Mlm

[Nahush]

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[Lucas]

Originally Posted by Caveman Joe

There is no business that can guarantee success. I don't know where you got the idea that there was.

I apologize if I misunderstood. Mainly I wanted to know what the business opportunities you were talking about that have a higher chance for success? I would be inclined to think that all businesses have the same chance of surviving when done by the same person. So if I were in and MLM or opening up a brick and mortar store, I still have the same chance of profiting, because it really depends on me.

MLM's don't use word-of-mouth advertising. They pay people to sell for them, just like other companies pay telemarketing firms - except that instead of selling to random people, most people end up selling to (and recruiting) friends and family members. It's not word-of-mouth if money changes hands.
ASDA is the biggest supermarket in the UK, and recently merged with Wal-Mart. ASDA, Tesco, Sainsbury's and Morrisons are the UK's "Big Four" supermarket chains.

I can get behind that statement. That's another thing I forgot to mention though, you need to join a company whose products you would be using regardless of if you were a distributor. Thanks for clearing up the ASDA thing for me. MLM is a lot like Steve's affiliate links, in the sense that while he is getting paid when you buy the products, he still believes in the product.

Are you saying that MLM companies wouldn't like to have their products sold on ASDA's shelves? It'd certainly shift a few units. No, I don't think that's the case. I think the problem is that the Big 4 don't want anything whatsoever to do with MLM, and prefer to stick with a business model that has proven itself to work.

It depends on what it is I guess...I mean the company I am in, couldn't possibly even do that, since store shelves are the antithesis of the products, hehe. In general, I would say no, they don't, because they made a conscious decision to go with MLM as their business model. I would like you help me understand why MLM has not been proven to work? Amway is over 50 years old will millions of distributors. Avon, Mary Kay, Tupperware and Partylite (to an extent) are household names (in the US at least). It is just as successful a model as the traditional one in terms of how many succeed and how many fail.

If you can make a living in MLM, then fine, go ahead and do it. I just think that if you have the determination to make money in MLM, you have the determination to make money in anything, and you really should be working for yourself instead.

I thought that way too a couple years ago, and it makes perfect sense to me. Personally, I chose network marketing so that I could utilize my strengths. I am good at talking and writing. I can do that, and the whole back end support system is there for me. I didn't have to develop marketing systems, figure out duplication models, basically I plug into my system and do what comes natural for me. Since MLM goes hand in hand with personal development, I can still brand myself and be differentiated from other distributors. I am working for myself, but promoting a product I love. It is win-win for me.

[Ilya]

The thread is quite long now and I'm seeing all familiar arguments for and against the MLM. I've had my negative MLM experience. In my teens I've actually signed up for the scam version of it - there was no product just a lot of recruiting. Before I've stopped I've recruited my dad, and my grandmother. And Collectively we've ended $10000 in debt. You can imagine the strained relationships.
Still, I've kept an open mind towards the genuine MLM for all these years and many times listened to the various presentations. And I was thinking hard about why isn't MLM working as advertised. This thread is a good summary of my thoughts over the years.
Recently I've had another insight on the subject. I think that the main problem with MLM is that it is not the kind of business most people think it is. MLM is not a sales business. It is an education business.
Let me explain. To be successful in MLM you need to sale the product and you need to build the team of recruits. These are the two key components. And the second is much more important if you want the passive income.

Your recruits also have to be good sellers and to be good at building their downlines. But if you are a usual person, the people that you are able to recruit are neither good sellers nor good at building their teams. And it is your responsibility to teach them how to do it. So, what does it mean to you? Apart from being a good salesman you have to be a good business trainer. The one that can train other people to become good salesmen and good business trainers. Plus, you have to so good that the quality of teaching does not degenerate down the line as it usually does.

I happen to know a few people in business training community. I know that the least it takes a talented person to become such a trainer is about 3 years. Even then, the good result for a trainer is that the salesmen he has trained improve their results by about 10 percent. I know that there is just a handful of people in Russia who are good enough trainers to teach other trainers.

In MLM, each new member is expected to deliver this kind of results.
I don't say it is impossible. I think the few people who are successful in MLM are doing just that - they educate their teams and watch the quality of the team until it's successful enough.

And the real problem is that there is not much people whose life purpose is so nicely aligned with being a salesman and an educator to keep them going long enough. And it is years.

There is another way, however. Imagine a person who is successful in another area of life, has a huge social network and is trusted by a lot of people. In this case, he can add MLM to his portfolio, by just "selling" it to his network. By the sheer size of it he will jumpstart the whole process and then success will breed success. There will be some educators there and some good salesmen. And soon, such person will be earning ridiculous sums of money from MLM. Of course the people who will come after him will still have to go all the way through learning, teaching etc.

And this would not be the problem by itself. But MLM is not the only money making opportunity in the world. However, since it is time intensive it usually prevents the person from pursuing the other chances in life. And in my opinion it is just too high of an opportunity cost. By putting the same effort that is necessary to be successful in MLM into anything you'll become successful. And it may be your own business, not tied to someone else's single company.

[Addict]

MLM is not a sales business. It is an education business.

Exactly what is wrong with MLM.

[Lucas]

Originally Posted by Ilya

The thread is quite long now and I'm seeing all familiar arguments for and against the MLM. I've had my negative MLM experience. In my teens I've actually signed up for the scam version of it - there was no product just a lot of recruiting. Before I've stopped I've recruited my dad, and my grandmother. And Collectively we've ended $10000 in debt. You can imagine the strained relationships.

Did you have a bad experience with MLM or did you get scammed? MLM is a completely legitimate business model by the standards of the FTC, so it seems like you (like many), are considering MLMs and Scams to be one in the same. I understand you got burned, and I can empathize, but I think it is important that we keep them separate.

Still, I've kept an open mind towards the genuine MLM for all these years and many times listened to the various presentations. And I was thinking hard about why isn't MLM working as advertised. This thread is a good summary of my thoughts over the years.
Recently I've had another insight on the subject. I think that the main problem with MLM is that it is not the kind of business most people think it is. MLM is not a sales business. It is an education business.
Let me explain. To be successful in MLM you need to sale the product and you need to build the team of recruits. These are the two key components. And the second is much more important if you want the passive income.

Your recruits also have to be good sellers and to be good at building their downlines. But if you are a usual person, the people that you are able to recruit are neither good sellers nor good at building their teams. And it is your responsibility to teach them how to do it. So, what does it mean to you? Apart from being a good salesman you have to be a good business trainer. The one that can train other people to become good salesmen and good business trainers. Plus, you have to so good that the quality of teaching does not degenerate down the line as it usually does.

I happen to know a few people in business training community. I know that the least it takes a talented person to become such a trainer is about 3 years. Even then, the good result for a trainer is that the salesmen he has trained improve their results by about 10 percent. I know that there is just a handful of people in Russia who are good enough trainers to teach other trainers.

I can agree with you there for sure. It definitely takes a certain kind of mindset to do MLM, but I don't think you need to be a good trainer per se, as much as being able to show people methods that they can act upon. Most of the stuff you have to do is motivational and perspective oriented. People get into this model, coming from an employee model and expect something for their time right away instead of looking at the big picture. Imagine if you said to most people who are employees "If you worked hard for two years with little to no pay, and then had to work little or not at all for the rest of your life, would you do it?" Most wouldn't. Most people want results now, and paid for their time. I completely understand that, it makes perfect secure sense. It's a tragedy that our industry attracts people in that aren't ready to shift paradigms, or don't want to.

In MLM, each new member is expected to deliver this kind of results.
I don't say it is impossible. I think the few people who are successful in MLM are doing just that - they educate their teams and watch the quality of the team until it's successful enough.

And the real problem is that there is not much people whose life purpose is so nicely aligned with being a salesman and an educator to keep them going long enough. And it is years.

Are you drawing this off of your experience in the scam, or an actual MLM? No one is expected to do anything. You are 100% responsible for your results. Does your upline have a vested interest in your success? Yep, and so does the company, so they are more than willing to provide tools, training and coaching to help you get where you want to be, and you can take as much time as needed to shift mindsets. I definitely agree that not everyones purpose is aligned to sales and education, but almost everyones is aligned to helping other people. MLM is all about helping others, whether it be to succeed, to make more money on the side, become rich, to make passive income, to shift mindsets, to be healthier, to get people quality products, whatever.

There is another way, however. Imagine a person who is successful in another area of life, has a huge social network and is trusted by a lot of people. In this case, he can add MLM to his portfolio, by just "selling" it to his network. By the sheer size of it he will jumpstart the whole process and then success will breed success. There will be some educators there and some good salesmen. And soon, such person will be earning ridiculous sums of money from MLM. Of course the people who will come after him will still have to go all the way through learning, teaching etc.

You are right. Some people have advantages over others, it happens. The brilliance is that you can go about it with your strengths. Are you good at programming? Set up websites to help you. Good at sales? Join a Direct Sales Company. I am good at speaking and interacting, so the majority of my business is done through people I know in life, or people I meet in life. There is a myriad of ways to go about it.

And this would not be the problem by itself. But MLM is not the only money making opportunity in the world. However, since it is time intensive it usually prevents the person from pursuing the other chances in life. And in my opinion it is just too high of an opportunity cost. By putting the same effort that is necessary to be successful in MLM into anything you'll become successful. And it may be your own business, not tied to someone else's single company.

