...What about owning a MLM company?

[LauraLou]

I see posts about why not to join a MLM scheme on here and on Reddit ALL THE TIME. Every time I read a thread it's always the same thing:

- Only the owners make money
- My Mum/Sister/Cousin/Hairdresser has got involved with one and can't see why it doesn't work

So there's probably a market for it, there's a market for distributors and if you're the owner then you can make money.

Does anyone here own a MLM company? Can anyone point out why it's a good/bad idea?

Thanks

 

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[andrewhook]

Hi Laura,

I think a MLM company is similar to any other company. As an entrepreneur, you have to put a huge effort while starting it.
What is different is the sales system, so you have to deeply study everything such as:

• Characteristics of successful MLM products
  Usually they would not sell anything if you place them on the market, because they are products with a huge target, with higher quality, but more higher prices. (For example, I know a MLM company that sells coffee with a supplement called Ganoderma. Coffee is awesome, but it costs 10 times more than the one that people normally uses. Not even a millionaire would buy it, but Company members do).
  
  
• Best Pay Plans
  Think about what you'd like to know when hearing about the company: lot of income sources? High percentages?
  Low required monthly volume? Great incentives?
  
  
• How to sponsor new people and how to teach them to sponsor other people
  Remember, distributors are at the base of MLM companies.
  You could sponsor hundred of peoples, but if they'll never sponsor anyone, sooner or later they get tired and leave you and your company. And withoud vendors, it's caput. Prepare yourself to a ton of hard work!
  
  
• How to build leaders
  Leaders are always keep the group together and inspire the latest lines to work hard. Forget about yourself and help people growing their network. They grow -> You grow.
  

• How to go over prejudices
  Always keep in mind that a lot of people have been "scammed" by MLM or know someone who lost money, so you have to find out how to overcome these prejudices.

 

[Tomekmeister]

I thought about the same thing.
I once got a little brainwashed and almost joined one of the MLM companies, but then I realized that who the hell would buy this crap?
Honestly, if you can find a product that your "employees" will be happy to sell, then I don't see how it's a bad idea

 

[kkompoti]

before this forum i thought mlms where only in cosmetics and healthy drinks industries. after this forum i understood that they can be found in different products and industries.

what other industries are mlms in?

 

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[wade1mil]

An MLM is one method of marketing. You're leveraging human resources. Owning one can be fastlane.

 

[B V Marlon]

I see posts about why not to join a MLM scheme on here and on Reddit ALL THE TIME.

Yet, despite that, there's always new MLM schemes and people getting involved with them. It's strange.

It's a model that's proven to work in terms of enriching the people who own the company, so it's a good idea in that respect. You just need to find the right product and market it in the right way, to the right people. If it's something you're considering, study the methods used by the successful MLM companies, in depth, to see how they do it.

These schemes don't even have to make sense:
https://www.thegcccoin.com/

That popped up in my FB feed the other week and I took a look out of sheer curiosity. It makes no sense, but some people have got involved with it.

Interesting choice of Avatar

 

[MattCour]

Not all MLM companies are a scheme, it's just another sales method. Look up Isagenix, they produce a ton of different nutritional supplements. I've tasted some of their products bc my girl loves to buy them. I just googled them and they have 200,000 sales associates and do around $350 mil/ yr in sales. I had no idea they were that big, talk about Fastlane!!

Another that comes to mind is Mary Kay. They sell mostly makeup. They do over $3BILLION in sales with 3 mil+ sales people. I'd say the model is super Fastlane if you own the company.

 

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[andrewhook]

before this forum i thought mlms where only in cosmetics and healthy drinks industries. after this forum i understood that they can be found in different products and industries.

what other industries are mlms in?

Here in Italy we have mlm for coffee, tea, hot chocolate, pots, vacuum cleaner (I'm serious)

 

[andrewhook]

Not all MLM companies are a scheme, it's just another sales method. Look up Isagenix, they produce a ton of different nutritional supplements. I've tasted some of their products bc my girl loves to buy them. I just googled them and they have 200,000 sales associates and do around $350 mil/ yr in sales. I had no idea they were that big, talk about Fastlane!!

