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Time now: Thu May 17, 2012 11:57 pm
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DBeavers
Advisor
Joined: 07 Jun 2004
Posts: 155
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| MLM or Network Marketing isn't for everyone! |
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The long term statistics show that 90% or more of people who get involved in MLM or NW opportunities quit without seeing any profit. Compare what those 90% see after 3 to 6 months, and even minimum wage for a part-time job doesn't look so bad.
Not that I could live on minimum wage, but many of those who are "sold" on joining, aren't signing on for $200 additional monthly income after two years. They are looking for the gold that is being hyped by too many companies and too many promoters/recruiters.
When was the last time you looked at an MLM brochure, website, or video presentation that didn't feature sports cars, Hummers or Cadillac Escalades. Then they show the families on yachts, cruise ships or tropical islands, only to return home to their big brick mansion.
Two weeks or two months later it begins to dawn on them that all the cash flow they have seen is going away from them. Money for front-loaded inventory, monthly autoship, meeting fees, lists of MLM opportunity seekers, training materials, etc.
At least with the part-time minimum wage second job, they could have earned enough extra income to pay for a modest vacation after 3 months.
How many MLM pitches have you read or heard that included the phrase, "No selling!". Yet, the profits are generated from product-based sales. So, someone has to sell something, or there will be no commissions. You cannot consume yourself to profits, anymore than a gov't can tax it's citizens into prosperity.
Salespeople have been known to sell cars, appliances, even music lessons by telling people exactly what they want to hear. MLM is no different. They tell the people the money is there for anyone who is willing, without selling or hard work.
No wonder the drop out rate is so high!!!
And I'm actually one of those people in the middle who believe MLM/NWM is viable - for some. Unfortunately, too many companies and upline sponsors have built their downline based on the "easy" profit, big money hype that has never changed since the early days of A _ _ _ Y.
My post is not a slam against any one Multi-Level Marketing companyThis is one industry that has left a lot of "roadkill" in its passing. Many friendships and family relations may never recover the effects that the "warm" market recruiting has done.
And some of the dropouts lost money they couldn't afford to lose.
On the other side of the equation, some, a tiny percentage have made good money, while an even smaller percentage (less than 1/2 of 1%) have seen the six figure incomes that have been touted so highly. Of those with positive cash flow, the average distributor earns less than $249 per year, or $20 per month. That represents their company check and may not reflect the amount they spent on the products they consumed.
How many people who stumbled within the three foot circle of a MLM distributor/recruiter would have given 10 minutes of their life, much less 10 hours or 10 weeks and a couple hundred dollars if they had been told that less than 1/2 of 1% would ever reach the goal.
My granddaughter probably has a greater likelihood of becoming a tennis star. My soon expected grandson has a greater likelihood of getting a starting position on a major league college football team.
JMO!
Dennis |
Wed Jun 29, 2005 4:19 pm |
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LottomagicZ4941A
Joined: 27 Aug 2005
Posts: 28
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I've seen lots of material that is product oriented.
Juice Plus for example. Of course they product load people so they probably wouldn't want to put that on the pamphlet.
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Lotto
http://www.flalottomagic.net/?sponsor=Z4941
MagicZ4941A 1-877-526-6957 ID Z4941A
PS if Jesus were a cat would he have turned the water into milk? |
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Sat Aug 27, 2005 9:18 am |
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LottomagicZ4941A
Joined: 27 Aug 2005
Posts: 28
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Intresting on the sports. We don't call football a scam because so few can become pro foot ball players.
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Lotto
http://www.flalottomagic.net/?sponsor=Z4941
MagicZ4941A 1-877-526-6957 ID Z4941A
PS if Jesus were a cat would he have turned the water into milk? |
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Sat Aug 27, 2005 9:20 am |
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DBeavers
Advisor
Joined: 07 Jun 2004
Posts: 155
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| Poor analogy |
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Hi Lotto,
In pro football, they don't require the players to pay to play. They don't turn the players into distributors who have to buy the product (tickets) and sign up others to sell the tickets.
