MLM or Network Marketing Schemes, Cringe, and More

[Bozigian]

Instead of joining an MLM company. why not make one. that looks fastlane. I found one book on it at amazon its called How to Start Your Network Marketing, Modern Party Plan or Web Affiliate Company. I do not know exactly how it works though. Just posted this because maybe you can do some research on this

 

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[alainn]

I think MLMs are bad - building someone else's pyramid or building your own. Although one is fastlane, they both are unethical. Look up Fitzpatrick(author) and his book: False Profits. It explains it all. To explain:

Noone really makes decent money in direct sales - in actually selling the product. The money is in the recruiting. Recruiting others who will in turn recruit others, etcetera... If every person recruits at least 3 people like MLMs teach you to do... when you go down 22 levels, you already recruited the whole population of America. This is impossible of course.. but the point is: eventually, with time, there will no longer be any people left to recruit - and the MLM system implodes. The people at the bottom who were the last to be recruited lose - they cannot make any money... and that ends up being A LOT of people who cannot recruit anyone. It's simple math. 3 x 3 x 3 x 3 x3 ...etcetera implodes after a certain amount of levels.

Don't buy into an MLM and don't start your own. There are so many other opportunities out there, that create a win-win situation for all where noone loses.

 

[DeletedUser394]

If you sell a legitimate product through an mlm, I see nothing unethical about it.

For example, Avon is an mlm. They provide products of value that people want and use. Everybody wins.

The majority of people that do sell for avon, do it on the side, and as long as they're happy with it, cool.


At the same time, there's nothing wrong with starting an mlm that provides something of value. It's a legitimate way of leveraging yourself through other people.

In other words, if you want to make money with an mlm, Start one, don't Join one.

 

[^eagle^]

MLM is not fastlane!
(Happy MJ?)

That being said it does provide many things that you may be lacking to actually become a fastlane thinker.
1. Human resources--If your stuck hanging around a bunch of losers then this can create a change of enviroment. Healthy positive people who have an interest in helping you succeed in the real world as opposed to some words somebody threw up on a screen.

2. Education-- Most MLM's offer education programs and if you have not been exposed to a lot of self help programs or business education or finance this is a good learning enviroment.

3. Sales experience-- This is an outside sales job. It takes A LOT of perseverence to make it in MLM. Hundreds of rejections as you learn HOW to sell. You put yourself out there in the rough and tumble world as opposed to sitting behind a computer all by your lonesome in theory land. It forces you to become a student of human nature and the art of persuasiuon.

I think of MLM as an On ramp to the fastlane Superhighway. It is definitely not the fastlane but an exit ramp from the congested city streets of mediocrity. At least it is an attempt to better oneself by learning skills outside what we have obtained form the schools and universities which basically teach us to become wage slaves.

It's easy to sit back in theory land and say "start your own MLM! That is the Fastlane!" And there may even be a book or two about it. But until you been in one, How could you possibly know how to create one? Thats like someone who has worked as an IT tech all their life all of a sudden wants to open a pizza shop. You have been trained to write code but have no business experience and you want to open a pizza Shop? It better be some pretty damn good pizza! (or Cheap)

You can pick up some good real world lessons form MLM and even make a decent living at it. But its still not fastlane. Read more about what is FAstlane. Get the book.

 

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[John Rogers]

The money is in the recruiting. Recruiting others who will in turn recruit others, etcetera

Not really. The money is in moving product. The money is in retention, not recruiting. The money is in getting people on auto-ship, and keeping them on it.

... If every person recruits at least 3 people like MLMs teach you to do... when you go down 22 levels, you already recruited the whole population of America. This is impossible of course.. but the point is: eventually, with time, there will no longer be any people left to recruit - and the MLM system implodes. The people at the bottom who were the last to be recruited lose - they cannot make any money... and that ends up being A LOT of people who cannot recruit anyone. It's simple math. 3 x 3 x 3 x 3 x3 ...etcetera implodes after a certain amount of levels.

Actually, the number is exceeded at level 18. A legitimate MLM wouldn't have such a compensation plan, nor would they imply claims that such numbers could be achieved. One, they couldn't possibly pay out the commissions, and two, the FTC would be crawling up their a$$ with a microscope. You've cited one oversimplified representation of a compensation plan as the basis of your argument, when there are many.

