Sunday, February 26, 2006

Network Marketing in Singapore

This is an unusually long post, because I have spent a long time, $200, and nearly my friends investigating this phenomenon.

There is a worry disturbing my thoughts, and it is not just about money.

Network marketing place themselves as a money-making venture that allows one to "own a business" with relatively low start-up costs. These companies can be selling products ranging from plain tupperware, to expensive massagers. Their business models are all common: to get as many people to join in as distributors, thereby expanding the company's reach and influence through the word of mouth, saving immensely on the costs of traditional advertisement.

I am not against network marketing per se, but I would like to draw any potential wannabe's attention to some important details, that you might have overlooked, and to caution you that a decision to enter network marketing is not one to be made lightly, unlike getting a job.

Over time, as I was in my youth, my friends have asked me to go to no less than 3 different network marketing opportunities. The very first time was during my post-secondary school days. My best buddy called me one day, and asked if I was interested in taking a tour of his company. I was intrigued, since he had not mentioned anything to me earlier (not even to your best friend?), so I agreed.

Dressing in my most indecent (t-shirt, shorts and an extremely run-down pair of sandals, to be exact), I strolled among the massive crowd waiting for the out-ward bound trains to get home. 6 pm, to be exact, and he promised me to have dinner together after he was done with his stuff. Minutes later, he appeared, and we chatted normally, complete with the horseplay and all, until we reached a small entrance in the middle of a long row of refurbished shop-houses.

"This is it," he said, and we entered.

I felt very naked to see many people milling about dressed in ties and long-sleeved shirt, some even complete with jackets. The air-conditioning seemed to have been conditioned to enable them to work with so many layers of clothing, which I really doubt would be their attire if they stepped out of the place, which looks a little bit of a facade. I squirmed (dumb decision not to wear jeans and shoes) and shivered in the artic air.

After chatting with my friend for a while, one of the extremely over-dressed guys came over to us and introduced himself:

"Hi, I am XXX's mentor. Do you know why you are here?"

Completely in the dark, I shook my head, completely dumb-founded.

First, he talked about the weather, how humid it was, and that he could not really take the heat. I shivered in response.

Next, he took out a stack of plain paper, and began to draw on it.

"So, pkchukiss, what do you wish to achieve ten years from now?"

"Erm.. World peace?"

"Ok... World peace, and?"

"Start a business of my own..."

"A business?"


"Selling what?"

"I don't know. As far as I know, this is still too early to think about what to sell."

"How about money? Do you like money?"


"You don't like money?"


"But you use money, right?"


"So you still need money right?"

"I guess you can say that.."

"How about some financial goals?"

"Financial goals, like what kind of stuff you would like to have within the next 5 years?"

"Maybe a small car, and some money."

"How much?"

"Just some savings."

"How much?" (Alright, that sounds pushy, and being the obstinate Ox in the chinese zodiac, Leo sign and Taurus sun sign, I dug in. Funny how much trust I place in unsubstantiated predictions by star-gazers, eh?)

"Tell you for what?"

"So that we can plan your financial goals."

"I don't want to."

"But you will still need it?"

"Not with you."

"Why? I am XXX's friend, and we want to help you!"

I stared back at him.

"Ok, I'll go over the proposal, and you'll see why it is important to plan your financial goals, ok?"

And he went through his speech, which was as standard as what the other 2 companies that came later put me through.

In case you are mistaken: no, network marketing is not something that cannot be done. Indeed, the model of network marketing stemmed from the earlier days, where housewives gather together to share useful products to improve their lives. Companies capitalised on these "auntie gatherings", and enabled these ladies of the house-hold to earn some extra money in their spare time.

The model still survives in some form today. However, it has undergone some additions: the pyramid scheme.

We all know that pyramidal schemes are illegal. They rob from those who enter the scheme late, and those at the very tip get enriched like a reverse funnel, channelling money from the late-comers into their neat little pockets.

The new network marketing companies are those that infuse both elements into their model, which tends to fudge the reality between truth and fiction. Some of them escape the ban on pyramid schemes by proclaiming them to be multi-level marketing companies, which has only recently been made legal.

All of them promise visions of wealth, and buckets of money. They draw you diagrams of money growing exponentially with more downlines (people who you join under you).