They don't front-load the players with or require them to sign up for a monthly drop-shipment of tickets.
Those who didn't make the cut to play, didn't invest hundreds or even thousands of their own dollars, let them in for 3-6 months, selling them more classes, and then bad mouth them when the didn't make the team.
Yes, some may be invited to training camp, go through weeks of exercise and drills, along with classes, but they don't call it a conference and charge them for attending. Those who weren't invited didn't pay the team for the chance to become one of them. Those who were invited were paid a small amount per week, even if they didn't make the team, and there expenses to participate were covered.
You might want to look for something that comes a little closer to the MLM experience.
Dennis Bevers |
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Sat Aug 27, 2005 1:47 pm |
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DBeavers
Advisor
Joined: 07 Jun 2004
Posts: 155
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quote:
Originally posted by LottomagicZ4941A
Intresting on the sports. We don't call football a scam because so few can become pro foot ball players.
I omitted the college athletes who don't make the pros.
Most of them who are shooting for NBA, MBA, or NFL are attending a 4 year university on a partial or full scholarship. So instead of paying to join, having to recruit others to attend the school, and pay to attend training camps, they are given free room and board, as well as tuition. Oh yeah, many of them are actually attending classes, and if they put for the effort (Due Diligence), getting a college education that will prepare them for a career outside sports.
Many of those who don't make the pros, can at least have some name recognition in their hometown and the local market, providing them an excellent option for a career in sales. Lots of sports boosters and general fans, love to buy from someone who has a little celebrity status.
One of the top local insurance agents in my market, played on the champtionship team when LSU made it to the top back in '59. (or possibly '58 - I'm not a big LSU fan.)
Even those who don't make a career off of sports can't be compared to the 90% failure rate (actually had a net loss of money after 3 months to 3 years).
Comparing college students who graduated and couldn't find a job in their degree field would have been a better comparison to the MLM failure rate. But, 90% of college grads don't end up on the losing end of the bargain.
I didn't finish college, as my studies were interupted by the expected birth of my third child. But, I'm still using and benefitting from much of what I learned during my 2 1/2 years in college.
Dennis Bevers |
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Sat Aug 27, 2005 4:04 pm |
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Divamom
Joined: 24 Aug 2005
Posts: 11
Location: NY |
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Great thread, and very valid points on MLM/NWM and not to say that I too have not tried network marketing I have and still am involved in it very much. I was with a big company, no it did not work for me and yes I truly believe it could have in a different time but not now.
What started out good as far as support and help from my sponsors turned out to be a to not the case now.
I went from receiving a email twice a week to nothing all this year. I see this happening a lot and many who are joining these companies are not willing to just move on and do what they need to do any way. Don't rely on anyone to do the work for you, sure many are promising the world or close to it but if you are truly serious about building a business you would do your own research to learn this business it takes at least 3-5 years to really to make money in network marketing.
Why does NWM get such a bad rap. No one does this when people say Avon or Herbalife, or watkins. Many of these companies are based on the same compensation model as NWM. thanks
M.
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Wed Aug 31, 2005 9:29 pm |
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DBeavers
Advisor
Joined: 07 Jun 2004
Posts: 155
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| RE: Avon, Watkins, etc |
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You could throw in Mary Kay as well. The big difference is that while based on Multi-Level Marketing, the focus is still on finding customers, and selling to those customers again and again.
Many of the MLMs that struggle, and the participants who lose on their investment, have changed to model to consumption by dealers, and sponsoring additional dealers, who also have to sponsor additionals dealers, ad nauseum.
You can't make it on consumpition by distributors alone. That doesn't generate profits. It is based on moving the product where you force the distributor to become a customer. All you have a savings off the inflated prices required to pay all the checks to those in the upline.
Avon, Watkins, and Mary Kay products have been sold quite successfully for over 20 years, using the MLM model. Build a customer base, retail the products, and convert some customers to distributors to grow your total volume.
