Multi-level marketing targets Filipino community in Kuwait [Kuwait Times]
(Kuwait Times Via Acquire Media NewsEdge) It sounds like the perfect plan. Invest a little money, buy some product, recruit your friends and watch the money flow in. But plans can often fail and in the case of a multilevel marketing proposal making the rounds of Kuwait's Filipino community, they are more likely to leave the investors broke and bitter.
Thirty-three-year-old Maya thought the idea of 'multilevel marketing' (MLM) sounded like the quickest way to a better financial future. "I joined and paid cash to become a member. I thought I was going to become a millionaire because that was the initial promise of the group who recruited me. But I got nothing," she told Kuwait Times. A mother of two kids, Maya was recruited in Ramadan 2012 and initially paid KD 70 to buy products that she would then sell to family and friends. "In every package, you will receive multivitamins which promise a miraculous healing power of sorts.
At first I was unconvinced, I looked for more proof, I asked them to provide the approval by the Bureau of Food and Drugs in the Philippines, with regards to multi-vitamins and they showed them all to me. They also showed some licenses and testimonies of people whom they claimed to have been miraculously healed by the multi-vitamins.
Then they showed me some of the beauty products and slimming products. Those are the reasons why I was interested in the first place. So finally I was convinced and waited for the income to flow under my name. But nothing has come so far," she explained. In total, Maya bought five packages, spending KD 350, little of which she ever recouped.
Way of earning income? Hundreds of young Filipinos, many of them women earning salaries of less than KD 100 a month, invest in MLM as a second way of earning an income. The idea is simple: Buy the products the MLM company is selling and then sell them to friends and family. Meanwhile, recruit others to buy and sell and earn a percentage of their sales as well. For Maya, the experience has been bitter. She said she worked hard and followed the business plan of the company she joined but the leader left (for Philippines and never came back) so she failed to recoup her investment. "I didn't get my money – I didn't earn anything from it. I used their products which I don't even know really work or not.
It was a waste of money and effort," Maya told Kuwait Times. Many of the MLM company representatives in Kuwait are not employed by the company back in Manila but are recruited through the process known in the MLM business as people's network. Mila had a similar experience. She joined in hope of making extra cash, but got nothing after months of hard work. "I bought seven packages because they said the more you invest the more chances to become a millionaire. I believed them and spent KD 500, but I didn't get anything in return. I just wasted my money," she said.
Operating illegally Some MLM companies are operating in Kuwait through Kuwaiti business partners. The Kuwaiti company applies for a license for the products. However some of them are operating illegally. "In the case of my MLM company, we have a license to operate in Kuwait. All of our products are licensed and verified by the Ministry of Health," said a Filipina MLM partner company in Kuwait who spoke with this reporter on condition of anonymity. But other companies operate illegally. Some of them ask for a considerable amount of money without any products. Anyone planning to get involved should be sure to find out if the company is properly licensed and reputable. The MLM business usually recruits people through direct selling or people-topeople contacts or holding seminars and workshops. Recruiting people happens through referrals/seminars where they have one-on-one meetings. There, they present their company profile and products and services. A similar approach is by using workshops. Some MLM companies ask for a registration fee (usually KD 15-KD 140), but there are companies that only ask members to buy products and you're a member. If you are a committed member and want to earn money, you'll have to work hard. MLM businesses promise to create millionaires if members follow their business plan. The MLM business is quite young in Kuwait, but is gaining momentum rapidly. People are attracted to MLM strategies because the money flows like 'crazy' to members (only if you become a member early ahead of everyone else). Leaders and members are compensated well, including trips to the US and Europe, after reaching a certain quota, and cash prizes or cars.
What is MLM? Wikipedia defines MLM or multi level marketing business as a marketing strategy in which the sales force is compensated not only for sales they personally generate, but also for the sales of the other salespeople that they have recruited. People connected to MLM earn not only from their own sales but also for the sales of the people they recruited, creating a chain of distributors and a hierarchy of multiple levels of compensation, or in short a pyramid.
Most commonly, the salespeople become ambassadors of their brands and are encouraged to develop customer relationships as they sell products by word-ofmouth marketing. But MLM is not all about money or recruits. Some recruited members criticize MLM for being unable to fulfill their promises to many of the participants. "This business is home-based but you have to go out, meet people, share information and create communities.
In networking businesses, challenges will always arise but you are the ultimate key to success," a leader told Kuwait Times at a seminar conducted in Kuwait. Although the MLM strategy has created multimillion-dollar businesses, some have become embroiled in controversy, have dubious reputations and are resented for their so-called 'pyramid schemes'. "If you keep on promising your members they'll become rich and you don't help them to do business properly, how could they become millionaires? They are just siphoning money from masses of people, and in a way, doing business at the expense of others.
People are looking for something to earn and if you promise them heaven, they'll definitely join. The problem is along the way, they'll see the loopholes and many are doomed to fail. I am one of them," Mila stressed. Some multi-level marketing companies show exaggerated return on investment plans and techniques to enhance their members' enthusiasm and devotion by way of seminars and training. They even provide alleged scholarships. "They only give it on paper, but we don't see it in reality," said another MLM member
Quick facts about product-based pyramid schemes:
• Typically presented as sales opportunities.
• A distributor recruits salespeople who each pay money for products to sell.
• The distributor gets a percentage of each package of products he sells. .
• The distributor also gets a cut of each product that any of the recruits sell.
• The recruits are told that the fastest way to make money isn't by selling products, but by recruiting more people to buy products to sell.
• The people at the top of the pyramid get commissions from everyone in their downline (the people below them in the pyramid).
Usually, the products have such a low margin, that it's nearly impossible to make a profit without getting more recruits.
By Ben Garcia
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(c) 2014 Kuwait Times Newspaper Provided by SyndiGate Media Inc. (Syndigate.info).
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