Don't buy into an MLM and don't start your own. There are so many other opportunities out there, that create a win-win situation for all where noone loses.

I'm not saying MLM's are good or bad. I'm just saying you've made a poor argument and don't appear to have real evidence to back it up.

 

[DeletedUser394]

I don't see why creating mlms is not fastlane.

You are utilizing other people's time, and money, and getting paid for setting up a system that provides income regardless of what you do. If you set up a great system, you'll have passive income coming out the wazoo (I have no idea what I just said, but you know what I mean... basically MONEY FOR DOING NOTHING)

It's easy to sit back in theory land and say "start your own MLM! That is the Fastlane!" And there may even be a book or two about it. But until you been in one, How could you possibly know how to create one? Thats like someone who has worked as an IT tech all their life all of a sudden wants to open a pizza shop. You have been trained to write code but have no business experience and you want to open a pizza Shop? It better be some pretty damn good pizza! (or Cheap)

It's just the same as starting any business. Stories are everywhere. "A single mom/hairdresser invents a product, and starts her own company to sell this product". She had no previous experience in business, patenting, inventing, etc but she still got it done.

Not that it matters, but I know of a few success stories in which people set up pizza shops, with no previous experience in that industry... One that comes to mind right away, is Jim Treliving of Boston Pizza... he was an RCMP officer for crying out loud. What do the police force and pizza have in common? Absolutely nothing.

I think MJ pegged the business startup success rate at 1 in 7... I don't see why mlms would be much further off.

Instead of selling your product yourself, you get hundreds of people selling your product for you, and you get a percentage from each one. If your people move MILLIONS of product, you will make MILLIONS.

Of course everything is easier in theory, but if someone wants to start an mlm, there's nothing stopping them. Success is an ongoing learning process... you can't possibly know everything about an industry before you enter it (it obviously helps to know as much as you can), but you learn and tweak your system as you go along.

The mlms that do work well, do extraordinary amounts of sales. There is the human element to it.. those unpredictable and uncontrollable creatures that they are... but if you offer them enough incentive, most people will make some kind of effort.

 

[^eagle^]

I don't see why creating mlms is not fastlane.

You are utilizing other people's time, and money, and getting paid for setting up a system that provides income regardless of what you do. If you set up a great system, you'll have passive income coming out the wazoo (I have no idea what I just said, but you know what I mean... basically MONEY FOR DOING NOTHING)



It's just the same as starting any business. Stories are everywhere. "A single mom/hairdresser invents a product, and starts her own company to sell this product". She had no previous experience in business, patenting, inventing, etc but she still got it done.

Not that it matters, but I know of a few success stories in which people set up pizza shops, with no previous experience in that industry... One that comes to mind right away, is Jim Treliving of Boston Pizza... he was an RCMP officer for crying out loud. What do the police force and pizza have in common? Absolutely nothing.

I think MJ pegged the business startup success rate at 1 in 7... I don't see why mlms would be much further off.

Instead of selling your product yourself, you get hundreds of people selling your product for you, and you get a percentage from each one. If your people move MILLIONS of product, you will make MILLIONS.

Of course everything is easier in theory, but if someone wants to start an mlm, there's nothing stopping them. Success is an ongoing learning process... you can't possibly know everything about an industry before you enter it (it obviously helps to know as much as you can), but you learn and tweak your system as you go along.

The mlms that do work well, do extraordinary amounts of sales. There is the human element to it.. those unpredictable and uncontrollable creatures that they are... but if you offer them enough incentive, most people will make some kind of effort.

The reason being in an MLM is not fastlane is that you have no control except for the Mentoring of your downlines. You are relying on them to make the correct choices. YOu do not own the products or manufacture them. You are selling them for the MLM. The owners of the MLM make money off of everyone elses labor. And they control the rules by which you work. I had a great idea to market something in my MLM but their rules do not allow it. That is what makes it an outside sales job no matter how you spin it. Not saying you cant make money at it. You can make 6 figures if you work hard at it for a few years, But it takes a few years of constant perservereance. Its not an event. Its a process.