Dennis Bevers |
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Thu Sep 01, 2005 4:55 am |
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Divamom
Joined: 24 Aug 2005
Posts: 11
Location: NY |
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I agree Dennis, as I continue to learn more about this industry I also see that many including myself are not using a proven system at all. At least this was the case with my former company.
Not that it has to prove it works but having some type of system that any and everyone no matter who you or level of experience in network marketing can plug into is key IMO to running a home-based business. This goes for the direct sales industry as well, I don't see very much difference here but many would probably disagree with me on that point.
Having a system in place that everyone can plug into no matter if they have a sponsor or upline at all is very important. Because you will plug in the system, for everything. Also being trained professional is key as well. I am learning that now as well. With my former company I fell they were and are to big for their own good in some cases. I feel it is a great company and would be great for anyone looking to start in this industry, I would highly recommend them no questioin espeically if they are a beginner. Low start up cost to start, but monthly requirements are required to make money but they could still build a business until they are ready to really build the business. Many need this and look for it in a NM company.
On the other hand in some cases, IMO free hurts many as well. thanks
Michelle
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Tue Nov 01, 2005 5:05 pm |
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LottomagicZ4941A
Joined: 27 Aug 2005
Posts: 28
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I took to much offence to this thread initially.
MLM isn't for everyone your right. It isn't for quiters or people who have to low of self esteem to sell.
Most don't have the talent for football. So MLM is a more viable option for people like me.
_________________
Lotto
http://www.flalottomagic.net/?sponsor=Z4941
MagicZ4941A 1-877-526-6957 ID Z4941A
PS if Jesus were a cat would he have turned the water into milk? |
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Sun Nov 27, 2005 12:58 am |
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DBeavers
Advisor
Joined: 07 Jun 2004
Posts: 155
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| MLM definitely not for everyone |
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Lotto,
You posted -
MLM isn't for everyone your right. It isn't for quiters or people who have to low of self esteem to sell.
Most don't have the talent for football. So MLM is a more viable option for people like me.
You still don't get it. If 90% of those who invest money in an MLM lose money doing so, then it definitely isn't for everyone.
Part of the high failure rate can be attributed to the number of MLM companies that should never have been in business in the first place. These companies rarely make it to the five year milestone. So anyone joining one of these ill-conceived and short-lived companies has only a small chance of earning real money before the company fails. I don't think you would recommend this type MLM to anyone. But, if someone found themselves in such a company, I would recommend they get out as soon as practicable.
Would you label that person a quitter!
Many people join an MLM because of the person who recruited them. Because recruiting in MLM often pays better than sales, everyone becomes a potential source for income. Occasionally, someone is recruited who should never have been in any kind of business. Once they find out the opportunity isn't right for them, they will decide to get out. So they are also labelled "Quitter" in your book, while I recognize that they have learned more about themself and their limitations.
You keep going back to your football analogy. I'm sorry football wasn't one of your strongpoints. I enjoyed it, but only as a player in the school yard. With my weight (80 - 90 lbs in high school), I was never a prospect for the team. But, I don't compare my unsuitability in the same leage as failing at MLM. You have posted on this three times.
The high schools, university, and professional teams aren't selling memberships. They aren't a business for the players to join and buy inventory. They don't require the ones who make the team to recruit others to the team. The players don't have to buy season tickets or "X" tickets per game and then go out to sell the tickets to others. It isn't a business model.
MLM recruits people, who in turn, are encouraged (sometimes it's a requirement to be successful) to recruit others, who are then trained to recruit others, who also must recruit others in order to make any money with the company. Those who expect to sell the products may even be discouraged from selling. They are often taught to recrit first, and only sell products to those who won't join.
Football doesn't fit any business model, so using MLM as a viable alternative to earning money in sports doesn't add up. You are comparing apples to elephants. There is no relationship that can be rationally drawn. The only people who earn money in pro-football besides the owners are employees. There are millions of jobs that you are unqualified to do.
So should you jump into an MLM because you didn't make the cut to be an astronaut, drive for a NASCAR team, or operate a nuclear reactor?
I failed in 3 separate attempts at MLM. I lost money with two of them. I learned I wasn't right for MLM.
I later started my own business, which I have been successful in for over nearly two decades. I consider my ventures in MLM to be learning experiences. Yes I quit.
But, consider that half of all US businesses will fold within 10 years of starting. The other half that survive represent a much better average than the 10% success rate for all MLMs.
I joined those MLMs because of the people who recruited me. Once by my Dad, once by my sister, and once by a total stranger. The results only varied when I saw the benefit of the products and wanted them for myself. The others were merely overpriced alternatives to similar products on the market.
The MLM distribution method adds considerable cost to the products, in order to generate the money that has to be paid to an upline of 3 to 12 or more layers. It works for some products, but not all.
Comparing MLM to any other business model has value. Comparing MLM to not being able to earn money playing pro-football has no basis. With a proven 90% failure rate, I'd hardly label the 90% as quitters.
MLM isn't for everyone. Certainly for the 90% who lose money at it. Day trading may have similar results, so it might make a better comparison for you.
Dennis Bevers |
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Sun Nov 27, 2005 5:12 pm |
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TheDiamond
Joined: 15 Jan 2006
Posts: 4
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| Re MLM |
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Hello
What do think of Revolving System? Since there are only 4 levels, everyone has equal opportunity to achieve success. (benefit: No one remains at the top, the people at the top go to the bottom pushing the people at the bottom up to the top. No board will be left behind for long).
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Canadian Diamond Traders
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Sun Jan 15, 2006 7:23 pm |
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DBeavers
Advisor
Joined: 07 Jun 2004
Posts: 155
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| I have heard of revolving systems... |
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but have yet to hear of one that lasted any length of time.
Unfortunately, such a system rewards the laziest and most incompetent joiners at the same level as it does those who put for all the effort. Today you are on top, tomorrow you are replaced by someone who just paid the fee and hasn't done anything more than invest their money.
Every fourth level you are on top. Once you are at the bottom, you have incentive to work to complete the cycle. The laziest loser in the cycle merely has to continue breathing while you and the other two layers work to complete the cycle!
It's hard to soar with eagles when you work with a bunch of turkeys! So, you better insure the 3 above you and the 3 below you are also eagles, or you'll be pulling part of their load.
I prefer a system that rewards me personally for my sales, as well as offering me incentive to sponsor, train, and be a mentor to others. I found it 13 years ago, and haven't looked back.
The biggest limit is that it is restricted to people who live in the US. That doesn't limit me, except that I only have a population around 280 Million people to work with. More than I can contact in my lifetime.
Dennis |
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Sun Jan 15, 2006 8:57 pm |
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lisa1979
Joined: 03 Feb 2006
Posts: 7
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MLM is normally the cheap way to get into business!
Especially when you have a good upline
Lisa
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Thu Feb 09, 2006 3:06 pm |
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DBeavers
Advisor
Joined: 07 Jun 2004
Posts: 155
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| Cheap, but only if it works. |
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quote:
Originally posted by lisa1979
MLM is normally the cheap way to get into business!
Especially when you have a good upline
Lisa
Ninety percent or more of all people who join an MLM quit before recoveing their investment and any expenses spent trying to develop the business.
For those 90% it wasn't cheap.
Dennis Bevers
BASSCO, Inc. |
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Fri Feb 10, 2006 4:10 am |
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lisa1979
Joined: 03 Feb 2006
Posts: 7
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It depends how much they are paying!
I first started using my product as a player only. when I saw my friends were interested I upgraded to affiliate allowing me to introduce them. Becoming an affiliate was only a nominal fee (about $10) a year so it wasn't really any major investment.
But I see your point. Some MLM's require a massive outlay
Lisa 
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Fri Feb 10, 2006 9:43 am |
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