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| | Post New Topic | | Why are there so many MLM schemes on networking sites these days? | Views: 281 | | Mar 06, 2009 12:16 pm | | Why are there so many MLM schemes on networking sites these days? | # | 
Martin Zwilling | | Is it just me, or has the recession generated a new wave of these “Multi-Level Marketing (MLM)” schemes? I've never found one of these I liked, as I wrote in http://blog.startupprofessionals.com/2009/03/ive-never-found-mlm-i-liked.html . What is your view?
Private Reply to Martin Zwilling | | Mar 06, 2009 12:57 pm | | re: Why are there so many MLM schemes on networking sites these days? | # | 
Heidi Caswell | | Great discussion you have on your blog.
Knowledge is a good thing. In some ways mlm is like a mini-franchise, a way to earn a good living if you do the work.
Many have done the industry a disservice by doing much like your post Martin. Sign here, fork over your money and you'll get rich. Pressure your friends and family into buying overpriced stuff. Trick your friends into attending an opportunity meeting. Spam the various forums and social networking sites. None of these are good, not how it works. It is like saying all people of a certain race or profession are crooks because you met one who was.
I have met many of the most caring, helpful people in the business, helping others find a plan B. It is hard to start a business from scratch while working full-time and on a tight budget.
These home businesses provide a plan, system, but like a weight loss program, it doesn't work unless you do it.
I believe it is important to have a product or service that is the highest quality at a fair price. I could not say to a friend buy from me so I'll get rich --pay twice as much.
Important that the company has integrity, makes money from sale of product/service, not using their reps as a source of income.
There are some very solid businesses out there, moving much product/service better than traditional businesses.
Many people have the misconception that all MLM businesses are schemes, one person I met went so far as to say they are all inspired by the devil.
Not so, you can find a solid company which offers a better quality service or product for less than you'd purchase elsewhere. Meanwhile money is moving into the pockets of individuals instead of large marketing companies.
Keeping in mind many of these have no business background, the best companies work at training their reps the skills they need to be be successful. Most plans pay based on your own efforts and those you coach and teach. Possible for anyone just starting out to pass up and make for than those in before them if they do the work.
Heidi Caswell
http://HeyClickHere.net
Private Reply to Heidi Caswell | | Mar 08, 2009 6:40 pm | | re: re: Why are there so many MLM schemes on networking sites these days? | # | 
Lamar Morgan 707-709-8605 | | Heidi,
Let's get very basis here. Why are there MLM's in the first place? Is it really about providing a means for unskilled laborers to "be in business for themselves but not by themselves?" Certainly not. At its very core, an MLM is a marketing strategy to sell goods and services with a FREE sales force of independent contractors. Being independent contractors as opposed to employees, means the parent company saves money in providing its products and services. The parent company will even get the sales force to pay for its own sales training and marketing materials. The MLM world operates in sharp contrast to the corporate world.
The parent companies that operate MLM's are not stupid - just extremely manipulative. It's not a coincidence that the business opportunity meetings of different companies follow similar patterns - a cold room with a pep rally atmosphere and loud obnoxious music. It is all a psychological plow designed to break down a person's will to negate the value of the business opportunity.
Some MLM's even offer advanced commissions for products sold by their independent contractors. An advanced commission is not even REAL MONEY (positive cash-flow). It's a debit that only accrues to positive cash-flow over time - provided it is not withdrawn due to a product's return or cancellation.
What is it about a particular MLM that appeals to you? Is it the need for financial security? Is it the need for MORE family time? How about the need to "be your own boss?" Let's be honest, here. Who does not have a need for any of these things - financial security, more family time and a desire to be the captain of one's own ship? We all want these things to be manifest in our lives. MLM's entice with being the solution to needs they know the public has. But, rarely do they deliver the satisfaction they promise. That is why there is a high turnover in the MLM world. The independent contractors get out because they can no longer afford to play the game.
Lamar Morgan
CDMM - Synergistic Business Marketing
707-709-8605
Attract more customers!
Private Reply to Lamar Morgan 707-709-8605 | | Mar 09, 2009 10:14 am | | re: re: re: Why are there so many MLM schemes on networking sites these days? | # |
Heidi Caswell | | Lamar, I typed up a response, but the Ryze gremlins ate it before it was posted.