Another that comes to mind is Mary Kay. They sell mostly makeup. They do over $3BILLION in sales with 3 mil+ sales people. I'd say the model is super Fastlane if you own the company.

And Herbalife, the leader of mlm companies! (8,3 billions $ revenue)

 

[MattR82]

Not all MLM companies are a scheme, it's just another sales method. Look up Isagenix, they produce a ton of different nutritional supplements. I've tasted some of their products bc my girl loves to buy them. I just googled them and they have 200,000 sales associates and do around $350 mil/ yr in sales. I had no idea they were that big, talk about Fastlane!!

Another that comes to mind is Mary Kay. They sell mostly makeup. They do over $3BILLION in sales with 3 mil+ sales people. I'd say the model is super Fastlane if you own the company.

If I have to hear about Isagenix one more time...

It's actually ruined some relationships I have with people in my family.. not beyond repair of course. But on hold for awhile it seems. It's sooooo strange. Super smart guy that already had a pretty fastlane business.

 

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[ZF Lee]

Not all MLM companies are a scheme, it's just another sales method. Look up Isagenix, they produce a ton of different nutritional supplements. I've tasted some of their products bc my girl loves to buy them. I just googled them and they have 200,000 sales associates and do around $350 mil/ yr in sales. I had no idea they were that big, talk about Fastlane!!

Another that comes to mind is Mary Kay. They sell mostly makeup. They do over $3BILLION in sales with 3 mil+ sales people. I'd say the model is super Fastlane if you own the company.

Best of all, the founder of Mary Kay is deceased! A Fastlane gig that survives and dominates without the presence of the founder...a very dangerous battleship looming in the distance...

 

[Scot]

Are there any examples of ethical MLM's? After reading about a lot of these MLM's that exist to make money from their "employees" not customers.

The idea of using an MLM to sell a brand/product is great, but screwing over your employees isn't ideal. I want a business that lets me sleep at night.

 

[LauraLou]

Are there any examples of ethical MLM's? After reading about a lot of these MLM's that exist to make money from their "employees" not customers.

The idea of using an MLM to sell a brand/product is great, but screwing over your employees isn't ideal. I want a business that lets me sleep at night.

I think it depends what you mean by ethical - no one's going to lose their house by investing all of their money into an MLM, no one is selling things that cause harm to people.

Yes it's annoying to have a MLMer permanently yapping on at you but is that considered an unethical business?

 

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[andrewhook]

Yes it's annoying to have a MLMer permanently yapping on at you but is that considered an unethical business?

There are two kind of people in MLM:

the high tiers, selling "the dream". They are aware that 99% of people won't make it, but they'll never tell you.
They PERFECTLY know that the MLM CAN'T work for everyone.

the lower tiers. They join with the dream of a luxury lifestyle, passive income and other bullshits. They are going to lose a lot of money, not only because they are at the lowest level, but because often they are employees, housewives, young guys who have no idea of what the "entrepreneurial mindset" is.
They think "I'll talk with two friends and then i'll wait for my passive income". And then lose their money.

The system is unethical, but it works. If you start a mlm company and it grows well, that is fastlane.

Of course, remember that a lot of people will lose their money because of your company.
If you can not accept it, don't start. Your business has to make you sleep at night

PS. Sorry for bad english!

 

[StarKodomo]

before this forum i thought mlms where only in cosmetics and healthy drinks industries. after this forum i understood that they can be found in different products and industries.

what other industries are mlms in?

One of the "newer" and more interesting ones I've seen is Zumba. Didn't think much about it at first, but when I looked more into it, it definitely has MLM in it.

Basically, if you want to teach Zumba you have to buy into one of their "training" classes, which only happens 4 times a year or so and is several hundred dollars. Once you pass, you get a welcome bag. If you want to continue teaching, you can pay their monthly fee which gets you full access to their network, new songs and new choreography. After that, I believe you have to re-certify yourself every year with another class.

