Yes...all too familiar?
I presume some part of your life, you have been approach by some friends or family members with "an attractive business prospal" with the promise of making big in life. Getting that big fancy house, driving that sports car, going on overseas trips twice every month.
Chances are they came on behalf of MLM companies.
So what is MLM?
In MLM you are in business for yourself. You purchase products directly from a wholesaler at wholesale prices. Product moves from Point A to Point B. You can, if you wish simply use these products for personal consumption or you can resell them at a retail price to make a profit. The most common misconception, however, is that you have to sell retail to be successful. Not true depending on the company you've chosen to work with.
The sale of a product comes when distributors share that product with family, friends, coworkers and/or neighbors. Now, visual a single thread from a spider's web. As the spider continues to expand his web it continues to grow and reach in all directions. As you meet people who are interested in doing what you're doing, you recruit them. You become responsible for their training, helping them to build a business of their own just like yours.
Sounds good on paper right? WRONG!
Selling a product-based deal is fine, but the idea of marketing a business opportunity to prospects when we know the numbers is not ethical for us. In its purest form, MLM is a viable method of marketing if its focus is on products and not primarily the business. Selling the dream of financial independence with MLM is a mirage for 90+% of distributors. The MLM industry statistics are that on average only 10% of distributors get a commission check each month. Of that 10%, 80% do not make enough to sustain themselves as a full-time income.
Industry-wide company statistics show that 90% of distributors drop out of each company within a 1-2 year period. The distributor churn rate is terrible.Any way you cut it, MLM statistically does not work for 90+% of those involved. And those who make the big bucks are in a more elite group--usually 1/10 of 1% of all distributors.
Secondly,
in MLMs, you do not own your own business, you do not own the product, and you are not in control of your destiny. The company holds all the strings--product supply, computer tracking, commissions, collections, customer service, order fulfillment, publicity, compliance, public relations, comp plan, everything.
All you own is a position in a long line of distributors. You do not control the product you sell, the company plan, what the company does or does not do, the money that is paid . . . distributors own nothing other than the opportunity to sign more distributors and manage the existing downline.
You are at the MERCY of the company, upline, downline, media, and government.
Thirdly,
What and where your the sense of success? stepping on peoples head to succeed? Toying with their feelings & friendships? I despise MLM on a moral level because of the reasons most people already know and would rather die than associate myself with an MLM organization, most of whom are staffed with losers in conventional life. Either no paper qualifications, no discipline or strength to stay in conventional careers etc. All looking for a short term quick buck.
Having said that, MLM works for the few on top of the pyramid because of the concept of leveraging. If you are the average salaried worker, there is no leverage, because you only add value through your own efforts, and if you are only one man, there is only so much you can do.If you are a business owner, you leverage off the efforts of your workers. If you are an investor, you leverage off your financial capital.
Leveraging allows you to grow exponentially instead of in multiples. MLM allows ambitious individuals to leverage OFF the money of friends, family and co-workers without the time and effort needed to set up a conventional business, and without the need to start with any significant financial capital, allowing otherwise useless individuals to make quite a lot of money without really doing anything producitve for society.
Your key focus will be how many downlines.. how to brainwash pple in your seminar talks to newbies... how to network to get more nodes under u.. will you be keen to IMPROVE products, customer services, R&D? absolutely not.
Sorry i'm biased, i have more negative things to say about MLM than positive... That is why I do not explore MLM as a biz model.
You have been warned.
I presume some part of your life, you have been approach by some friends or family members with "an attractive business prospal" with the promise of making big in life. Getting that big fancy house, driving that sports car, going on overseas trips twice every month.
Chances are they came on behalf of MLM companies.
So what is MLM?
In MLM you are in business for yourself. You purchase products directly from a wholesaler at wholesale prices. Product moves from Point A to Point B. You can, if you wish simply use these products for personal consumption or you can resell them at a retail price to make a profit. The most common misconception, however, is that you have to sell retail to be successful. Not true depending on the company you've chosen to work with.
The sale of a product comes when distributors share that product with family, friends, coworkers and/or neighbors. Now, visual a single thread from a spider's web. As the spider continues to expand his web it continues to grow and reach in all directions. As you meet people who are interested in doing what you're doing, you recruit them. You become responsible for their training, helping them to build a business of their own just like yours.
Sounds good on paper right? WRONG!
Selling a product-based deal is fine, but the idea of marketing a business opportunity to prospects when we know the numbers is not ethical for us. In its purest form, MLM is a viable method of marketing if its focus is on products and not primarily the business. Selling the dream of financial independence with MLM is a mirage for 90+% of distributors. The MLM industry statistics are that on average only 10% of distributors get a commission check each month. Of that 10%, 80% do not make enough to sustain themselves as a full-time income.
Industry-wide company statistics show that 90% of distributors drop out of each company within a 1-2 year period. The distributor churn rate is terrible.Any way you cut it, MLM statistically does not work for 90+% of those involved. And those who make the big bucks are in a more elite group--usually 1/10 of 1% of all distributors.
Secondly,
in MLMs, you do not own your own business, you do not own the product, and you are not in control of your destiny. The company holds all the strings--product supply, computer tracking, commissions, collections, customer service, order fulfillment, publicity, compliance, public relations, comp plan, everything.
All you own is a position in a long line of distributors. You do not control the product you sell, the company plan, what the company does or does not do, the money that is paid . . . distributors own nothing other than the opportunity to sign more distributors and manage the existing downline.
You are at the MERCY of the company, upline, downline, media, and government.
Thirdly,
What and where your the sense of success? stepping on peoples head to succeed? Toying with their feelings & friendships? I despise MLM on a moral level because of the reasons most people already know and would rather die than associate myself with an MLM organization, most of whom are staffed with losers in conventional life. Either no paper qualifications, no discipline or strength to stay in conventional careers etc. All looking for a short term quick buck.
Having said that, MLM works for the few on top of the pyramid because of the concept of leveraging. If you are the average salaried worker, there is no leverage, because you only add value through your own efforts, and if you are only one man, there is only so much you can do.If you are a business owner, you leverage off the efforts of your workers. If you are an investor, you leverage off your financial capital.
Leveraging allows you to grow exponentially instead of in multiples. MLM allows ambitious individuals to leverage OFF the money of friends, family and co-workers without the time and effort needed to set up a conventional business, and without the need to start with any significant financial capital, allowing otherwise useless individuals to make quite a lot of money without really doing anything producitve for society.
Your key focus will be how many downlines.. how to brainwash pple in your seminar talks to newbies... how to network to get more nodes under u.. will you be keen to IMPROVE products, customer services, R&D? absolutely not.
Sorry i'm biased, i have more negative things to say about MLM than positive... That is why I do not explore MLM as a biz model.
You have been warned.
4 comments:
That's a very interesting article you have towards MLM. Allow me to clarify some of you doubts and negative thoughts.
So what is MLM? MLM, or Multi-Level Marketing, involves a movement/transfer of products from one hand (e.g. manufacturer) through multiple levels of middlemen (advertiser, retailer etc) before reaching the hands of the end-user (e.g. customer) eventually. Having said so, the products that you buy in hypermarkets and retail stores have also pass through multiple levels of marketing before reaching your hands. So literally, you are also involved in MLM everyday. Theorically speaking, MLM is just a term used to identify an industry, and it is nothing wrong about that.
In a legitimate direct-selling company, no money is earned from the recruiting of people. The amount of money that one can earn depends on this or her own effort. In fact, a "downline" can earn more money then his "upline".
Now, I'm particularly disturbed when you mentioned that those involved in direct-marketing are "most of whom are staffed with losers in conventional life. Either no paper qualifications, no discipline or strength to stay in conventional careers etc. All looking for a short term quick buck." In my involvment with a legitimate direct selling company, I've seen doctors, lawyers and even CEOs of companies in this trade. Are you saying that they've no good paper qualifications? Statistics have shown that those who are successful in the direct selling business are also equally successful in their own conventional business/job as well. A conventional job is just for survival and the income is not long-lasting as well. People venture into the direct-selling industry because it can offer them something more than what a traditional job/business does. A legitimate direct-selling company is not a get-rich quick scheme. If you're approached with a "get-rich quick" proposal, then BEWARE!