As for paying for own training and advertising one way or another, I believe that is something all businesses do. Difference between employee and owner.
There is a prejudice against MLM's because many think they are all they same, trick or otherwise manipulate your friends to come to a meeting to get brain washed, beg your friends and family to be customers. Although some have followed those practices, that is not an effective way to build a business. So if that is your defination of a mlm, I can see your point.
Kind of like saying all lawyers are evil or all doctors are quacks.
There are many good companies out there which are mlm's and do not follow the sterotype. By throwing them all out, you are missing much. It does work, but you have to do more than sign up and talk to your 3 best friends.
As far as quitting because they can't afford the cost of staying in the game, costs are much lower than a traditional business. Less risk. Thus many never start. Kind of like opening up a store front and never unlocking the doors or letting others know it is there. My experience is that most people quit because they aren't working, or they are lacking necessary skills and unwilling to learn them, or fear of rejection.
Heidi Caswell
http://GetYourCardsHere.com
Private Reply to Heidi Caswell | | Mar 09, 2009 1:15 pm | | re: re: re: re: Why are there so many MLM schemes on networking sites these days? | # |
Lamar Morgan 707-709-8605 | | Heidi,
I am not going to say that all lawyers are evil. I am not going to say that all MLM's are evil. But, unlike lawyers, there is no real "code of ethics" for MLM's.
I was trained by an MLM on conducting "business opportunity" meetings. The pep rally atmosphere, loud music, cold room, was no accident. It was there by design. Why? I was actually told it was to psychologically lower a person's resistance to the business opportunity. In other words, the MLM does not "play fair" with the public.
Often folks are not even told the truth concerning how the MLM system works. For example, no one bothered to explain to me that an advanced commission was a debit rather than positive cash-flow. I had to make an official written inquiry to learn the truth. Why? Because when you really understand how the system works, it is no longer that attractive.
If MLM's delivered as they promised, you would not have so many lawsuits against them...by their own independent contractors! Want proof? Do a Google search on "MLM lawsuits."
When something sounds too good to be true, it usually is.
Lamar Morgan
CDMM - Synergistic Business Marketing
707-709-8605
Attract more customers!
Private Reply to Lamar Morgan 707-709-8605 | | Mar 10, 2009 9:33 am | | re: re: re: re: re: Why are there so many MLM schemes on networking sites these days? | # |
Heidi Caswell | | Lamar, you are letting your experience with one company color your opinion of the industry. Either do more research or we can agree to disagree.
There are ethical companies out there, when you do the Google search, use the specific company name. The picture you portray is not accurate across the board.
(Now you will run into people using negative keywords and various companies names to promote another company or signing up under them in that company--but I don't buy from negative marketers.)
Details should be openly included in the comp plan. There are rules and regulations companies must follow.
When within a few years a startup company (mlm in this case) can become the 3rd largest retailer in the USA(volume of sales) in a specific industry while the larger companies are laying people off and their sales dropping, should tell you it is not a cut and dried matter.
Heidi Caswell
http://connectsimply.com
Private Reply to Heidi Caswell | | Mar 12, 2009 8:42 pm | | re: re: re: re: re: re: Why are there so many MLM schemes on networking sites these days? | # |
Lamar Morgan 707-709-8605 | | Heidi,
Your comparison between corporate employees being laid off and independent sales associates of MLM's keeping their jobs makes no sense. MLM's do not lay off independent contractors. They simply quit because they can no longer afford to stay in the business. Make no mistake, there are lots of problems with the MLM strategy. Here is just one of them - market saturation:
Matching the manufactured supply to the market demand is key to a company's success. Interestingly, the issue of supply and demand is what brought the USSR to its knees. By design, the Soviet government tried to macro-manage supply, where bureaucrats would decide how many potatoes were needed, how much toilet paper, etc. Assuming these bureaucrats did the best they could, unfortunately their efforts to deliberately manipulate the control "knob" of supply and demand was not good enough. Notwithstanding their good intentions, they were usually wrong, which created huge shortages and surpluses, and led to a massive economic collapse, as resources went into producing products that weren't needed, while other products were in limited supply.
