within 6 months our (referral) check equaled my husbands paycheck from a cash register company that he owned.It was at that point we decided we better check out this company further to make sure everything was legit before we started recommending it as a way to earn an income.
Long story short, we sold our company, and have been earning an income only from MLM since. And the products we take and recommend are only products that have made a difference in our personal health.
So what we always tell people is before you get involved with any company or opportunity, is take responsibility. Check things out. Use the internet to look into the company’s review with the BBB, the owners review, the products review, etc. Does the company make a reasonable request (like they require you only to purchase a small product amount that you would naturally use that month anyway), to earn an income.
If after doing all this homework, & you are uncomfortable in any way, don’t join it. And I personally feel that should hold true for any opportunity-whether it’s MLM or Affiliate Marketing (which I also believe in). By the way, I am studying & have started affiliate marketing (Thanks to your great training), but I’ve yet to earn a cent from it. Hopefully that will change soon.
Hi Ros
I was ripped of to the tune of £300 pounds by a company that use to go under the name of Fast2Net. The way the scam worked was to snail mail people like me. Who had no online experience, and no computer at the time.
I then read about how I could own two fully functional websites for £150 Both of these websites turned out to be crappy replica websites, that I later found out I could have got for “FREE”
After I purchased my websites. I was told how Fast2Net could also send me instant traffic for a small fee.The small fee in question cost me another £150 for 6000 hits.
Needless for me to say that I made zilch from their so called targeted traffic.
The way that I see it is that, whether you do MLM of Affiliate Marketing. There is always a small chance that you might get ripped off. All you can do is learn from it, and move on.
QUOTE: “Does the company make a reasonable request (like they require you only to purchase a small product amount that you would naturally use that month anyway), to earn an income.”
This is ILLEGAL in almost all countries, including the USA and Canada. Not just in MLM, but in any kind of incentive or reward program, including so-called “closed” affiliate programs that only allow customers to earn commissions.
More info (including examples of laws) from http://isitapyramid.com/affiliateprograms.php
I’m not here to debate that. You might notice that is one of the questions I said to ask.
I suggest if persons has questions like this they can take it up with Rod Cook, President of the Distributor Rights Association or Mr. Joe Perry, a prominent lawyer in Texas, who is just in the process of forming a MLM company.
There are plenty of resources out there for people to find out whatever they need to make a wise choice, such as your site, and not get involved with any scam.
Ros, that was a great post and you are a beautiful woman.
The reason why MLM is most of the time a legal “scam” is because it is extremely difficult to bring enough to customers for the service by itself value while bringing generous commissions. Most of the time, the focus is bringing more people in instead of enjoying the service itself.
Hi Andres,
You get extra points for flattery!
As to MLM the legal ‘scam’, I wholeheartedly agree!
Cheers,
Ros
Ros,
I have been a traditional business owner for over 20 years and have been looking into online marketing as new form of advertising for my company. So I have seen the good and the bad with affiliate marketing… and have spent a lot of money in the process. I also know a little about MLM’s.
To group all MLM companies as one would be like grouping all affiliates with the shady ones. I know both affiliate marketers and MLM’ers who have made money and lost money. I know affiliate marketers that are making good money, but most of the affiliate marketers I know are not making much if any money. I spent 3 days in Vegas at an affiliate marketing summit and most AM’ers I met there were not making money… Some after more than a year. And the affiliate “how to” scams are everywhere. It seems that they give you just enough information to feel good about the product but then you need to spend another $$$ to find out the the real secrets… can you say “sales funnel”. Then 3 months later they are promoting the newest, greatest system and to really succeed you need to join this tribe or that mastermind. I have been study online marketing for a while and like many have been frustrated. I know there is a hand full of affiliates who are making money. But as many have said, it is a marathon, not a sprint so most will not find success in affiliate marketing.
I do want to add that I know a lot of MLM’ers who HAVE made money (some have made big money). My wife is one of them (well descent money… replaced her 54k a year job…). She worked hard for a year and a half but it paid off. It is a business and must be treated as such. Most… 97% will fail because they do not treat it as a business. They are employees and have no idea how to be in business and should not try. They need a boss to tell them what to do and how to do it. And then when they fail it has to be because it is a bad business or business model. When the real truth is… they failed… not the MLM business model. As with any business most will fail. The same holds true for MLM. Every year 95% of the business created will have failed within several years. There are a lot of franchises that fail… is that a scam too?
Bottom line… be fair… as in all business there are legit companies and there are some that fall into a gray area and some downright dishonest companies. As with any business deal it is up to you to check out the validity of the company / product and there are plenty of resources for that. But the truth of it is MLM is not for everyone. Only the strong (or persistent) will survive… just as in any business model… including affiliate marketing.
PS
I will figure out this affiliate marketing stuff too!
Hi Eric,
Totally agree. You definitely need to separate the wheat from the chaff.
My biggest argument with some MLM’s (such as FHTM) is the big enrollment fee and the push to get others enrolled, rather than promoting real products.
Cheers,
Ros
@Eric , I couldn’t have said it as good (I tried though:)
I personally know more affiliate marketers that failed, than mlm’ers that failed. As a matter of fact, I know honest, descent, hardworking people that made it in MLM. And they are earning a decent income.
I personally know many that make over 500,0000 to a 1,000,000 / year, and these are very nice family, community people ready to help anyone willing to work.
These were the first ones to step up to the plate when a catastrophe arisose . And,they do run a business. As Eric said, that’s what makes them successful, and no, they are not scammers.
Hi Ruth,
I would suggest that you are the exception to the rule.
I personally know MANY successful affiliate marketers. Just go to Affiliate Summit and you’ll see that there are over 200 speakers… all of them successful affiliate marketers who DON’T need to pitch (aren’t allowed to pitch) their personal businesses at the event because they promote real products.
I have no doubt that there are great MLM’ers, but as I’ve said before, the model with certain companies is all about the company, not the people.
Cheers,
Ros
Dear Ros,
200 out of how many that are in affiliate marketing
I know over 200 that failed Ros…. that’s not many in the big pot of marketers. Ros, you hang out with the successful ones, you don’t see the misery, the hurt, the agony of those (there are many) trying for years to be successful.
Hi again Ruth,
You’re right in part.
As for those who don’t make it… What I see are people who want everything but don’t follow the most basic advice that I give, i.e. follow their passion, talk about what they know, start their own blog on their own domain and build a list. Basic stuff – but it seems everyone wants to promote what they think will be profitable (i.e. Internet marketing products), instead of what they really care about.
Cheers,
Ros
ps
I do need to say that in my life of marketing, I only have a handful of those I listen to and follow and read. I look forward to your newsletters, posts and read every one of them.
I like you, I like how you think, and how you operate…so I don’t want you to get the wrong idea here about me.
You have always been one of my heros, and someone I can totally trust!!
Hi Ruth,
Thanks for that, and I do appreciate you and others who call me to task on presenting the ‘whole’ picture. So no worries, OK?
Hugs,
Ros
OK,
That’s great