Mlm

[Pavel Alasheev]

What do you think about MLM industry? Share your opinions and experiences...

Personally i think that many MLM companies do a good job making their distributors read the "right" books, attend personal growth seminars and so on. As far as i can see, a person's success in MLM is aligned with the person's personal development and leadership skills.

I am actually surprised, that Steve has never mentioned MLM opportunities, though he writes a lot about entrepreneurship.

(no, i do not work in MLM. I had an experience in an MLM company a couple years ago, and it was quite positive.)

[thadroe]

Originally Posted by Pavel Alasheev

What do you think about MLM industry? Share your opinions and experiences...

Personally i think that many MLM companies do a good job making their distributors read the "right" books, attend personal growth seminars and so on. As far as i can see, a person's success in MLM is aligned with the person's personal development and leadership skills.

I am actually surprised, that Steve has never mentioned MLM opportunities, though he writes a lot about entrepreneurship.

(no, i do not work in MLM. I had an experience in an MLM company a couple years ago, and it was quite positive.)

Just my personal opinion....I don't like MLM at all. I've known a lot of people who have done them but I've never seen anyone who is very successful at it.

That issue aside, I personally would not get involved for the simple fact that you don't have a lot of control over what you are selling or marketing. If I'm going to build a long term business, I want more control over what I offer and how I offer it. MLM takes a LOT of work...if I'm going to put that much work into something, I want it to have more "ownership" of what I'm doing.

Some people swear by MLM and I'm sure you can make a good living if you put the effort into it, but it's just not for me for those reasons.

Also, I want to do things that will ultimately allow me to fulfill more of a purpose and pursue my passions in life.

Thad

[starkey]

I have had a few friends push MLM on me and it does not seem like an effective way to make money. Very time intensive but little reward. Analytically, it has to be that a few people make a lot of money and a lot of people will make a little money. Simply because there are a finite number of people in the world. You just can't keep adding levels to the bottom.

[Dave Kaminski]

Originally Posted by starkey

I have had a few friends push MLM on me and it does not seem like an effective way to make money. Very time intensive but little reward. Analytically, it has to be that a few people make a lot of money and a lot of people will make a little money. Simply because there are a finite number of people in the world. You just can't keep adding levels to the bottom.

There is a finite number of people, but you dont expect a 100% success rate. That's like saying McDonalds expects everyone in the world to eat at least one hamburger from them a year.

My mom is involved in one and has been for a couple of years. She's one level below the 'big money.' I think if you're a good salesman and by that I mean you are good at identifying win win situations with your product and service with people, and you're good with systems thinking, you can succeed with just a consistent effort. If you just try to push it on anyone or try to micromanage everything, i think you have a lot of learning to do before success in an MLM.

[Yynatago]

What is this MLM everyone talking about? <Yynatago Googles "MLM">. Ahh, Multi-level Marketing, otherwise known as network marketing.

My parents joined a MLM a few years ago and while we all thought the product was great and although they made money each time they held a party, the real business seems to be recruiting more people into the network so that they can earn passive income while the recruits held the parties.

Originally Posted by Dave Kaminski

I think if you're a good salesman and by that I mean you are good at identifying win win situations with your product and service with people, and you're good with systems thinking, you can succeed with just a consistent effort.

I think Dave is right on the money here as well. Just my two cents.

Regards,
From Shannan

[Scorpibear]

I believe it is not a good idea to make money via MLM, just because you are working for money and create a little value. It is much better to create value for people and receive money for that.

MLM could be a good way to make living, if you really like to do this and can create value via it (not just involve more and more people and learn them to do the same).

[kthdsn]

I find MLM inethical. You can only make money with it if you have enough people working below you making money. You are in effect getting others to do all the work for you then cashing in on it.

Obviously in our modern society one needs money to survive, but is it really that important that you have to hire an army of little slaves to do your work for you?

[Scorpibear]

Originally Posted by kthdsn

I find MLM inethical. You can only make money with it if you have enough people working below you making money. You are in effect getting others to do all the work for you then cashing in on it.

Obviously in our modern society one needs money to survive, but is it really that important that you have to hire an army of little slaves to do your work for you?

Agree, it will be much more ethical to hire an army of technology stuff to do all dirty work (like Google AdSense ). Automation rules!

But also I have to say that I have never involved in MLM (but a lot of people try to involve me ), so maybe I do not understand something.

[Pavel Alasheev]

Originally Posted by kthdsn

I find MLM inethical. You can only make money with it if you have enough people working below you making money. You are in effect getting others to do all the work for you then cashing in on it.

Obviously in our modern society one needs money to survive, but is it really that important that you have to hire an army of little slaves to do your work for you?

Quite on the contrary, i find MLM highly ethical. I don't know how familiar you are with MLM, but your talk about little slaves suggests that you are not really familiar no offense. Actually your words about an army of little slaves apply to ANY regular business, rather than to MLM.

Now look at my logical chain:

An MLM leader gets his paycheck depending on the volume of products he and his group has purchased, and so does each member of his group => His earnings are directly proportional to his people's earnings => He is interested in his people earning more => He will do all it takes to teach them to work properly.
In other words, every MLM company is interested in high earnings of its affiliates. The richer each affiliate, the richer the company. I think that's very ethical.

Now think McDonalds (or any other business). The business owner is inclined to pay as little as possible to his employees, because the less they get, the more he gets. Now is THAT ethical?

[kthdsn]

At least people who work in macdonalds actually get an income, most people who join MLM programmes don't earn much if anything at all. An example here is avon, a cosmetic company. I have been stopped in the street by avon people because they are so desperate for people to join below them so they can start actually earning. They all promise high earnings yet the reality as far as I can see is very different for the majority of people.

This is why I find it unethical, if you are making money from it then it is a direct result of the people below you struggling to earn a pathetic pittance.

Of course, this is only my opinion from my perspective. Just because I find it unethical doesn't mean that others have to agree. The point of a discussion is to learn about other perspectives, and that is why I am sharing mine.

[Dave Kaminski]

Originally Posted by kthdsn

At least people who work in macdonalds actually get an income, most people who join MLM programmes don't earn much if anything at all. An example here is avon, a cosmetic company. I have been stopped in the street by avon people because they are so desperate for people to join below them so they can start actually earning. They all promise high earnings yet the reality as far as I can see is very different for the majority of people.

This is why I find it unethical, if you are making money from it then it is a direct result of the people below you struggling to earn a pathetic pittance.

Of course, this is only my opinion from my perspective. Just because I find it unethical doesn't mean that others have to agree. The point of a discussion is to learn about other perspectives, and that is why I am sharing mine.

However, the people that work in MLM are paid in direct proportion to the effort they put in. This is a more fair business model than a salary could be considered, as I'm sure we've all worked with people who don't pull their fair share, and SOME OF US are passionate about what we do and are always striving to innovate and serve at the highest possible level. You find that much more prevalent when you're in control of the amount of money you make.

With a lot of MLMs, it's not the pay schedule that's the problem, it's the prospecting. So many network marketers will just tell everyone they know and hope to find some super stars. If they were good networkers, which is the whole idea, they would qualify their prospects much better, instead of deteriorating their network by verbally spamming people who aren't interested OVER AND OVER AND OVER AGAIN.

[Pavel Alasheev]

Originally Posted by Dave Kaminski

However, the people that work in MLM are paid in direct proportion to the effort they put in. This is a more fair business model than a salary could be considered, as I'm sure we've all worked with people who don't pull their fair share, and SOME OF US are passionate about what we do and are always striving to innovate and serve at the highest possible level. You find that much more prevalent when you're in control of the amount of money you make.

With a lot of MLMs, it's not the pay schedule that's the problem, it's the prospecting. So many network marketers will just tell everyone they know and hope to find some super stars. If they were good networkers, which is the whole idea, they would qualify their prospects much better, instead of deteriorating their network by verbally spamming people who aren't interested OVER AND OVER AND OVER AGAIN.

on the other hand, if a networker believes his company and his product are so great, then he feels he's obliged to tell everyone about it. Otherwise he would be depriving them of such a great opportunity. Actually in the MLM company that my girlfriend works for, there is a rule of 3 months, i.e. once you got a denial from someone, leave them alone, and try again 3 months later. I wouldn't call it spamming. If only all spammers followed that rule!!

[thadroe]

Actually in the MLM company that my girlfriend works for, there is a rule of 3 months, i.e. once you got a denial from someone, leave them alone, and try again 3 months later. I wouldn't call it spamming. If only all spammers followed that rule!!

That's a very good rule for people doing MLM. The problem most of the time is that people get so wrapped up in trying to make their MLM business work, that they get desperate and bug people to death.