In the fastlane you control the rules of operation bowing only to government regulation. My forex endeavor is an example of that. I was doing well with my forex adventure then the CFTC, A governmental regulator, comes along and changes the rules making my product ineffective with United States Brokers. My Product cannot be used by United states citizens safely unless they take their money offshore. And I am finding out how hard it is to get money from off shore back into my bank account! Thus I had to completely revamp my plan.


As for the housewife story and the pizza guy. We cannot confuse the event with the process. "Housewife turns invention into fortune overnight." Sounds better than "housewife spent months coming up with a great new idea and then gathered a team of specialists to help promote the product and after a few false starts and one bankruptcy she finally got her product off the ground and now clears seven figures annually."

 

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[DeletedUser394]

I'm pretty sure we are grossly misunderstanding each other, because I agree completely with what you say.

All I'm saying is that "Being the OWNER of the mlm is fastlane, while being a PARTICIPANT in an mlm is slowlane"

You: "the owners of the MLM make money off of everyone elses labor. And they control the rules by which you work."

So we agree haha =P

 

[MJ DeMarco]

It's easy to sit back in theory land and say "start your own MLM! That is the Fastlane!" And there may even be a book or two about it. But until you been in one, How could you possibly know how to create one?

Agreed. For anyone to successfully create one, you probably need to have the experience of being involved in many, and do well.

You can pick up some good real world lessons form MLM and even make a decent living at it.

Agreed.

But its still not fastlane.

In general, correct, not Fastlane because of too many Commandment Violations -- however, it does possess SCALE which some will argue is the most important commandment.

 

[Ratnick]

Yes I did read the replies in this thread but they're a mixture of different responses. The MLM company that I am a part of deals with giving away shopping portals. The "main objective" of these portals is to earn cash back when shopping online. There are also specialty stores and a travel portal included in this website. Although this may sound like I'm advertising, I'm not. Just wanted to give you guys better clarification of my situation. The reason I asked my question is because I wanted advice from someone who's probably been in a similar situation as me.

 

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[emorgan]

Is scale the most important? I would lean more toward control. So you work your a$$ off to build this downline, and if the MLM company decides to change the product, etc. - you have no control over that. You are essentially a sales person.

Two of the huge differences between MLM and your own business is that you have control and you are building something that you can sell.

Building your own business will give you the opportunity to fulfill a real need, where you aren't competing with any old yahoo, you have all the control, given you chose the right business you can grow it as big as you want, and you will have exponentially increased the return on the time you spend. You will build something you can sell.

 

[cobwab]

There are too many criminals in MLM and the worst thing they do is called stacking. You think you have joined under a good mentor and then you find out your have been stacked under someone else to push that idiot to the next level.

That happened to me twice. I hate MLM and it is NOT FASTLANE.

And mathematically there are not enuf stars in the universe to make it work as a Fastlane unless you are a founder or sell seminars/dvds/books..

 

[DeletedUser394]

The creators of Avon ($628 million US in net income, on revenue of over $10 billion US in 09) would disagree with you.

START the mlm, DO NOT JOIN ONE. There is no debating the fact that joining one is slowlane, and creating one is fastlane.

Starting an mlm that sells an amazing product that people want to sell and buy is fastlane. If it's a product that people will want to buy over and over again, even better. Joining that same company is not.

You yourself concede that starting an mlm is fastlane. It's just like any other company or fund.

The fastlane is about being the driver of your wealth creator, not riding shotgun as a passenger. There is no consideration about 'joining' someone else's venture (unless you're a general partner or fund manager of a firm that you've created.)

I know you know this, because you've read the book.

It's all in the creation.

There are criminals in every industry, but that's really a non-issue if you're the one creating the mlm. In that case, the due diligence process doesn't exist.

 

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[John Rogers]

And mathematically there are not enuf stars in the universe to make it work as a Fastlane unless you are a founder or sell seminars/dvds/books..

MJ talks about that exactly in his book. Starting a MLM is Fastlane.

Personally, I think there are a lot of deceitful people in that industry. But in what industry do you not find deceitful people? Investing? Real estate? Car sales? <sarcasm>

Network marketing provides a great distribution channel. I'm not saying that anyone should join one, but when looking at it from the fastlane side of the track, it makes a whole lot of sense.

 

[loksch]

MLM Success?

Years ago....by a very wise marketer....

"Dependant on the expansiveness of the MLM project....the initial 10 - 20 people will be the only ones to make any serious money."