With MLMs, the situation is much worse. Nobody is home. Even the Soviets had SOMEONE thinking about how much was enough! If the bureaucrat in Soviet Russia was having a hard time trying to play Adam Smith's "invisible hand" in setting the supply level in the Soviet Union, then an MLM "executive" is in a truly unfortunate position. Not only is there no one assigned to make the decision of how much is enough, the MLM is set up BY DESIGN to blindly go past the saturation point and keep on going. It will grow till it collapses under its own weight, without even a bureaucrat noticing.
An MLM is like a train with no brakes and no engineer headed full-throttle toward a terminal. Question: Who would voluntarily get on a train with no brakes and no engineer? Answer: Only a person who is clueless as to how a train is supposed to work.
Lamar Morgan
CDMM - Synergistic Business Marketing
707-709-8605
Attract more customers!
Private Reply to Lamar Morgan 707-709-8605 | | Mar 12, 2009 11:58 pm | | re: re: re: re: re: re: re: Why are there so many MLM schemes on networking sites these days? | # |
Heidi Caswell | | Disagree.
The corporations are laying off because their volume of sales has gone down. MLM company I'm talking about, their volume of sales about doubles each year. It is a corporation, hires more employees. Opens new places to make product.
Market saturation not a problem, that is more of a myth. Yes, if everyone joined and sold same product then that would happen, but not all will join the same company and others won't join at all. If everyone decided to be engineers there would be market saturation, or if everyone wanted to be teachers. Everyone is unique own interests, talents. Yes, several companies have gone under, but it was because of other issues, not saturation.
Maybe we have different definitions of mlm.
http://www.ryze.com/posttopic.php?topicid=1019975&confid=94
"to blindly go past the saturation point and keep on going. It will grow till it collapses under its own weight, without even a bureaucrat noticing."
Thanks for the analogy, the first image to flash through my head when I saw this was that of the federal government and its budget.
Supply and demand not an issue when product printed on demand as purchased. Backup printers available for rent when needed.
Heidi Caswell
http://connectsimply.com
Private Reply to Heidi Caswell | | Mar 19, 2009 12:48 am | | re: re: re: re: re: re: re: re: Why are there so many MLM schemes on networking sites these days? | # |
Lamar Morgan 707-709-8605 | | Heidi,
Here are some statistics provided by the MLM companies themselves. What these statistics prove is that you have better odds gambling in Las Vegas and winning than you do profiting from your participation in an MLM. Here is the link - Shocking MLM Statistics.
While knowing the truth can set you free, believing a lie can keep you in bondage. You have the power to choose. Choose wisely.
Lamar Morgan
Private Reply to Lamar Morgan 707-709-8605 | | Mar 20, 2009 11:13 pm | | re: re: re: re: re: re: re: re: re: Why are there so many MLM schemes on networking sites these days | # |
Heidi Caswell | | Lamar,
Don't believe everything you read on a website.
I appreciate you trying to help. We will disagree on this one. I make more money from my customers than I spend myself. Not a lie, but truth. And my customers are getting a great product/service for less than they could buy anything similar in a traditional business.
I have, met, talked to, friends with, people who make a very good income with such a business. Those numbers do not match my experience. Did everyone I know make a very good income? No. Some broke even, some made enough to make their car payment, some spent money getting started, but never got started. But even those did not lose their life's savings.
I realize your experience is different than mine.
Heidi Caswell
http://HeyClickHere.com
Private Reply to Heidi Caswell | | Mar 27, 2009 12:00 am | | re: re: re: re: re: re: re: re: re: re: Why are there so many MLM schemes on networking sites these | # |
Lamar Morgan 707-709-8605 | | Heidi,
Those statistics I gave you from that website supposedly came from the MLM companies themselves. Now, if that website is lying, all those MLM companies should sue the living daylights out of that website and that website should disappear from the Internet. But, that has not happened has it? Why do you suppose that is? Those stats cannot be both true and false can they?
Let's be honest here. The MLM way of doing business has been good to you. However, according to reports from the MLM industry itself, that is not the case for the overwhelming majority of its sales people. The reason the majority of independent associates fail is because the MLM system is not designed to benefit them. First and foremost, the MLM system is designed to benefit the parent company. Otherwise, MLM's would be providing healthcare, 401-K's and other benefits to their workers. Instead, MLM's sell dreams of financial independence, more family time, and residual income for life. MLM's are by-and-large dream merchants and they tend to be very good at what they sell.
