You may remember I have spent quite a bit of time in past MLM training newsletters teaching you how to handle specific objections. Because there is no doubt that at some point you will be confronted with the objection that MLM is like a chain letter. Well, to an uneducated person MLM may appear to be like a chain letter. With a chain letter, one person is sending a letter and making money off each person that comes in later – but the truth is, MLM is much different than a chain letter.

First off, let me define what a chain letter is. It’s an illegal scheme whereby the recipient receives a letter that attempts to induce the recipient to make a number of copies of the letter and then pass them on to one or more new recipients. To participate in the chain letter, the letter suggests sending money to the sender of the letter.

What makes this illegal is that there is no real product or service offered to the letter recipients.

Now, of course a chain letter is different than MLM or network marketing because in a legitimate MLM, there is a real product that makes someone’s life better. With a chain letter, there is no real product.

Let’s take a closer look from two perspectives:

1. Legal
   From a legal perspective, a chain letter is illegal because it doesn’t offer a real product. The fact that chain letters often make income claims is also sited in a recent U.S. Federal Trade Commission case against a chain letter sender. Personally I feel this is inconsistent with other industries (more on that below).

2. Ethical
   From an ethical view, a chain letter is unethical because it is misleading and there is no “product” that makes someone’s life better.

In a recent chain letter case brought before the Federal Trade Commission the FTC stated, “It is alleged that the scheme is an illegal chain-letter; that the earnings claims were false; and that most participants would fail to make any money.”

Interesting…and inconsistent.

Here’s something I find to be very inconsistent about the FTC’s statement! The below graphic was taken from a STATE lottery web page that is “legal.” The text below the graphic reads: “Players now have 4 chances per week to become a millionaire!”

I don’t know about you but I would call that an earnings claim! It’s also proven that most people who put their money in a lottery “failed to make any money.” So why does the Federal Trade Commission allow this?

In addition, I’m finding it difficult to figure out where the “real” product is in lotteries, or gambling for that matter.

What I find most fascinating is these two statements from the FTC’s web site concerning “foreign” lotteries:

1. “If you play a foreign lottery – you’re violating federal law.” I think it’s obvious the government is after money for themselves – if they can’t make the money, then lotteries are “illegal.”
2. “There are no secret systems for winning foreign lotteries. Your chances of winning more than the cost of your tickets are slim to none.”

Wow – can you believe that statement?! Like the “chances” are any better in the US lotteries!!

The bottom line is that MLM is not at all like a chain letter and rarely do chain letters use MLM to deploy their scams. Only to the uneducated would MLM appear to be like a chain letter. Chain letters are illegal and unethical because they only instruct recipients to send money with no guarantee of getting anything back, not even a product that would make one’s life better.

Now, this is really interesting. As for earnings claims, the FTC doesn’t want people in business opportunities to show their bonus checks or make ANY statements concerning money that one can earn in MLM because that is what they call “enticing someone into the business with money.” Hmm, that’s odd…I wonder what they call this?

It’s illegal to show your MLM bonus check that’s about the size of your hand but it’s not illegal in lotteries to show a check THE SIZE OF THREE PEOPLE?!! It all comes down to this – your MLM business is a legitimate business. You sell real products and services that people need and want. You help other people to sell those products and services too. I think you can see from the comparison above that chain letters are not a legitimate business. In the MLM industry we have to overcome people’s misperceptions about the industry itself, but here’s the real truth: It’s not that hard to do if you are educated on what MLM is and what it is not. My purpose with these newsletters is to provide you with the MLM training tips so that you can never be thrown by any objection you may get. Think about how it will feel to be rock solid in your understanding of MLM and how it compares to various “scams and schemes” that people mistake it for. Join me on the upcoming teleclass next week and I’ll give you more tips and facts to help you get prospects past their misperceptions about our business model. :)

Having fun in Norway and on my way to Israel!

Tim Sales

Tim Sales helps network marketers gain the skills necessary to be successful in MLM. His MLM training is based on his personal success of building a downline of 56,000 people. Instantly access Tim’s free MLM training and learn the steps to achieve success at www.firstclassmlmtools.com/MLM-Training-W13.aspx

This entry was posted on Wednesday, November 14th, 2007 at 9:28 am and is filed under How To Handle Prospect Objections. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.