Again you are right, there are millions of business opportunities in the world. If someone did not consciously make a decision on MLM, does that mean that it is the MLM industry's fault? MLM is about making small, consistent actions every single day. It is only as time intensive as you make it, and everyone is going to have different pacing.

I considered going into my own business before, but I looked at my strengths, and decided that I did not want to create all these systems to run a business from the ground up. At least not now. I don't have the capacity. I think ego can get in the way thinking "hey I can do this all myself", and maybe you can, and it looks like Steve can too, but we are all different. I chose to utilize my strengths, and leverage someone else's systems. I don't want to reinvent the wheel, I want to be myself and make money doing it.

Good luck to you man, I appreciate your views in this discussion!

[Peter S C]

I have been pitched MLM opportunities on 2 occasions now (for 2 of the biggest MLM companies worldwide). Whilst I didn't get involved in the MLM opportunities, I did investigate them enough to decide I didn't like them. Here is an article I have written about the experiences:

My Beef With Multi-Level Marketing

[Lucas]

Originally Posted by Peter S C

I have been pitched MLM opportunities on 2 occasions now (for 2 of the biggest MLM companies worldwide). Whilst I didn't get involved in the MLM opportunities, I did investigate them enough to decide I didn't like them. Here is an article I have written about the experiences:

My Beef With Multi-Level Marketing

I appreciate that article, and I really like how you declaimed at the end about those being your only experiences with it, and happily deciding not to take it on. There are multitudes of opportunities out there, and just as many approaches to doing the business. The thing is that most people only notice that it is MLM when they have had a bad experience. Many people buy from Network Marketing companies and don't associate the stigma to it, like TupperWare or PartyLite. There are shady tactics in every business, but I find with mlm that many times people will disregard the entire industry. If you buy a Dell and feel like you get the runaround by service or claims made, do you refuse to look at computers ever again? Not likely.

Personally, for people who want to start a business quickly and easily, I can't think of a better way.

The problem I see with the warm market issue, is people club their friends and family over the head because they refuse to leave their comfort zones. You can only pitch your family so many times. Not only that, sometimes people are so eager to make money or sign someone up that they don't give their friends and family the whole picture...and that can burn some bridges.

Most of the problems in MLM don't come from the business model, but that some people shouldn't be there, or they have ridiculous expectations.

Still a great article, and I am grateful you didn't try and steer people away from the industry. Lot's of people do this on a whim, but to succeed you need to do you due diligence on opportunities, companies, products, comp plan, etc.

[richie]

Mlm sucks and yes it's no damn business but a scam
proof # 1. why a particular product is sold as an mlm and not through traditional ways? - The product is crap and not of a value of the cost at which it is sold. if a product is worth 50$, its sold at 1000$ by overhyping it through mlm
Do you see iphone sold through mlm
Proof # 2. you cheat your friends and family into buying the product, which has no much value of its own.
Proof #3. you get fooled of getting financial freedom and then you sell the same wrong dream to your friends and family.
Proof #4. The basic rule of an mlm is those who are on the top, wins it all and most of the people in the bottom looses. There are limited number of people so no matter what, the system is bound to crash making millions below the line waste their money.

I have seen sane people go insane due to this stupid mlm stuff.
I have seen the industry completely from all its angles, but its nothing escept waste. I had also planned to start my own mlm and even created a website for it, but its something you have to sell your soul to do it, hence I never did it and always guided people to save themselves from the mess.

[Lucas]

Originally Posted by richie

Mlm sucks and yes it's no damn business but a scam
proof # 1. why a particular product is sold as an mlm and not through traditional ways? - The product is crap and not of a value of the cost at which it is sold. if a product is worth 50$, its sold at 1000$ by overhyping it through mlm
Do you see iphone sold through mlm
Proof # 2. you cheat your friends and family into buying the product, which has no much value of its own.
Proof #3. you get fooled of getting financial freedom and then you sell the same wrong dream to your friends and family.
Proof #4. The basic rule of an mlm is those who are on the top, wins it all and most of the people in the bottom looses. There are limited number of people so no matter what, the system is bound to crash making millions below the line waste their money.

I have seen sane people go insane due to this stupid mlm stuff.
I have seen the industry completely from all its angles, but its nothing escept waste. I had also planned to start my own mlm and even created a website for it, but its something you have to sell your soul to do it, hence I never did it and always guided people to save themselves from the mess.

I think it's great that you want to help people. I do differ a little in opinion on these points, but it is no means to try and change your mind, but for people who want all sides of the equation.