This has been proven to me many times over...so, I pass it on for what it's worth.
Take Care,
loksch

 

[JEdwards]

You can think about it, but don't do it.... Just don't... Unless you own it.

Never been in an mlm, but a guy handed me a card last week with his pic on it.. Funny stuff...

 

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[Vagabond 007]

I know someone personally that is making $108,000 per MONTH in an MLM. He is #3 in the company. His father in law is #1, makes over $3 million a year. Daughter makes high 6 figures a year. Sister in law makes about a million a year.

With that being said, I don't really recommend joining one for the reasons already stated.

Can you make big money with MLM. Sure.

But it is going to take a lot of hard work. Work that, in my opinion, would be better served building your own company that you have 100% control of.

 

[ClintonSkakun]

The reason why I wont touch MLMs now days is because of the Fastlane principles that MLMs don't fit into. Simply put, they violate too many of the rules. They're all way too similar("we are the best opportunity out there, you wont find anything else like this.") and many of these companies get very close to crossing ethical boundries...too close for comfort. No I don't believe selling to friends and family is the wave of the future, it jacks up the markup price and makes it inconvenient, whereas I could just go buy everything at WalMart.

 

[ClintonSkakun]

Years ago....by a very wise marketer....

"Dependant on the expansiveness of the MLM project....the initial 10 - 20 people will be the only ones to make any serious money."

This has been proven to me many times over...so, I pass it on for what it's worth.
Take Care,
loksch

Once you get those 10-20, can you then sell the business? What's your exit strategy? Do you have control(I can change this product, change the price, change the name, branding, service model etc.)

 

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[arpeggiomeister]

I have 2 problems with MLM: market saturation and mediocre products that I can not believe in.

If you decided you wanted to clog your arteries with a Big Mac and there were 50 McDonalds all lined up on one street which one would you go to? The first one you see right? No matter what line of bull your ring leaders told you, every person recruited into Amway is your competitor. There is a limited amount of people that will buy or participate in the company. If you have 100 people in your neighborhood trying to sell Amway it makes life tough.

The advent of the internet has made things worse for MLM. Do a search for Carbon Copy Pro. You will pull up page after page after page of results. If you were actually interested in participating in this would you bother going to page 50? Would you even make it past page 1??? That means market saturation has been reached with only 10 to 20 participants. What if you are member #155. You're screwed. Saturated with only 155 members... ... that is terrible!!!!!!!!!!!!!!!!!!!!!! Now you must compete with well-funded people and creative people to get on the first page of the Google search. If you are up for that challenge than God bless you.

Having a product you believe in is paramount. I have had people push Amway on me before. I see absolutely no reason to purchase Amway products when I can purchase comparable products at my convenience from the local Wal Mart. What problem does Amway solve? It is a nusaince. I want what I want when I want it. I do not want to have to order soap or paper towels. I am not going to bother to contact my Amway rep for these things when I can just pick them up on the way home from work.

I am not saying this stuff to be rude, but to point out the fundamental flaws with the business model. I am not saying that you can not be successful in Amway. People do it, but is it really your best option? Only you can answer that.

 

[ClintonSkakun]

I have 2 problems with MLM: market saturation and mediocre products that I can not believe in.

If you decided you wanted to clog your arteries with a Big Mac and there were 50 McDonalds all lined up on one street which one would you go to? The first one you see right? No matter what line of bull your ring leaders told you, every person recruited into Amway is your competitor. There is a limited amount of people that will buy or participate in the company. If you have 100 people in your neighborhood trying to sell Amway it makes life tough.

The advent of the internet has made things worse for MLM. Do a search for Carbon Copy Pro. You will pull up page after page after page of results. If you were actually interested in participating in this would you bother going to page 50? Would you even make it past page 1??? That means market saturation has been reached with only 10 to 20 participants. What if you are member #155. You're screwed. Saturated with only 155 members... ... that is terrible!!!!!!!!!!!!!!!!!!!!!! Now you must compete with well-funded people and creative people to get on the first page of the Google search. If you are up for that challenge than God bless you.

Having a product you believe in is paramount. I have had people push Amway on me before. I see absolutely no reason to purchase Amway products when I can purchase comparable products at my convenience from the local Wal Mart. What problem does Amway solve? It is a nusaince. I want what I want when I want it. I do not want to have to order soap or paper towels. I am not going to bother to contact my Amway rep for these things when I can just pick them up on the way home from work.