In order to be successful in a direct-selling business, you do not need to step on people's head. In fact, this is a people-helping-people business. In your conventional job, how many people do you need to step on to climb to the top of the organisation pyramid structure? In your convention business, how many people/competitors do you need to "kill" to remain viable in the industry?
I appreciate the fact that you have said "NO" to such a fantastic business plan. If you would like further clarifications in this industry, I would gladly sit down over coffee to explain the plan with you again, instead of you getting information from those who have failed in the direct-selling industry before.
Cheerios!
http://www.vandruff.com/mlm_FAQ.html#30
more information on the negative side of MLM. For those who are still in this business, do take a look at the url.
Anyway, jj, i saw on your blog that you had recommended others to read the book "Rich dad poor dad". My advice is, do find out more about the writer first.
Hi CK, thanks for leaving your comments and also for visiting my blog. May I ask if you have any negative experiences before? Nothing personal here. Just curious to know more. Hmmmm... With regards to Robert Kiyosaki, please do elaborate your understanding about him. Which specific areas do you want me to "find out more" on? Thanks! :)
MLM is just a term, or category used to describe the direct selling industry. There are more MLMs out there if you are to ask me. Just take a look at a normal workplace in our own life (not referring to any particular workplace though): There are 100 workers 50 supervisors, 5 Managers, 1 CEO. Is this a pyramid or multi-level? Is this a situation where one party loses out and the other party wins? No, this is a win-win situation. The workers get their pay for what they do at the end of the month, and the managers get their pay for the responsibility of what their portfolio is. The only difference lies in the paychecks, and that is where the difference lies. Towards the end of the day, the CEO is an employee himself. If he does not turn up at the office for a whole month, what does he earn? Zero. If similarly, you do not turn up for work for the whole month, what do you get? Zero I suppose. When the CEO and worker can no longer perform their jobs due to their respective disabilities and are forced to retire, what is their income at retirement or at death? Zero right?
MLM, or direct selling as I can see in that interesting article, is sometimes labelled as a business where you "make use of someone". If you watched a great movie, will you share it? You will share it for free even if the production company does not pay you a cent for your exciting sharing on the movie. If you think of a great business idea, will you not go around sharing with your friends or people you know in the hope of finding like-minded people to join you? Are you making use of them? No, you will want them to join you and be a success just like you because you love them right?
If Multi-Level Marketing is not for you, then how about a professional educational system that you can tap in or plug in into to improve your thought process? You may not want the business, but how about improving yourself at a personal level so that you can get along better with others? What the professional system does and teaches, you get a field to apply your learning in, and that is your daily life. In fact, I would say that being able to associate well with people is also a great success in life!
I am unable to fully communicate all that I have gone through across to you through this comment, because all that I feel, you are unable to feel. If I tell you about a certain gathering that I went to with my friends that I had so much fun with, will you be able to imagine the great time I had without being there? Even if you tried to duplicate everything exactly as I told you, how you feel on your end may not be what I feel, right? It is also like I tell you what it feels like to be sitting on a plane and going through turbulences, and you have never been on a plane before.
I have nothing against anyone when I put this comment, just that I feel that a direct selling business or company should really be fully evaluated before we fully come out with a "verdict". In life, it is not what we do not know that hurts us, it is what little we know of something that hurts us most.
A company that is around for 50plus years, aided with a professional business system that has a lion's share of the company's market at 70 over percent, should really be given a second look at it again, rather than being given a rushed verdict. It is like pronouncing an innocent victim of a rape case as "guilty" and sending the victim to jail even though the victim is the one on the receiving end of all the damage done on a personal and emotional level. How will you feel if you are the victim being pronounced guilty?
With this, I end my sharing/comment with this quote: "It is not what we do not know that hurts, it is what little we know of something that hurts."
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