Lamar Morgan
CDMM - Synergistic Business Marketing
707-709-8605
Attract more customers!
Private Reply to Lamar Morgan 707-709-8605 | | Mar 27, 2009 1:30 am | | re: re: re: re: re: re: re: re: re: re: re: Why are there so many MLM schemes on networking sites th | # |
Heidi Caswell | | I really don't know the numbers for all those companys. In my experience, those who work the business get much better results than those numbers.
So I went looking for numbers:
From Amway
http://www.quixtar.com/about/content.aspx?pid=9896&ctg=16305
The average monthly gross income for IBOs who are "active" in the business was $115 based on the most recent independent survey. Some earn less while others earn much more. In 2006, IBOs earned more than $370 million in bonuses and incentives on $1.12 billion in sales.
Approximately 66% of all IBOs of record were found to be "active." An "active" IBO is one who attempted to make a retail sale, or presented the Amway Global IBO Compensation Plan, or received bonus money, or attended a company or IBO meeting during the year.
Melaleuca http://www.melaleuca.com/ps/pdf_bc/07_IncStats.pdf
This seems consistant with what I've seen. You can't expect someone who has 1 customer to make a full-time income, nor someone who opens a business but doesn't show up.
I'm not with either of these companies, and I'm not going to research each and every one, I just picked two that were listed and copied their info. I have no idea why that site is saying what it does. I can't find those numbers on any of those company's websites. I'm seeing different numbers.
Not employees, so why provide healthcare, etc. Several do offer a group plan if their independant reps care to participate. Usually when starting, you or/and your spouse already have a job which provides health benefits. It is one of the costs built into your salary. Many don't have the need of a seperate health insurance plan. As an independant business owner, you decide yourself where you want your money to go. I'd guess that most of these companies do provide employee benefits for their employees.
Nothing wrong with having a dream. I remember back in high school, talking to one friend about plans after school. She was like, if she was lucky, she could get on with the Levi factory, but she might end up flipping hamburgers. I was like, come on, you can be anything you want. Well maybe you can, but I'll never make it, best I can do is get a job sewing jeans. I tried to tell her she could do more, be more, if she could be anything she wanted, what would it be, and she was like it'd never happen so why dream. I'd hate to live life that way.
But dreams take work, planing, accountability. They come in many forms, not specific to one type of business or vocation. Some people give up on their dreams when they have one set back. Others go on, learn from mistakes, grow as a person, enjoy life.
Lamar, I'm not going to convince you, your mind is made up. Cool thing is that there are many things you can do, and you still dream. I've seen it. Don't waste your time trying to convince someone that something that is working for them won't work, esp. when it already is working for them.
When I first became involved in a network marketing company, I was just "helping". My husband joined, and we had friends who made a full-time income with it. I realized that I was the one building the business. I slammed on the breaks. I was not one of those kind of people. Since then I've learned much. One is to make a good solid income in any business, you need to be doing something, not just dreaming.
Heidi Caswell
http://connectsimply.com
Private Reply to Heidi Caswell | | Mar 27, 2009 1:30 am | | : re: Why are there so many MLM schemes on networking sites these | # | 
Chuck & Shirley Bartok | | Basic definition may clear the air Here.
Difference in success is predicated on the Mentality of the Participant.
Follow the Video
http://www.youtube.com/watch?v=HctbINGEk4c
If people continue to harbor the Employee mentality,
as Lamar alludes to discussing 401K programs, health plans etc.,
they will NEVER succeed!
Those are benefits available to Everyone.
I never had a Job, but I have all those benefits
and Better. I pay a Lower Tax rate than most
employed people of equal Gross Income
The difference between a Business person
and an Employee is the Business person has
the advantage of total control of their
Benefit package. They have the benefit of working
as long and as hard and as many years as the Wish.
If I CHOOSE to affiliate with an MLM oriented marketing Company,
their ONLY responsibility to ME
is to provide their Product as advertised
and Pay a stated.
http://www.youtube.com/watch?v=_aeGmE3WLs4
If those thing are not in the MIX adios!
And this ludicrous statement
"First and foremost, the MLM system is designed
to benefit the parent company"
ALL Companies engaged in Commerce better subscribe
to that direction if they expect to be in Business.