I am not saying this stuff to be rude, but to point out the fundamental flaws with the business model. I am not saying that you can not be successful in Amway. People do it, but is it really your best option? Only you can answer that.

Although I have more than 2 problems with MLM I agree with your points. I really don't have the time to take the extra time looking for juice, toilet paper, soap or anything I can just get at Walmart. Would I if they were better products? No...because I seriously have better things to do. If I'm at my hairdresser's and he shows me a better hair gel than what I get at the store I'll buy it. But I'm not going to call one of the dozens of MLM "business owners" to buy things like soap. It just makes my life a living hell.

Competition and poor representation of these companies are problems as well. Nearly anyone can join and so your reputation can be damaged by the guy with the stained wife beater and torn jeans who tries to sell insurance at Fas Gas.

But seriously knowing what I know now, I would never be apart of an MLM just because it is a really bad business idea that wouldn't have a chance in hell if people actually did their research before diving in. That's another one of the points MLMers try to hit you with, "how can so many people be wrong?" Yet there are masses of people who do drugs, believe in and do crazy things. This doesn't make them right. You take a look at how long a lot of these people have been in the business and how much money they've made and you might get a hit at how many ARE wrong.

Cheers!

 

[acesar]

I read MJ's book and loved it and in GENERAL i agree with his Mlm points. But for an average person with little money to start a business on their own, its easier to use mlm and hitchhike ur way to a future.
Nevertheless, the notion that big or legendary money isn't available in MLM unless you own isn't true and really depends on your mlm opportunity.

I personally am in ACN and since we got into energy (gas & electric) i am seeing residual income skyrocketing. You can acquire gas and electric residential AND COMMERCIAL customers.

I am meeting people in the business in less than a month signing up huge 6-figure and 7 figure energy bills, setting themselves up with ONE customer alone for 5-6 figure RESIDUAL income. THats not even counting the other customers, bonuses from helping and building your team that they will get.

#justsaying..

 

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[acesar]

sorry i misspoke i meant 4-5 figure residual income from one customer.

 

[kurtyordy]

I am meeting people in the business in less than a month signing up huge 6-figure and 7 figure energy bills, setting themselves up with ONE customer alone for 5-6 figure RESIDUAL income. THats not even counting the other customers, bonuses from helping and building your team that they will get.

numbers do not lie. across the mlm industry, only about 1/10 of 1% of individuals make more than they would make working the same hours at mcdonalds. the other 99.99% would be better off getting a job flipping burgers. Yes, they push the stories of the .01% just like the lottery plays up the $250 million winner. It is better for business to focus on that rather than focus on the countless suckers that made the .01% possible.

 

[arpeggiomeister]

I read MJ's book and loved it and in GENERAL i agree with his Mlm points. But for an average person with little money to start a business on their own, its easier to use mlm and hitchhike ur way to a future.
Nevertheless, the notion that big or legendary money isn't available in MLM unless you own isn't true and really depends on your mlm opportunity.

I personally am in ACN and since we got into energy (gas & electric) i am seeing residual income skyrocketing. You can acquire gas and electric residential AND COMMERCIAL customers.

I am meeting people in the business in less than a month signing up huge 6-figure and 7 figure energy bills, setting themselves up with ONE customer alone for 5-6 figure RESIDUAL income. THats not even counting the other customers, bonuses from helping and building your team that they will get.

#justsaying..

I have been intrigued by MLM for a long time. Unforunately this fascination has lead to nothing but frustration. I will say the angle you mention with ACN is intriguing. It sounds like a product that you can believe in. That has been my nemesis with the industry from the beginning. I have been involved in a handful of companies and I have found the product to either be completely lame (my first exposure to MLM was selling cookie recipes in a 5 level deep traditional chain letter) to overpriced products (Kirby Vacuums, more direct sales than MLM, but structurally similar in that they must charge all outdoors to support their compensation package. A $1,500 vacuum better make my bed and do my laundry... ...and that was the price back in the mid 90s)

For the most part I am anti-MLM for I have yet to see one that I can truly believe in, but I am open minded. The thing that has fascinated me about MLM for years is the leverage. Traditional methods of marketing can cost hundreds of thousands of dollars, or even millions. A well designed MLM can reach those same people for under $10k. That is amazing. With this in mind I have toyed with the idea of creating my own MLM for years. The problem is that I want the people that would join to happy with what they purchased, so that if they made no money from the opportunity they would feel they received something of value. I have ideas but not that Eureka!!! moment. I have looked into other methods as well. I am currently very interested in something called "micro-continuity". That is another thread though.