1. Because a product is sold through untraditional methods, it is crap? I hope you would help me to understand the train of thought behind this. At one point InfoMercials were untraditional, same with sales through the internet. I don't understand how the method of sales makes the product itself have less value? Please clear this up if you would.

2. Did you cheat your family? Who did that? Did MLM force you into cheating your friends and family? Why would you cheat your family? I have showed my family products, and no one has bought anything from me at all outside of their own accord. Did you pick a product you weren't happy to share with people? Again, could you clarify how you cheat your family?

3. Financial freedom doesn't exist? I am sorry that it didn't work out for you, but it is an attinable goal, through multiple streams of passive income, in which MLM is only one option. There are many routes, but to say that financial freedom is a "wrong dream" is a little crass, inoffensive and untrue...wouldn't you say? Unless I am missing something.

4. That sounds a lot like the traditional business structure here in the US. If not, then why does the CEO drive a Ferarri and the factory worker drive a Ford? Pareto's Law really accounts for everything...the 80-20 rule. 20% of the employees will make 80% of the income. 20% of your effort will yield 80% of the results, however in MLM there is room for everyone if they so choose it. Most people choose not to.

I am not saying that there aren't people who fail at MLM, in fact just like most businesses, the failure rate is high. That isn't necessarily the fault of the industry.

I am sorry you had a bad experience with MLM. I have had nothing but positivity, honestly.

[richie]

Originally Posted by Lucas

I think it's great that you want to help people. I do differ a little in opinion on these points, but it is no means to try and change your mind, but for people who want all sides of the equation.

1. Because a product is sold through untraditional methods, it is crap? I hope you would help me to understand the train of thought behind this. At one point InfoMercials were untraditional, same with sales through the internet. I don't understand how the method of sales makes the product itself have less value? Please clear this up if you would.

2. Did you cheat your family? Who did that? Did MLM force you into cheating your friends and family? Why would you cheat your family? I have showed my family products, and no one has bought anything from me at all outside of their own accord. Did you pick a product you weren't happy to share with people? Again, could you clarify how you cheat your family?

3. Financial freedom doesn't exist? I am sorry that it didn't work out for you, but it is an attinable goal, through multiple streams of passive income, in which MLM is only one option. There are many routes, but to say that financial freedom is a "wrong dream" is a little crass, inoffensive and untrue...wouldn't you say? Unless I am missing something.

4. That sounds a lot like the traditional business structure here in the US. If not, then why does the CEO drive a Ferarri and the factory worker drive a Ford? Pareto's Law really accounts for everything...the 80-20 rule. 20% of the employees will make 80% of the income. 20% of your effort will yield 80% of the results, however in MLM there is room for everyone if they so choose it. Most people choose not to.

I am not saying that there aren't people who fail at MLM, in fact just like most businesses, the failure rate is high. That isn't necessarily the fault of the industry.

I am sorry you had a bad experience with MLM. I have had nothing but positivity, honestly.

you got it all wrong, let me explain.

1.

Because a product is sold through untraditional methods, it is crap? I hope you would help me to understand the train of thought behind this. At one point InfoMercials were untraditional, same with sales through the internet. I don't understand how the method of sales makes the product itself have less value? Please clear this up if you would.

What i mean by traditional means is directly selling to consumers, rather than mlm. An mlm gives commision to the consumer to sell the product, hence the actual value of the product is very low compare to its sold price, almost 10% in some cases.
2. The product is not worth the price.
They make every customer a salesperson, because they know that there is products is not equivalent or competitive to withstand in general market. they know that when an indivdual listens abt a product from a friend or relative, hes more prone to believe its good[get fooled] even when it's not worth the price. This actually make you look someone who sells your friend and family.
3. Financial freedom does exist. I never said it doesn't. I am myself the biggest earner in my college and have 3 employess working under me (I am 19)
But it doesn't exist in mlm. mlm is a cheap way to sell people their dreams, typical scammers who show people big dreams with no work. Every damn mlm member fakes about his earnings to exhaggerate the earning pottential. The earning maths is very cunningly tricky, which definately shows big earning but its the math you'll never see practically.
Selling people their dreams is exact way of fooling. did you saw microsoft, google doing that?
4.
what you said is only a cover-up. If a person goes into business he expects profit, its not a child game. mlm business don't work when you whole town has the product. whom will all sell too?
these things are scam to its best.