No one Sells Dreams, gullible Entitlement Sucklings
think they can Obtain Fortunes by dreaming about it.
If they believe some of the presentations offered
by MLM and don't realize they are the
same presentation as any Company,
regardless the model, THEY possess no Real
Understanding of Business.
Our community members, who prepare themselves
for BUSINESS, using the time tested
(over thousands of years) methods Don't fail,
regardless the Model, MLM, Direct Sales,
Brick and Mortar, and yes even my "Professional" clients.
Chuck & Shirley Bartok
My Business Card http://chuckbartok.com
Follow me on Twitter http://twitter.com/cjbart
Use Your Own Personal Trainer 24/7 http://focus40now.com
Private Reply to Chuck & Shirley Bartok | | Mar 27, 2009 5:45 am | | re: : re: Why are there so many MLM schemes on networking sites these | # | 
John Stephen Veitch | | I've just listened to Chuck's two videos.
Chuck, you speak with passion and knowledge, and I don't disagree with what you say, except with the idea the MLM is the way to do it.
It comes down to this. Is the product a quality product appropriately priced?
Can you make enough to sustain yourself, a very basic income just by selling the product.
It seems to me that all the MLM schemes I've seen fall over on both those criteria.
If creating a down line is an optional extra for those who choose to do be involved, that would be great, but MLM schemes are designed so that the down line is the essential and critical thing. It's the down line that you depend on for your own future income.
This generates pressure for the sellers to find more and more people at an exponential rate and that cannot be sustained. So, like Lamar I say the system itself if flawed.
One week ago I was introduced iLearningGlobal, a business education MLM program. They are promoting it as Multi Level Mastermind. The highly respected Brian Tracey and one of the key figures, together with the business to business networking guru, Ivan Misner.
Faculty members including Dr. Tony Alessandra, Bob Proctor, Debbie Allen, Mark Victor Hansen, Jack Canfield, Rhonda Sher, T. Harv Eker, and Bill Bartmann.
This is a very well put together product, it's undersold, it's professional looking and I'm sure the price is right. The people offering the product are a very experienced team, and they have 30 years of legacy products they can offer, as well as promised new material to be produced each month. At $80 a month, it's a nice package, provided those getting the package have access to a little bit of real support. So I go excited and then I went COLD.
If you are a distributor you pay an extra fee of $20.00 once. Distributors must also be subscribers. $80 a month.
Then you get 3% of the gross from all your first line customers, and you can have as many as you wish.
Question: Can you make any sort of basic living on those $80.00 sales. That's 3% $2.40 for each month they continue in the scheme.
But if your down line makes the sales you get 7%. So of course if you are enthusiastic you make sales and give them to your down line. That makes them money, and doubles your income too. You can see immediately that the down line is essential in this scheme. Going 7 levels deep.
It is my belief that this is an excellent product but the selling method is a scam. I have advised iLearningGlobal of my view. I'm surprised that Brian Tracey and Ivan Misner in particular are involved.
What's wrong with it?
Every new distributor is put in a "no win" situation unless they actively try to develop a very strong down line. This is an unethical way to do business. I won't have anything to do with it.
There will be a flush of great success and then a mighty crash. On the back of all the failure involved the company will make a lot of money. All those people who are buying the product are "sellers" who are paid usually 3%, 10% or 17% for their efforts. In theory those who stick with the system will earn 60% but there won't be many of those.
Easy to find: iLearningGlobal
John Stephen Veitch
Open Future Limited - http://www.openfuture.biz/
Innovation Network - http://veech-network.ryze.com/
Building an Open Future - http://openfuture-network.ryze.com/
Private Reply to John Stephen Veitch | | Mar 29, 2009 8:12 pm | | re: re: : re: Why are there so many MLM schemes on networking sites these | # |
Lamar Morgan 707-709-8605 | | John,
I am both shocked and saddened that Brian Tracy and Ivan Misner would lend there good names to an MLM. This will no doubt bring their own credibility into question once the scheme comes crashing down, causing a lot of financial hardship.
Let's be gut-level honest here. What's the appeal of an MLM? Is it really the product or service? Are you really selling the product or service via the multi-level approach because that is the only way the product or service can be acquired? Not hardly. No, you're there FOR THE MONEY. And, if you can make MORE MONEY by simply recruiting other people to do what you do, so much the better. The next thing you know, your downline organization is practically running itself. You have more family time. You can afford to take longer vacations. You have residual income for life. What more could anyone want?