If this thing is working for you that is fantastic. If you make a 6 figure income from MLM, invest the money in say real estate, selling covered calls or puts in the stock market, etc. you can amass a fortune. It might not fit the Fastlane definition, but the Fastlane is not the only path to financial freedom. If you are happy with $10k a month this path will get you there in 5 years or less. (that is $10k in passive income from your investments, not the MLM. You could walk away from the MLM free and clear) If you want $100k or more a month you may want to explore other options.

The kind of money and freedom MJ is talking about is a whole different level. It is more like several different levels beyond what most "opportunity seekers" have set out to achieve. I love the section of his book where he talks about some guy selling an opportunity that can make $20k a month. To most of us, myself included, that is a lot of money. MJ laughs at this amount as though the guy is like some homeless dude begging for change. I obviously have paraprhased and mutilated the story, but the point is intact. He is living in a completely different paradigm. $20k is peanuts to him. I love it!!! Only one other book struck me over the head like this story. It was "The Art of th Deal" by Donald Trump. I have spent many years searching for ways to make $10k to $20k a month, thinking that I would be rich beyond all imagination, and then I read about a young Donald Trump swinging around $200 million dollar deals in the late 70's early 80's. It really opened my eyes as to how small I was thinking. It hit me like a ton of bricks. It will take the same amount of energy to make $10k in an MLM as it would to make millions in your own business.

This is the message I am getting from MJ in this thread, and his book.

 

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[acesar]

very good comment. I whole heartedly agree with your last point that it will take the same amount of energy to make $10k a month in an MLM as it would to make millions in your own business. In all honesty, I have issues even with my own mlm business because I dont BELIEVE in the company. I can't have full faith in an entity i have no control over. Nevertheless, I was simply trying to make the point that I have never seen residuals in mlm like im seeing now since energy got deregulated. Problem is, thats my only interest lol. I don't care for recruiting at all. I would much rather start from ground up and start my own I realize bc Ill give it my all.

 

[DeskSnacker]

I don't think the book is something you have to "believe" in. I think it's picking out the points that ring true to what you think you can achiever. The main point I got was to focus on the process and not focus on a single event. Stop thinking selfishly about making a million dollars and instead focus on what you can create to change a million people's lives.

With an "anti-MLM" attitude, all I hear is that you haven't found "an event" that has created millions. This is backward thinking. It's actually a process you make happen, rather than a get-rich-quick event.

 

[Kak]

MLM is HARD to make good money in. It is a good learning expirence but you can get into distribution channels with a big buy of things that not everyone else under the sun is also selling.

Sent from my SAMSUNG-SGH-I997 using Tapatalk

 

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[CPisHere]

One thing I was disappointed in the book was MJ's lack of attention to ethics in regards to business.

MLM is a scam. There's not a single MLM company out there that sells a product that's a good value. They make a lot of money (for the founders), but only provide value to the owner's lives - taking it from everyone else's (including 90% of the recruits selling it for them). Is this business model worth your integrity?

If you want to start a MLM company, all you need is a mediocre product with a lot of fake research "proving" it's benefits published in a non-peer reviewed scientific journal. Then you hire a celebrity or Dr (you just give money to their charity or something so that you can claim they are unpaid) to praise your product (even though they never use it), force each person that wants to sell the product to purchase it for themselves, then teach them how to scam their friends and family into also buying/selling it.

 

[Vigilante]

I am not a fan of MLM's --- have never participated in one, but there are some good products involved in some. We buy BEER BREAD from Tastefully Simple, we buy pure vanilla from another MLM, and Carbo Salve from Watkins products. So... I do think there is value (as a consumer) in some MLM products. My wife just mentioned Skin So Soft, and Avon products in general. She doesn't use them, but millions of people find them to be a good value. Tupperware, Longinburger, Mary Kay, Pampered Chef...