You might be very new to mlm or just don't know all the cards yet.
Try to think as you're the owner of that mlm and then think how much would that product cost if it was not mlm [excluding mlm commisions to give], don't see on exhagerations and don't believe on anything w/o proff and you'll see all the catches.
This are just my humble views on mlm, I still don't say mlm don't bring money [but the money is too less for too much work and its something you don't own], the thing is they are highly unethical, dishonest thing. Its almost like saying lies all day to your friends and family abt the product and the cheques you recieve. I have never joined an mlm but I have seen people do these.
Regards,
Richie

[Lucas]

Originally Posted by richie

you got it all wrong, let me explain.

1.
What i mean by traditional means is directly selling to consumers, rather than mlm. An mlm gives commision to the consumer to sell the product, hence the actual value of the product is very low compare to its sold price, almost 10% in some cases.

There are lots of big companies that don't sell directly to the consumer. You need to locate a distributor to buy their products. Most people don't go directly to the manufacturer to get the products, they go somewhere like Wal-Mart or Amazon. MLM is the same on a smaller scale. Again, if you think I am missing something, then let me know.

2. The product is not worth the price.
They make every customer a salesperson, because they know that there is products is not equivalent or competitive to withstand in general market. they know that when an indivdual listens abt a product from a friend or relative, hes more prone to believe its good[get fooled] even when it's not worth the price. This actually make you look someone who sells your friend and family.

If that is true, why is it that I buy Melaluca products and do not sell them? My girlfriend has bought from PartyLite, and she does not hold parties. I don't like PartyLite stuff, but I think Melaluca products are great and you simply cannot get products like that anywhere outside of specialized markets.

You are right, and if someone is honestly using a product and believes in the value of the product, why not sell it? I have quit sales jobs where I do not like what I am selling.

So you are saying that anyone who buys something from anywhere is being fooled? Or are you just relegating your blanket statements to the world of MLM?

It is not the MLM industry's fault that you were hawking junk to your friends and family.

3. Financial freedom does exist. I never said it doesn't. I am myself the biggest earner in my college and have 3 employess working under me (I am 19)
But it doesn't exist in mlm. mlm is a cheap way to sell people their dreams, typical scammers who show people big dreams with no work. Every damn mlm member fakes about his earnings to exhaggerate the earning pottential. The earning maths is very cunningly tricky, which definately shows big earning but its the math you'll never see practically.
Selling people their dreams is exact way of fooling. did you saw microsoft, google doing that?

What companies did you represent in your stint in MLM? I have yet to meet anyone in my upline or company that ever said that you wouldn't have to work to get where you are, but residual comissions add up over time. Did you ever work in the insurance industry? There are people making more while they sleep than they do the work day. There are investors that do the same thing. There ARE scams in MLM, no denying it, but there are scams in every industry. There is a large income potential in MLM, but you have to work for it, just like in everything.

4. what you said is only a cover-up. If a person goes into business he expects profit, its not a child game. mlm business don't work when you whole town has the product. whom will all sell too?
these things are scam to its best.

I am sorry, but I barely understand you. If English is not your first language I apologize.

People go into business to make money, but those people that go into business either realize that it takes work, or they fail. To me, it sounds like you got caught up in the "dream" bought into an MLM and then it didn't do anything FOR you, and you are now irate. I have had people in my downline call me and say "this is not working for me" and my response is "of cource, because you need to work. Its networking, not netcollectingacheck." If you want to collect a check and not work, try applying for welfare?

I would hope you can do me a favor and show me what product has reached market saturation? Market saturation is a myth. If I am networking in my town and I know a lot of people, say 1000 that I correspond with on a regular basis and they all have my product. Thats barely any of the populous. If it was a saturated market, there are venues all over to market in. This is contracted thinking you are attempting to push on me.

You might be very new to mlm or just don't know all the cards yet.
Try to think as you're the owner of that mlm and then think how much would that product cost if it was not mlm [excluding mlm commisions to give], don't see on exhagerations and don't believe on anything w/o proff and you'll see all the catches.
This are just my humble views on mlm, I still don't say mlm don't bring money [but the money is too less for too much work and its something you don't own], the thing is they are highly unethical, dishonest thing. Its almost like saying lies all day to your friends and family abt the product and the cheques you recieve. I have never joined an mlm but I have seen people do these.
Regards,
Richie

I am glad you have your views, and respect them, but I am a conscious human being that can make my own choices. I am in a network marketing based company right now and I think their product is incredible, unlike anything else on the market, the support of my colleagues is amazing and overly positive and would use the product even if I was not a distributor.

I wish you good luck with your business, but personally I don't have the capability to start on from the ground up, so I am leveraging someone else's systems to do business. You still have to build the relationships needed to do business regardless of what you do, and personally I think network marketing is great for people that don't have the capital to start something or don't have the idea yet to make their own company. You still gain the essential business skills.

