It's All About Profit and Efficiency
 

You ever get that sick feeling in your stomach when you read about MLM? What is the source of that feeling? For me it's the vagueness of it. It feels like a scam. The little guy has developed a program and wants you to be part of it. There's a desperation there. We all feel it.

It's not that we are rooting against that person to make it. We want that person to do well. We just don't want them to do well from us. The reason we don't want them to do well from us is that if we allow these types of things to succeed we are invalidating the market. In a way we are invalidating reality.

If you notice in the title I didn't put the word value. The reason I didn't put that word is that it's already being overused as a catch phrase by people that aren't involved in things that provide it. That might sound trollish but it really isn't. Value is profit that is deserved.

In order to make a profit that is deserved you have to provide something at a cost that is better than what someone else can provide it at or has provided it at.

So you need to either be really efficient or exceptional or both. That's a pretty tall order. If you can find a way to be exceptional at being efficient you end up being Warren Buffet or Henry Ford. That's the least traveled path because it requires a tremendous amount of vision.

For example, Micheal Jackson was an enormously successful musician that also happened to be really careless with his money. He had incredible vision that made him extraordinary amounts of money. At the same time was extremely inefficient outside of that.

My overall point is that your financial success might not be in something that you want it to be in. You can become wealthy in a million different ways. You could get rich delivering newspapers if you're dedicated enough. Or collecting cans and bottles. Importing pens from china. The decision is to either be exceptional or find an exceptional value that you can pass on. That exceptional value doesn't always mean talent. It could just be a willingness to take a very small success and replicate it.(look I found a can on the road, how can I find 1,000,000?).

So just try to remember that when things go too far into the abstract. Jay-Z has a song called "The Streets is Watching". In economics the song would be called The Markets is Watching. If you get an edge and make huge profits don't be dumb with your money if for some reason you lose that edge. The market is always changing. Your money always demands a purpose and it never sleeps.

The "sick feeling" I get (and I find MLM fascinating for many reasons) is that I know 99% of it is just trading on hopes and fears.

No reality, just hopes and fears -- which may or may not match up with reality.

When I think of it as a game, then everything's cool. But the problem is that these games often have real-world costs for people....

Anyway, my belief is that we're less likely to do harm if we engage in those pursuits which bring us joy in themselves. Not acting out of hope or fear, but just joy.

I know that sounds naive and many arguments can be raised against it...but it's a hunch I've got and while I don't have the details worked out for myself yet, I feel like that's the way to go: instead of wondering about how I'm to make money, I'll determine what brings me most joy ("profit and efficiency" in your language, in a sense) and let the money-making take care of itself.

After all, it's possible to not make much money as a lawyer, doctor, accountant, or entrepreneur -- but if you enjoy most if not all of the actual daily activities involved with each profession, you'll at least have "covered your costs" and "come out ahead" with a small "profit" (joy!)....

MLMs are scams. Each and every one of them. Some of them are worse than others, but that doesn't make any one of them morally or ethically right. The fact is that the success rate for the very ''best'' of them is under 1%

MLMs say they sell products or services. They don't. They sell dreams. To suckers.

How do you think you'll apply this theory in your own life? What do you want to do?

Take Amway for example. They'll take a breath spray that costs 8 cents to make and then sell it through 10 levels of people. The final retail price of that might end up being 3 dollars.

So what they are doing is taking one of the things that most businesses try to eliminate and making it the center of their business(middlemen). I might not be able to get breath spray as a single item for 8 cents but I probably could get it for 2 dollars in a local store.

Now what happens if someone happens to decide to make a very similar breath spray but sell it for a dollar less? Well if he does a good job in the other areas of what he would need to do he would make a lot of money. By keeping his costs down and eliminating the middle men he gets the result of being able to make more money because his demand will be higher.

So in a way most types of physical product based MLM's shouldn't exist at all because that product should be in a store. I could though see a service based MLM do well. Like a dog walking MLM system that tried to build up a brand for the overall service might work. Or a delivery service MLM.

I don't see why a direct-to-consumer approach wouldn't work better for each of those services mentioned. For the same reasons you've listed. Plus the less than 1% success rate. Plus selling a dream. Plus brainwashing everyone into this cult-like thinking that leads one to view every friend and family member as a potential cash cow.

Well, I don't have all the details worked out yet, but I plan on writing and taking over a family business, among a few other side-income kind of things. Those will be stepping stones (though, in a sense, also ends in themselves) to my real passion: working with animals!!

Is there a difference between MLM and affiliate marketing? I'm taking them to be synonymous, though "MLM" certainly has the worse connotation.

I mean, you don't think something like Google Adsense or Amazon Associates is a scam, do you? Sure, only a very few people make any real money at it, but those two seem fine compared to something like, I dunno, Herbalife and the like....

Isn't affiliate marketing an online thing? I don't know, you're probably not asking the right person. But what I know from Adsense and the like is that they don't sell dreams and they don't pretend not to be selling something like many MLMs do. From what I've heard, the return on the investment with those revenue streams is low, but that doesn't make them a scam, not by a long shot.

By the way, I love animals! I don't buy products that rely on killing animals and I'm vegetarian. What do you want to do with animals specifically?

Now I'm wondering if you'll have time to read and reply. :(

Okay, yes, affiliate marketing isn't exactly MLM because no "levels" have to be involved (in fact, there often isn't any, at least online, at least with two of the biggest programs around, Google Adsense and Amazon Associates) -- income isn't generated from new recruits instead of actual product!

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I'm here every week like three days, at least. I have to say, though, that I haven't gone the vegetarian/vegan route yet, though I do plan on it! My boyfriend and I are eating a lot more vegetables now, trying to ease ourselves into, what do you call it, pescadorianism or something, just seafood, first, then vegetarianism, and hopefully full veganism after that. We'd both tried quitting cold turkey, so to speak, but kept stumbling for one reason or another and so have decided that the slow approach might work out best!

As to my ultimate goals, I'm hoping to just take care of animals, comfort them, help heal them! I'd thought to be a vet once but then got bored by all the science of a pre-med curriculum and realized that there are other ways to work with animals! Besides, I was never looking forward to actually cutting them! :eek: