Home Netwoking Business - Ethical & Moral?

[Sir_Hubert]

***I have a dear friend that has involed themselves in a Home Networking Buisness. You know the ones that say all you need to do is find a few friends to help you peddle the goods your trying to sell, and in five years you could be making $31,000 a month in commisions and residual payments. Personaly I find the ethics questionable at best. Morally it doesn’t seem quite right either. Your potentional earning come from other peoples hard work, some of these people you don’t even know … and they don’t know you. ***

Am I off base here?

 

[kettle]

It sounds like it’s potentially a pyramid scheme. Trust your intution, especially if you’re questioning ethics right off the bat. It’s probably a total scam… stay away from it.

 

[jmcrae]

As long as everyone knows what the deal is, there’s nothing the matter with it. It’s only when they start misrepresenting themselves as something else that it’s immoral.

Keep in mind, everyone in the group is working for everyone else. It’s also not just the number of people involved, but also the number of people who are actually getting out there and working to make money - if nobody in your group is selling anything to people outside the group, thus bringing in money that wasn’t already there before, then nobody in the group will make any money. It’s also essential to like the products and use them yourself - you can’t sell anything that you wouldn’t buy for yourself.

 

[Matt_Collins]

Your potentional earning come from other peoples hard work, some of these people you don’t even know … and they don’t know you.

Just like almost every other employer out there. The president of the company makes their money off the hard work of the peons at the bottom. That doesn’t make it immoral.

Also, as long as there’s a reasonable limit to the levels for which a person makes money, there’s no problem. For example, my sister makes money off me when I buy something from a certain company. My sister-in-law makes money off my sister, and less off me. If I recruit another buyer, I’ll make money off them, and both my sister and sister-in-law will make a little less money off them. But this only goes down 7 levels. After that, the guy at the top makes no money off the guy 8 levels below them.

If the percentages are small enough so that there really is enough money to go around to all 7 levels, then it can work. But to make a substantial amount of money (e.g., $31,000/month), you pretty much have to devote your working life to building your business.

If it’s a get-rich-quick scheme it won’t work. If it’s an arrangement that makes mathematical sense, it can work well if you concentrate on recruiting sellers who are interested in building their own business.

There’s nothing immoral about getting your “cut” from the sellers below you if everyone knows what the relationship is and agrees to it.

 

[1ke]

Each one would have to be evaluated individually as to its morality and ethics.

There are several very respectable companies-- Avon, Mary Kay, and Tupperware come to mind-- that work on this model.

Others may be immoral based on the product they sell, the methods they use, and the way in which their levels work.

No blanket statement can be made on these types of businesses.

 

[kage_ar]

As another poster said, in order to really make $$ on these multi-level-marketing things, you have to work it full time, 40+ hours per week. It also helps if you are the first one in your vacinity to sell the whatever-it-is. Areas become saturated with most of these things…

The only thing immoral is making people think it is a sure fire get-rich-quick plan.

 

[jmcrae]

As another poster said, in order to really make $$ on these multi-level-marketing things, you have to work it full time, 40+ hours per week. It also helps if you are the first one in your vacinity to sell the whatever-it-is. Areas become saturated with most of these things.

True. What you need is something that is both consumable, and attractive.

You also have to be very service-oriented - it’s also really important to be in a very service-oriented upline. One obstacle that I encountered when I was doing Amway was the waiting times for products to come in, because my upline didn’t order things right away - she would wait until she had a certain dollar amount before sending in the order, and sometimes, that could take several days.

That could work if the customer lives out in the country and it’s more convenient for for them if you deliver their stuff to them than for them to come into the city and go shopping, but when the customers live in the city, and are used to instant results, they don’t usually wait around for very long.

I lost customers when they had to wait so long that they ended up going to the store, anyway - that’s when I quit.

The only thing immoral is making people think it is a sure fire get-rich-quick plan.

I agree with that.

Amway as a whole is a good organization. The problems I had with them are probably not very common - the only thing I don’t like about them is the initial “guessing game,” during recruitment.

 

[otjm]

It sounds like it’s potentially a pyramid scheme. Trust your intution, especially if you’re questioning ethics right off the bat. It’s probably a total scam… stay away from it.

That is a little over the top. There are good and legitimate companies - for example, Avon - that have nothing to do with any scheme.

 

[otjm]

Some questions to ask: What products do they have, and what separates these products from off-the-shelf products?

What are the incentives for people to buy?

What is their track record for reordering (This one is critical; if people don’t continue to reorder, then someone, or a lot of someones will have to be constantly putting new people into the pool of buyers). No one makes money unless someone, and a lot of someones, are buying the product.

Most of the legitimate companies who market person to person are simply shifiting costs. Getting a product on the shelf of a distributor - e.g. a grocery store or one like an appliance store - is extremely costly. Manufacturers actually have to pay the store a “shelving fee”, serious money, to get the product on the shelf. Then, to keep it there, they have to actually have the item sell. To do that, they have to spend money on local, regional and national advertising - any idea how many millions of dollars a 30 second commercial costs, say, during the Superbowl?

So the companies have spread the money out by paying people who help sell their product, or help others to sell the product.

Have you ever sold anything -subscriptions for school, candy for the boy/girl scouts, or worked in a store on commission? Can you go up to a perfect stranger and start a conversation with them? Can you teach others to do what you do? Can you learn from someone else and actually repeat what they do rather than re-invent the wheel?

If you can do those things, yes, you can make a living at it; and you can start slowly; but at some point, it will have to be your full time job.

If you don’t like sales, but the products are good, why not buy them and try them?