[richie]

Originally Posted by Lucas

There are lots of big companies that don't sell directly to the consumer. You need to locate a distributor to buy their products. Most people don't go directly to the manufacturer to get the products, they go somewhere like Wal-Mart or Amazon. MLM is the same on a smaller scale. Again, if you think I am missing something, then let me know.



If that is true, why is it that I buy Melaluca products and do not sell them? My girlfriend has bought from PartyLite, and she does not hold parties. I don't like PartyLite stuff, but I think Melaluca products are great and you simply cannot get products like that anywhere outside of specialized markets.

You are right, and if someone is honestly using a product and believes in the value of the product, why not sell it? I have quit sales jobs where I do not like what I am selling.

So you are saying that anyone who buys something from anywhere is being fooled? Or are you just relegating your blanket statements to the world of MLM?

It is not the MLM industry's fault that you were hawking junk to your friends and family.






What companies did you represent in your stint in MLM? I have yet to meet anyone in my upline or company that ever said that you wouldn't have to work to get where you are, but residual comissions add up over time. Did you ever work in the insurance industry? There are people making more while they sleep than they do the work day. There are investors that do the same thing. There ARE scams in MLM, no denying it, but there are scams in every industry. There is a large income potential in MLM, but you have to work for it, just like in everything.




I am sorry, but I barely understand you. If English is not your first language I apologize.

People go into business to make money, but those people that go into business either realize that it takes work, or they fail. To me, it sounds like you got caught up in the "dream" bought into an MLM and then it didn't do anything FOR you, and you are now irate. I have had people in my downline call me and say "this is not working for me" and my response is "of cource, because you need to work. Its networking, not netcollectingacheck." If you want to collect a check and not work, try applying for welfare?

I would hope you can do me a favor and show me what product has reached market saturation? Market saturation is a myth. If I am networking in my town and I know a lot of people, say 1000 that I correspond with on a regular basis and they all have my product. Thats barely any of the populous. If it was a saturated market, there are venues all over to market in. This is contracted thinking you are attempting to push on me.



I am glad you have your views, and respect them, but I am a conscious human being that can make my own choices. I am in a network marketing based company right now and I think their product is incredible, unlike anything else on the market, the support of my colleagues is amazing and overly positive and would use the product even if I was not a distributor.

I wish you good luck with your business, but personally I don't have the capability to start on from the ground up, so I am leveraging someone else's systems to do business. You still have to build the relationships needed to do business regardless of what you do, and personally I think network marketing is great for people that don't have the capital to start something or don't have the idea yet to make their own company. You still gain the essential business skills.

It is not the MLM industry's fault that you were hawking junk to your friends and family.

how do you know i did that? please don't assume things. I never joined an mlm, I had already mentioned earlier.
Anyway, don't get personal.

Ok, lets get with the very basic. Say you sell a beauty product worth 300$
On every sale there is a commision which go to the referral and its entire upline. say 50$ is the worth of product, the rest money is divided to the referral and upline which is 250$.
In mlm, the products is never worth the price, hence its sold through mlm. because the product makers know it won't withstand the direct competition in general market. A 50$ product is sold at 300$. I know every product has it s margin which go to advertising, profits etc. but in mlm the margin has to be too high to distribute commision.
Hence all mlm products are always of a type whose worth could not be given a range. A beauty product or a medical product don't have a specific range of price.
Do you got the point now? You're buying something way less worth for a more price.
In mlm the c.p. is 10-25% of s.p., thats what is bad. it proves that the product is crap for the price you pay. first agree on this and then we can move to all the points.

[Lucas]

Originally Posted by richie

how do you know i did that? please don't assume things. I never joined an mlm, I had already mentioned earlier.
Anyway, don't get personal.

Ok, lets get with the very basic. Say you sell a beauty product worth 300$
On every sale there is a commision which go to the referral and its entire upline. say 50$ is the worth of product, the rest money is divided to the referral and upline which is 250$.
In mlm, the products is never worth the price, hence its sold through mlm. because the product makers know it won't withstand the direct competition in general market. A 50$ product is sold at 300$. I know every product has it s margin which go to advertising, profits etc. but in mlm the margin has to be too high to distribute commision.
Hence all mlm products are always of a type whose worth could not be given a range. A beauty product or a medical product don't have a specific range of price.
Do you got the point now? You're buying something way less worth for a more price.
In mlm the c.p. is 10-25% of s.p., thats what is bad. it proves that the product is crap for the price you pay. first agree on this and then we can move to all the points.

I apologize for assuming, I guess I got carried away in thinking someone who has such strong opinions on something would have first hand knowledge.

Anyway, it seems as though you are assigning "production cost" as "value". No one sells anything at what it cost them to produce. If that happened, there would be no businesses that made any money. Do you think that it costs Dodge $34k to make a Charger? No way.