I've seen a lot of friendships fall apart because one person gets involved in MLM and it ends up seeming like they joined a freakin cult...trying to recruit every friend and family member every time they talk. That's just bad marketing in general...no matter what kind of business you are in, you have to make sure you are putting your energy into targeting the right people.

Thad

[nikewong]

not everyone in MLM are evil, but not everyone of them are good. And it doesn't really promise everyone can earn big money, it all depends the right person doing the right job finding the right people... however, i found that most MLM that base on recruiting for the survival of the business are mostly scam..
i do like the concept of networking, but not all of it..

[sjpeer]

I actually have worked previously on the corporate side of the MLM (acutally a more correct term is Direct Selling) industry and currently work for a company that provides services to Direct Selling companies. Needless to say I've seen the industry from several different angles.

Direct Selling is completely legit but not for everyone. MLM products are often premium products (i.e. Mary Kay, NuSkin, Tastefully Simple) so there's no problem with legitimacy there. Most compensation plans DO rely on heavy recruitment to make the big bucks so there can be a tendency for distributors to start seeing their friends and family as simply a way to make more money. I've seen many strained relationships personally because of this.

Statistically, the direct selling industry is a revolving door with a high percentage of distributors quitting within a few months. They sell the dream of financial independence and that's perfectly fine. But it's true that most won't obtain it. Those who are dedicated and spend considerable time building their business will be most successful. And it DOES help to get in on a new MLM company early. With Mary Kay, I don't think you'll find one National-level Director that hasn't been doing the business for less than ten years. Sure they probably make 6 figures every month, but it took considerable time and dedication to get there.

Ultimately my advice concerning participating in an MLM is this: if you have a passion for working with people and the products you're selling, it might be a good opportunity. If you're in it just for the money, you're probably better off doing something you love. You'll be happier and can arguably make just as much money.

[Fusebox]

I joined N21/amway here in Sydney last year, just to see what it was like, lets just say i didnt like it. The people involved with their whole positiveness and stuff just dont seem genuine.
Anyways, I dont get involved, and I leave it be, waiting for my membership to expire, then out of the blue when my thing is about to expire I get a call from the guy who signed me to ask how I was doing and stuff. I swear the nerve just to get me signed up again!!

Anyways I dont like MLM.

[Pavel Alasheev]

Originally Posted by sjpeer

I actually have worked previously on the corporate side of the MLM (acutally a more correct term is Direct Selling) industry and currently work for a company that provides services to Direct Selling companies. Needless to say I've seen the industry from several different angles.

I think traditionally the terms Direct Selling and MLM are slightly different. Direct Selling companies rely more on sales to non-members, without giving too much weight to building a vast downline, whereas MLM companies get most of their profits from members' monthly payments, so the focus is to build a network of consumers, rather than salesmen. But i may be wrong here.

Originally Posted by sjpeer

And it DOES help to get in on a new MLM company early. With Mary Kay, I don't think you'll find one National-level Director that hasn't been doing the business for less than ten years. Sure they probably make 6 figures every month, but it took considerable time and dedication to get there.

I see a logical mistake here. Even though it takes ten years to become a national director, it doesn't mean it's impossible to do it starting now. Doesn't matter when you start, but if you work hard enough in ten years you'll be at this level. I've seen cases when newbies make top qualifications in a year.

By the way do you have any info about how much money top leaders of leading mlm companies (like Amway, Mary Kay etc.) make in the US? Just curious to compare with russian mlms.

[DmitryDavydov]

Originally Posted by Pavel Alasheev

What do you think about MLM industry? Share your opinions and experiences...

Personally i think that many MLM companies do a good job making their distributors read the "right" books, attend personal growth seminars and so on. As far as i can see, a person's success in MLM is aligned with the person's personal development and leadership skills.

I am actually surprised, that Steve has never mentioned MLM opportunities, though he writes a lot about entrepreneurship.

(no, i do not work in MLM. I had an experience in an MLM company a couple years ago, and it was quite positive.)

STAY AWAY from MLM. It's just about the dumbest and the most difficult way to generate money. Go for YOUR OWN business and DON'T BUY BS from MLM people when they say that when you join their company, you somehow get your own business. This is simply NOT TRUE.