 

[ZF Lee]

Are there any examples of ethical MLM's? After reading about a lot of these MLM's that exist to make money from their "employees" not customers.

The idea of using an MLM to sell a brand/product is great, but screwing over your employees isn't ideal. I want a business that lets me sleep at night.

LOL! I have friends who do these 'legitimate' MLMs like Mary Kay or E Excel and they are deprived of many tools we Fastlaners create to leverage for time.

They have to stick to the company's product line to sell for their commissions. And I? I just call up a web contractor to ask about that new plug-in to put a smile on a hundred customers on that website of mine when it runs better!

These poor individuals are CRIPPLED. They have no venture funding (you need big cash eventually to make the big build), most often deprived of Internet leverage and ability to introduce more personalised offers to make customers happy. Worse of all, they can't adjust quickly to meet the market's needs no matter how loud it screams!

So tell me with the comparison of control between a Fastlaner and an MLM worker....who's gonna get the better sleep?

 

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[ZF Lee]

There are two kind of people in MLM:

the high tiers, selling "the dream". They are aware that 99% of people won't make it, but they'll never tell you.
They PERFECTLY know that the MLM CAN'T work for everyone.

the lower tiers. They join with the dream of a luxury lifestyle, passive income and other bullshits. They are going to lose a lot of money, not only because they are at the lowest level, but because often they are employees, housewives, young guys who have no idea of what the "entrepreneurial mindset" is.
They think "I'll talk with two friends and then i'll wait for my passive income". And then lose their money.

The system is unethical, but it works. If you start a mlm company and it grows well, that is fastlane.

Of course, remember that a lot of people will lose their money because of your company.
If you can not accept it, don't start. Your business has to make you sleep at night

PS. Sorry for bad english!

Don't worry. Your English is fine!
Hah! When people start seeing the devil as angels of salvation, that's when crap comes.
Entrepreneurs build systems that offer the solution to problems. If you join an MLM, you'll be no better than an EMPLOYEE working in one those systems!

Passive income is quite impossible for an MLM gig as the commandment of control is ALREADY violated. You don't own the gig.
Commandment of entry is also violated. Thousands rushing in to make the quick buck. The only way to survive is to be EXCEPTIONAL, and that would eat a lot of energy and time....how passive
Commandment of scale is also VIOLATED. Most MLMs force you to go stone-age and go house-to-house instead of making a system that DOES THAT for YOU.
Commandment of time is screwed as you would be busy chasing after that sales title or promotion.....like a dog after its tail....
Commandment of need would also be VIOLATED if you went in there the first place for the grand magic words of

'passive income'
'be your own boss'
'financial independence'

Those needs aren't the markets...it doesn't give a rooster's a$$ about it.

Well unless you own the MLM, you are pretty much screwed. Man, I wish more people knew about this! I thought only the bad went to hell...

 

[amp0193]

Basically, if you want to teach Zumba you have to buy into one of their "training" classes, which only happens 4 times a year or so and is several hundred dollars. Once you pass, you get a welcome bag. If you want to continue teaching, you can pay their monthly fee which gets you full access to their network, new songs and new choreography. After that, I believe you have to re-certify yourself every year with another class.

What you're describing sounds more like a franchise model.

The cornerstone of MLM is that you make money on the "downline". Meaning, you don't really make money, unless you get people under you selling, and they get people under them selling... etc.

 

[JAJT]

The problem with MLM in the traditional sense is that you actually make most of your money through your employees rather than customers.

The reps themselves are trying to buy large amounts of your product for the best discount levels but usually can't sell much of it through their own network so they give up on retail sales and move onto the recruitment aspect which is the hallmark of MLM programs. These new reps under the first rep are encouraged to buy huge amounts to get the best discount levels.... rinse and repeat. And the other problem is the whole "just hire 10 people under you, easy!" but if everyone under the first was able to recruit 10 people you'd run out of people on earth in very short order so even the recruitment side of things is a bit of a farce.

It has scale and you can get pretty wealthy doing this but personally I'd feel pretty shitty about the whole thing. I want to make money from customers who value the product being sold, not my own employees.

 

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