 

[Mommy_G]

Bumping this up again because I found out that at least three ladies in my Catholic mommies group are into a multi level marketing biz. They tried to sell products on our local listserv.

It is solely owned by Mormons (I guess quite a few Mormons are into this sort of thing) with no shareholders – which they think is GOOD, but I am thinking…hey…no ACCOUNTABILITY either!

I see three problems:

1. Funding the Mormon religion
2. Potentially deceptive recruiting practices that can take place in MLMs
3. When you partner with non Catholics, you can’t be assured they respect the provisions regarding business in the Catechism (so if it is just “mad money” and the products promote materialism to boot…is it worth it?)

Thoughts?

 

[jmcrae]

Bumping this up again because I found out that at least three ladies in my Catholic mommies group are into a multi level marketing biz. They tried to sell products on our local listserv.

It is solely owned by Mormons (I guess quite a few Mormons are into this sort of thing) with no shareholders – which they think is GOOD, but I am thinking…hey…no ACCOUNTABILITY either!

I see three problems:

1. Funding the Mormon religion
2. Potentially deceptive recruiting practices that can take place in MLMs
3. When you partner with non Catholics, you can’t be assured they respect the provisions regarding business in the Catechism (so if it is just “mad money” and the products promote materialism to boot…is it worth it?)

Thoughts?

I think as long as people know what they are getting into, and what’s all involved with it, it’s great - it’s an inexpensive way to start up your own little business, the training is usually pretty good, in the more established ones like Amway, or Mary Kay, etc., because they don’t succeed unless you succeed, and you can apply the principles of being a self-starter and learning how to talk to people in other areas of your life as well, giving you greater control over your life and the things that happen to you - even if you don’t continue in the business itself, you gain life skills and business skills that help you to succeed in whatever you choose to do - it helps people get out from under the situation of being completely dependant for their survival on their employer - and in this day and age, we all know that our employers will not likely keep us on forever - as soon as a recession comes along, so does the downsizing, and if you haven’t got something to fall back on - either a little home business of your own, or the people-skills to get going in a for-hire sales job, you’re in big trouble.

 

[drina625]

Actually, I am jumping into this thread because this morning a friend told me she had had a fight with another good friend about becoming involved in a “pyramid” where you open a bank account and deposit money, send money to someone else’s account and end up with many thousands of dollars being deposited to your account. I told her this is absolutely wrong, but I couldn’t cite anything in the catechism or elsewhere showing where it is strictly forbidden. Can you help me? Sandy

 

[jmcrae]

Actually, I am jumping into this thread because this morning a friend told me she had had a fight with another good friend about becoming involved in a “pyramid” where you open a bank account and deposit money, send money to someone else’s account and end up with many thousands of dollars being deposited to your account. I told her this is absolutely wrong, but I couldn’t cite anything in the catechism or elsewhere showing where it is strictly forbidden. Can you help me? Sandy

I don’t think you are going to find anything in the Catechism about stuff like that, but if you are in a business that doesn’t produce any goods for sale, the chances are excellent that it is going to fail - money does not exist by itself; it comes from the value of goods produced and sold.

 

[otjm]

Actually, I am jumping into this thread because this morning a friend told me she had had a fight with another good friend about becoming involved in a “pyramid” where you open a bank account and deposit money, send money to someone else’s account and end up with many thousands of dollars being deposited to your account. I told her this is absolutely wrong, but I couldn’t cite anything in the catechism or elsewhere showing where it is strictly forbidden. Can you help me? Sandy

If you want to look anywhere, it is the issue of falsehood throughout the program you describe. It is clear that the later you get into such a pyramid scheme, the less you make until the last one in makes nothing and loses their money.

But to add to that, a goodly number of people in the scheme could lose more - their freedom - as it is a crime and may be one on both the state and the federal level. Doing time in a county or state prison, or a federal penitentiary is not a walk in the park, and people who get involved in these schemes go to jail - on a regular basis when they get caught. How do they get caught? When someone who was promised all sorts of wealth ends up losing what they have and they blow the whistle.

 

[tafan]

In and of itself, network marketing is not immoral. But they are not all the same and some of them are nothing more than pyramid schemes, which are immoral IMO. There is a good rule of thumb that will help answer this question. The question is, do they want you to spend more time recruiting other salesmen than selling their products. I have seen some on things such where the only actual sale of products that is pushed is to sale to the next salesperson in order for them to start business. Others, I think Mary Kay Cosmetics, may be an example, will spend an equal amount of time selling their products to customers as recruiting salesmen.

All of them should be approached VERY cautiously, because they are all HARD business to make a living. And many of the stories of people who “got rich” are simply those who got on board early with the product line in a particular geographical area.

 

[CD_Michels]

What drina625 brought up with the bank deal, that is a pyramid scheme. Network Marketing is not. I did Shaklee which is a ‘at home business’. I didn’t like selling and the people that I had underneath me didn’t like it either. So I only made enough money to pay for my own consumption.

I don’t think that network marketing is immoral as long as you are HONEST to the people you sign up!!! Let them know that this is going to be hard work. That if they want to quit their job and only do this, they will have to work at least 20-30 hours per week.

Also don’t try to sign up people that don’t like selling. And don’t lie to them that they don’t have to be good at selling to make money. The only thing that will happen is they will get frustrated and quit, and if they were a friend, it may hurt that friendship. If you want to make a business selling things like Shaklee, Avon, Mary Kay, etc. understand you will need to like sales, since that is what it is all about. And don’t sign up anyone that doesn’t like sales. If you do it correctly, you can be happy with it. Just be HONEST. The only time it is not moral is if you lie to people.