It isn't all a lie. What they proposed do actually come true — if you ever reach those levels they tell you, which if looking at those university students struggling is any indication, is going to take some really lot of work. However, looking at what you stand to lose in the process, many people falter, and fall out of the schemes, which in turn leads to free money for those companies.

What do you stand to lose?

  • Relationship: Your friends and relatives' trust.

    As a network marketer, you fudge the truth to get them down to the company to hear their pitch, sometimes even to the extent of lying. This isn't really good for the relationship between both of you.

    You will also be using tactics to manipulate, and target your own friends and relatives, to bring them closer to closing the deal. Your mentor might also resort to lying to create false impressions to incentivise you to join the company, which is rather pretentious.

    The end result: Your friends avoid you like plaque after your sales pitch. Sure, you meet new friends over at the company, but do you really regard them as friends, or fellow opportunity grabbers? Consider: would you trust a group of people who lie to their own relatives and friends to be there for you when you are down and out?

  • You will end up spending your spare time at the company, pulling in new recruits. You will create a profile of all your contacts, classifying them into whether they are susceptible to influence (easy to close), or rich (a better target to close the sale). Then you call your prospects, with an excuse of "visiting them". That is, if you can bear saying that excuse, with your product demo and brochure in the sales kit in your hand.

  • You end up putting money up-front: of what use is a sales pitch if you cannot be a personal testimonial to the product's effectiveness? You would have to buy one set yourself, which depending on the product, could cost you from a few hundred to a few thousand dollars. If your mentor (upline) pays for you, that makes you even more indebted to him, and be obliged to work in the company, even if you sincerely are not interested.

I still remember how I still joined one scheme even though I was not interested in doing network marketing. These companies try to make you think that you have to do it, even if you hate the idea. They encourage you to try it out.

The bottom line is, humans don't last doing things they dislike. If you won't even be interested in the project, why waste effort, time, money on something that hurts your personal relationship with others? Its obvious that these companies don't sincerely have your interests at heart when they insist that you join them. The adage still rings true: Follow your passion, and the rest will take care of itself. I dare say BadAunt is a really good example: her passion is in teaching, and now she leads a far happier life than if she were doing what she actually disliked. Isn't it true?


Blogger averilchan said...

Go into the Lingerie business... Its freaking good money!!! Hmm...

Sunday, February 26, 2006 9:42:00 PM  
Anonymous K-Craze said...

Yeh man, may all those who lie to their friends and relatives and cheat them of their money burn in hell sia. People who engage in this business normally engage their friends and relatives to either buy from them or work under them, resulting in them having to join this vicious cycle of having to find people to work under them or buy things from them, causing hurt and bringing trouble to those who are close to them. Only those who find only outsiders who are willing to buy or join them are considered decent at the very least. The rest can just eat shit and die.

Sunday, February 26, 2006 10:09:00 PM  
Blogger Pkchukiss said...

I got dragged to MLM "proposal meetings" 3 times, and I don't want more of it to happen!

It always seem to be that they ask you out for lunch/dinner without telling you about what they are about to do.

Then they spring it on you, using various tactics to get you to go upstairs to their company.

Usually, the eatery of choice is also run by the company. This sort of lying is what I do not want to do to my friends, therefore I decline to join all MLM "opportunities".

What's the use of cars and money, when you lose your friends, right?

Thursday, March 02, 2006 10:40:00 AM  
Blogger Pkchukiss said...

I know absolutely nothing about lingerie; except that girls wear it. Maybe I should watch the chinese movie: "Ultimate Brassire"?

Thursday, March 02, 2006 10:41:00 AM  
Blogger Badaunt said...

Yes, it's true!

Bravo! Brilliant post.

(I should have read this one first.)

By the way, I thought you hadn't been posting recently, and FINALLY realized that I hadn't bloglined your new blog - and now I find you have a new NEW blog. That's why I'm only now catching up...

Friday, March 31, 2006 6:45:00 PM  
Anonymous Nicholas said...

Hi My name is Nicholas and I am a network marketer. Many things that you have stated in your blog about the industry is true and I agree on some points and at the same time disagree with others as you you may have been misinformed. Im starting a blog for Network marketers in Singapore with information on this industry for those who want to know more or are new to it. Feel free to browse for information or you could ask me qustions about anything anytime.Oh yes, I promise not to ask you out for lunch and spring a suprise on you cause I too do not beleive in conning people into something they do not want to do.


Friday, June 30, 2006 4:49:00 AM  

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