MLM sucks. It's very good for your personal training, but you won't make any money in it. Exceedingly unlikely. Go to Amway and read their statistics. They make 2 billion in sales. Sound's good? Well, they have FOUR MILLION DISTRIBUTORS. Do the math, it comes out to about 500 dollars a year. 50 bucks a month is not a lucrative business you should pursue. Now, that's the AVERAGE. Which means that most people DON'T MAKE ANY MONEY.

As a fellow Russian, I just warned you. One day you'll be thankful. Taking risk is good, but you have to take good risks.

[escapee]

The main problem with MLM is that it hires the sales ppl indefinitely without paying a fixed salary until the whole supply and demand chain collapses ( i'm referring to those highly aggressive type of MLM that requires members to buy products periodically to reach certain level ). When it does , many would lose their shirt , their family and friends while the owner and a few members at the top of the chain make a ton. I believe MLM is one of the most extreme form of capitalism which we should all be very very careful about ( or avoid like a plague ) .

I read an article that says playing slot machine has a better chance in winning than MLM .

Seach MLM scam in google or yahoo , you would get plenty of information pertaining to the subject.

[DmitryDavydov]

Originally Posted by escapee

The main problem with MLM is that it hires the sales ppl indefinitely without paying a fixed salary until the whole supply and demand chain collapses ( i'm referring to those highly aggressive type of MLM that requires members to buy products periodically to reach certain level ). When it does , many would lose their shirt , their family and friends while the owner and a few members at the top of the chain make a ton. I believe MLM is one of the most extreme form of capitalism which we should all be very very careful about ( or avoid like a plague ) .

I read an article that says playing slot machine has a better chance in winning than MLM .

Seach MLM scam in google or yahoo , you would get plenty of information pertaining to the subject.

Yep, I knew a guy who used to make six figures in early nineties with Herbalife. Right now he makes 30K as a manager. That sucks. BUT - it happens with ALMOST EVERY MLM SUCCESS STORY. And these are pretty hard to find.

No matter how you look at it, other than sales training, MLM is a 'you lose no matter what' proposition. You lose even if you become successful. Your only real option is to start your own MLM company.

[Pavel Alasheev]

Originally Posted by DmitryDavydov

STAY AWAY from MLM. It's just about the dumbest and the most difficult way to generate money. Go for YOUR OWN business and DON'T BUY BS from MLM people when they say that when you join their company, you somehow get your own business. This is simply NOT TRUE.

MLM sucks. It's very good for your personal training, but you won't make any money in it. Exceedingly unlikely. Go to Amway and read their statistics. They make 2 billion in sales. Sound's good? Well, they have FOUR MILLION DISTRIBUTORS. Do the math, it comes out to about 500 dollars a year. 50 bucks a month is not a lucrative business you should pursue. Now, that's the AVERAGE. Which means that most people DON'T MAKE ANY MONEY.

As a fellow Russian, I just warned you. One day you'll be thankful. Taking risk is good, but you have to take good risks.

As a fellow Russian you could try to be a little more objective and respect my point of view. And don't talk to me as if i'm a newbie who knows not a thing about MLM. And SHOUTING is not a good idea either.

Have you personally BEEN a success in MLM? if not then how do you know what it's like. Yeah you probably have a bunch of stories to illustrate your point of view, but i also have a lot of stories to illustrate mine.

Your point is that most people fail. But if you look from another perspective, they may not have earned any money, but not everything in our life is measured with money. For a lot of people MLM is the first step to: 1. acquiring an entrepreneurial mindset. 2. personal development. How much does that cost?

Once again, most people in MLM quit without achieving any success. That's true. Now think of linear business. How many entrepreneurs succeed in their business? Think of e-commerce. I'm sure 90% of those who start an e-commerce business fail. (By the way, your blog kind of talks people into starting a web-business. 90% of them will fail. Does it mean your blog is a scam?).

Your logic: most people in MLM fail => therefore MLM sucks.
Then: most people starting their own business (or web business, or forex trading, or whatever) fail => therefore everything other than a 9-to-5 job sucks. Right?

My point is MLM is no different than any other kind of self-employed work. 90 percent will fail. 9% will get average results. 1% will achieve outstanding results. You get as much as you deserve.

PS: some comments on the amway figures you've quoted. Out of 4 million distributors, 2 million probably do not work at all. i.e. they bought a product, and either they are happy with that or they changed their mind, in a word they will not start really working. Of the remaining two million