Value is not a concrete thing. People assign individual value to things and I find it assumptive of you to think that your idea of value is the same as everyone else's. In fact, one of the strengths of MLM is that people are able to be shown the value of the products. Avon ladies come to your house and do demonstrations, Melaleuca reps will let you try their products so you can see for your self. I let people try my product for themselves and let them make a decision on the value it would provide in their life. I rarely "sell" anything.

I am also done responding to someone who feels the need to tell me to agree with them. So, good luck in your business with 3 employees, it seems at 19 years old you have the business world pinned down. I wish you the best.

[richie]

Originally Posted by Lucas

I apologize for assuming, I guess I got carried away in thinking someone who has such strong opinions on something would have first hand knowledge.

Anyway, it seems as though you are assigning "production cost" as "value". No one sells anything at what it cost them to produce. If that happened, there would be no businesses that made any money. Do you think that it costs Dodge $34k to make a Charger? No way.

Value is not a concrete thing. People assign individual value to things and I find it assumptive of you to think that your idea of value is the same as everyone else's. In fact, one of the strengths of MLM is that people are able to be shown the value of the products. Avon ladies come to your house and do demonstrations, Melaleuca reps will let you try their products so you can see for your self. I let people try my product for themselves and let them make a decision on the value it would provide in their life. I rarely "sell" anything.

I am also done responding to someone who feels the need to tell me to agree with them. So, good luck in your business with 3 employees, it seems at 19 years old you have the business world pinned down. I wish you the best.

Sorry for the delayed reply, I didn't came to forums for long time.
I can say I do have first hand experience because I almost opened an mlm myself, until I found it unethical.
Anyway back on topic,
I did say

I know every product has it s margin which go to advertising, profits etc. but in mlm the margin has to be too high to distribute commision.

Everyone definately has to keep its profit, thats business after all.
But what I want to say is. Say there is a product worth 5$(C.P.), if its bought(S.P.) at 10$ it's ok....[fair play for both the seller and buyer] but in mlm its bought at 50$ (because after the product makers 5$ profit, the rest 40$ go as commisions to the upline)
The 'value' of the product is relative to its price. A product well worth the price at 5$, is not worth the price at 50$.
Hence even if there is a quality product, its never worth the price tag on it, in mlm.

First try to understand the point above, if you understood it, I can prove on the next part why its unethical and a malpractice.

I don't feel the need for you to agree with me, but I have seen people selling their trust, and I feel almost obliged to let people know my experience and information about mlm.
That's the exact reasons, most mlm's are illegal or come in gray areas of law.
anyway I don't want to get to those part or It will never end,
I am definately trying to pin up myself in business world, but its a long way to go. Thanks for your kind words and best of luck to you too.

[Brutha]

Everyone definately has to keep its profit, thats business after all.
But what I want to say is. Say there is a product worth 5$(C.P.), if its bought(S.P.) at 10$ it's ok....[fair play for both the seller and buyer] but in mlm its bought at 50$ (because after the product makers 5$ profit, the rest 40$ go as commisions to the upline)
The 'value' of the product is relative to its price. A product well worth the price at 5$, is not worth the price at 50$.
Hence even if there is a quality product, its never worth the price tag on it, in mlm.

For a lot of products there is a high fixed cost to develop the product and a low cost to dublicate it.

Everyone definately has to keep its profit, thats business after all.
But what I want to say is. Say there is a product worth 5$(C.P.)

It isn't.
A product has a different value to different people. A copy of photoshop CS3 has a different value to me (a student) than to a grafic designer who uses photoshop 8hrs/day to earn his living.

Selling a product through the "traditional" way requires huge set up cost in marketing. You have to tell everyone about the product.
Doing MLM instead requires much less setup cost for the business.

A "fake" rolex can have a tenth of the price of a "real" one and provide the same value to most people.
Why? The customer pays for the brand(with is build through marketing), when he buy's the real one.

There is AIDS medication that has costed twenty years ago over 100 times what it costs now.
Do you thing the people who brought it twenty years ago made a bad deal because the payed so much money for the medication?
After all AIDS medication seems to be a good deal for the price people who have AIDS pay at the moment for the product.

I don't feel the need for you to agree with me, but I have seen people selling their trust, and I feel almost obliged to let people know my experience and information about mlm.

There are unethical people who work in MLM and ethical ones.

[richie]

Originally Posted by Brutha

For a lot of products there is a high fixed cost to develop the product and a low cost to dublicate it.

It isn't.
A product has a different value to different people. A copy of photoshop CS3 has a different value to me (a student) than to a grafic designer who uses photoshop 8hrs/day to earn his living.

Selling a product through the "traditional" way requires huge set up cost in marketing. You have to tell everyone about the product.
Doing MLM instead requires much less setup cost for the business.

A "fake" rolex can have a tenth of the price of a "real" one and provide the same value to most people.
Why? The customer pays for the brand(with is build through marketing), when he buy's the real one.

There is AIDS medication that has costed twenty years ago over 100 times what it costs now.
Do you thing the people who brought it twenty years ago made a bad deal because the payed so much money for the medication?
After all AIDS medication seems to be a good deal for the price people who have AIDS pay at the moment for the product.

There are unethical people who work in MLM and ethical ones.

You said it really kool, But Rolex duplicates C.P. is not same as the C.P. of the branded ones. Because the brand building done by rolex through advertising also adds to the C.P. of rolex watches.
Hence the c.p. is always constant
Formula for C.P. [Manufacturing cost + Distribution cost + Advertising Cost + many other similar cost]
Value depends on 'supply and demand' [hence, you can say it depends on price of the product, which is obviously decided by supply/demand] not on personal beliefs but on a general beliefs of all the consumers regarding the product.

[Brutha]

Formula for C.P. [Manufacturing cost + Distribution cost + Advertising Cost + many other similar cost

The 90% you talk about above goes to Distribution/Advertising/Sales in Network marketing.

The company doesn't need to advertise a product it wants to sell through network marketing. As an altantive it can spend that money on the "Network Marketing Model".

Value depends on 'supply and demand' [hence, you can say it depends on price of the product, which is obviously decided by supply/demand] not on personal beliefs but on a general beliefs of all the consumers regarding the product.

There are products with a high first unit cost and a low second unit cost where the supply of the product is practially infinitive (a book or DVD home study course for example).
Most Networking marketing products are in a nich where the company has full control over the supply.

Network marketing allows the company to pay people to sell unit, with little up front cost (a marketing campain is costly).

[Lucas]

Originally Posted by richie

Sorry for the delayed reply, I didn't came to forums for long time.
I can say I do have first hand experience because I almost opened an mlm myself, until I found it unethical.

You almost opened one? So, in reality, you have never been involved in a functioning MLM?

Everyone definately has to keep its profit, thats business after all.
But what I want to say is. Say there is a product worth 5$(C.P.), if its bought(S.P.) at 10$ it's ok....[fair play for both the seller and buyer] but in mlm its bought at 50$ (because after the product makers 5$ profit, the rest 40$ go as commisions to the upline)
The 'value' of the product is relative to its price. A product well worth the price at 5$, is not worth the price at 50$.
Hence even if there is a quality product, its never worth the price tag on it, in mlm.

Like Brutha already said, value is relative. Now, you seem to be relegating this cost/price thing to just MLM products and companies. This doesn't just happen here. For instance a friend of mine and I worked at a call center that sold a name brand heater through Direct Mail, a "traditional" marketing method. The heaters cost about 40 bucks to make and sold for 400! Thats a 10x markup...and you know what else, there have been over a million of them sold! So obviously they have a value of 400 bucks. Many people wouldn't pay that, but there sure are enough people around that would. Is that wrong? Not really, it's called business. I dunno, but I feel as though you think the margins on most products are tiny, when in fact you would most likely be surprised.

Another example - Feline Pine is a great cat litter made of compressed pellets of pine sawdust. It runs about 9 bucks for a 20 pound bag at PetsMart and the like. However, it is the same thing as wood stove pellets you can buy at Lowe's or a home and garden center for 9 bucks for 40 lbs. It's a re-niching of a product. Is that wrong? Not really, it makes it available to a whole new audience and the person who did it makes money. Again traditional business.

First try to understand the point above, if you understood it, I can prove on the next part why its unethical and a malpractice.

Richie, I completely understand your point. I just don't agree with it. Now if your points hinge on someone agreeing with your every word, well, you may not get too far in a discussion, because that rarely happens.

I don't feel the need for you to agree with me, but I have seen people selling their trust, and I feel almost obliged to let people know my experience and information about mlm.
That's the exact reasons, most mlm's are illegal or come in gray areas of law.
anyway I don't want to get to those part or It will never end,
I am definately trying to pin up myself in business world, but its a long way to go. Thanks for your kind words and best of luck to you too.

Are you sure about that? Why do you keep waiting for me to agree until you can go on?

A true MLM is not illegal. If it is illegal, it is not an MLM it is a SCAM. MLM =/= SCAM. SCAM =/= MLM, they are not one in the same. Not even according to the FTC. They define MLM as a viable business model.

I hope you do well though, I really do.

[webwhiting]

Hello,

I have never had much success with it.

Infodocktor