Unfortunately, the MLM ideal is not the reality most people in the MLM world experience. Rather than having more family time, you discover you have less. Why? Because you have conference calls to attend. You have weekly business opportunity meetings to attend with recruited guests. You have special conventions to attend. MLM's tend to have a myriad number of ways to separate you from your money - including the infamous charge-back for closed accounts.
MLM's are fond of saying, "You are in business for yourself but not by yourself." Well, so long as you have money and a relationship with an MLM, that MLM is not likely to leave you alone.
Lamar Morgan
CDMM - Synergistic Business Marketing
707-709-8605
Attract more customers!
Private Reply to Lamar Morgan 707-709-8605 | | Mar 29, 2009 8:52 pm | | re: re: : re: Why are there so many MLM schemes on networking sites thesee | # |
Chuck & Shirley Bartok | | Stephen,
I appreciate your compliment..
But you may have misunderstood.
My only affinity to the MLM Model is
that certain products I will always use
cost me ZERO and actually provide a little extra
Income for Investment.
I would never rely on someone else's
package to guarantee my sustenance
Re: iLearningGobal, I also was asked to Critique.
Felt the Same way..
Don't need it, but I laud the Principles for
creating another huge Income source for
themselves, especially in these times
of Misled Masses seeking alternatives....
Before establishing Basic Business Criteria.
Our simple Community has "products" far superior and
the true Sense of Community, where Real people
Communicate with Real people
who Know what the Facts are....
But even there Few take the Advantage to Optimization
Nothing has changed in the past several hundred years regarding the necessities of
OWNING and ENJOYING
a successful Business
I do appreciate the fact is sure costs a lot
less to get started and Maintain Today,
than ever before in my 50 year career.
Chuck & Shirley Bartok
My Business Card http://chuckbartok.com
Follow me on Twitter http://twitter.com/cjbart
Use Your Own Personal Trainer 24/7 http://focus40now.com
Private Reply to Chuck & Shirley Bartok | | Apr 03, 2009 4:34 am | | re: re: re: : re: Why are there so many MLM schemes on networking sites thesee | # | 
Walter Paul Bebirian | | dear friends and fellow members of the business network -
I invite you who are participating in this specific discussion to use your specific business with it's specific product or products and business model to illustrate how what you do allows you to make business of your idea and concept -
Although I am not sure if I worded this correctly - Chuck I am thinking that from watching your video and thinking about what you have said that you have some great knowledge to impart - a great way of talking to me through your video and that I and this entire group whether the people I am referring to are members already or eventually will be in the future - will greatly benefit from some deeper delving into what you are getting at -
Now from my own perspective - I am in a different business *(I am a phtographer who is now presenting my art work for all people to view and enjoy and with the added intention that eventually a market for my specific work to be purchased will be created - and then for some reason or other I was motivated just the other day to create this new web site:
http://thewallstreetwonder.com
and like I do when I am creating anything - a portrait - a photograph of a product or an abstract image - I thought of a sstep in communicating an idea
and created this video - I am not as clear as to how to verbalize concepts as so many others seem to be because when I discuss concepts many people seem to react to my concepts as being too philosophical - here is the video which it seems to be is extremely concrete in its message:
http://www.youtube.com/watch?v=6BsebGPgcyU
I have no idea if I will ever even have any product to sell -
but does this have any relation to how a person learns to do business?
http://www.575488trillion.com
http://bebirianart.com
http://bebirianart.blogspot.com/
http://www.greenschild.com
Private Reply to Walter Paul Bebirian | | Jun 09, 2009 8:49 am | | Why are there so many MLM schemes on networking sites thesee | # | 
Ricky Mendoza | | Hi,
Very interesting topic. I remeber i had this friend of mine, he would always go and see the types of products these mlm guys were selling.
For example if they were selling some kind of soap that cost $20, he would buy that one soap and mass manufacture it with a different name but everything else the same and sell it close to $1.
I guess his way of doing business is i am can do it cheaper and better. Hee became rich fast and retired before 50. Smart chap.
http://www.kingdom-mines.tk
Ricky
Private Reply to Ricky Mendoza |  | |
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