On Friday 27 April 2007 22:31, jloh wrote:
> Hi Hal,
>
> > On the one hand, I'm glad you're not going to answer what company
>
> you're
>
> > with, on the other hand, it could be topical so we understand
> > whether you're in an MLM in which tools or other non-product sales
> > are important.
>
> You'll have to clarify what it means by important. If you mean
> whether you need tools & training to build an MLM business, then yes.
> It's a new industry that you're going into, so training & learning
> happens as you go along. If you mean whether it's forced onto
> members, then no it's not. It's always optional. If an MLM makes
> money off you from selling tools & training, get away from it. It's
> not ethical. Unless it's an MLM selling tools & trainings that is. My
> members are informed of their choices, and the consequences, and
> other means of getting whatever tools and training they might need to
> build their business - for free sometimes. Alot of the stuff online
> is free.
You have some points that are close to my thoughts. If I hire someone
and they need training, I would be paying for it. In most MLMs, it's
the reverse: you join, so you pay for the training and most of the time
the training materials are sold at a very high profit. A prime symptom
of problem MLMs is that training materials are "optional," but in truth
are required (though never officially) and that there is a high profit
from those tools.
...
> > 2) Are you willing to submit to Paine Webber's challenge and prove
> > that you are making a good living through your MLM? (For this, I
> > would accept privacy concerns and be okay with the papers submitted
> > ONLY to Paine Webber and him verifying and reporting the results.)
>
> Yeah sure. If you can give me the link.
It's part of the group, in the documents (or is it the links?) section.
When you're visiting this group in the Yahoo Groups site, then click on
the "Documents" link.
> > 3) What kind of tools and meetings are considered normal for
> > someone in your organization?
>
> All our training tools are provided as part of the business, online
> audios and videos with no extra charge. Additional international big
> training meetings are held 2-3 times a year, optional but
> recommended. Local training meetings are held twice a month, and it's
> free entry because it's held in the local office. Other meetings are
> the business presentations - we only charge members to cover the room
> cost - of which is announced to the whole team beforehand anyway.
> Guests don't pay to enter. As for business building tools, it's up to
> us to do what we want/ need to. We (distributor teams) provide videos
> and audios at slightly above cost as an option, websites as an option
> or they can use the free websites without any cost.
Are you saying the cost of the room is announced? In other words, they
can't say the room is expensive and charge everyone $5, then pocket the
cash? And what is "slightly above cost"? Are those who use only the
free training materials treated any differently than those that don't?
> It's important that members coming in to the business knows that this
> is their OWN business. The tools & trainings are there, but they are
> welcome to produce, find, use, or purchase any of their own, as long
> as they don't misrepresent the company & its products. It's an
> option, not a must, although it is recommended to get yourself
> equipped with the knowledge on how this business is built. (which
> btw, is not about selling, unless you want to be totally frustrated &
> angry.)
This is very much a doubletalk pattern: They're not required, but
recommend. It's like the Quackstar line, "Tools are optional, but so
is success." They claim nobody has to buy the tools, but their actions
and words are not in sync. When you say they are not required, but
that it is recommended, how heavily are the tools recommended? If
someone elects not to use them, are they treated differently than those
who do use them? And, while you've talked about pricing and many free
materials, what is the pricing on these "optional" but "recommended"
materials? How much does one CD cost, for example?
> > 4) Does your company focus on selling product to those outside your
> > organization? What percentage of your sales are to those outside
> > your organization?
>
> I won't be able to honestly say that the company focusses on selling
> the products to those outside the organization. Because MLM is not
> conventional business, which is a closed profit system (meaning only
> the owners, shareholders & employees have a vested interest in the
> profits) & products are sold to ppl outside the organization.
A lot of what you've said has sounded acceptable or almost solid. I
didn't even comment on your response to my first question because I had
nothing to say, neither a positive or negative reaction. Your last
response started out in a way that amazed me, with the comments that
the materials were not required, but then a lot of the rest of the
answer sounded like standard doublethink/
This comment, though, is a major "red flag" to me. When I was a kid, my
Father helped me make metal brackets to hold hanging baskets and I went
out to sell them. I had to make enough to pay for materials and to
make a profit above that. I used to sell Christmas cards door to door
before that (my best month was usually August). I've made several
attempts to start a business and worked as a property manager where I
had to make sure my part of the business performed well. Now I'm
running my own business which took a few years before it started paying
the bills, but now does more than that. In short, I've been working
with general business facts and experience since I was a kid.
And this comment seriously concerns me. The bottom line, as you point
out above, is that you can't run a business on dignity and no cash
flow. The bottom line for a business is to sell a product or service,
get paid for it, and make sure that income is more than what the
business pays in expenses. Lines like "closed profit system" are,
simply, a smokescreen to hide the fact that money is not going where it
should. Normally I'd go through a long set of statements to back that
up, but I've done it enough in the past. The bottom line is fancy
wording like that is like a corsage on a prom date. It looks pretty,
but doesn't make a difference in whether she can dance or is a good
date.
Not all companies have shareholders and there are many companies where
the employees are the shareholders. Employee owned companies are not a
rare situation. You're writing off all non-MLM companies with one
quick, prejudiced statement which sounds a lot like the programming
I've seen in IBDrones. The major point is it is not true and it is NOT
valid.
You're either selling product or not. Some people may join for
discounts, but that becomes a smokescreen as well. Do you have people
that are actually buying the product to use it? That's the bottom
line.
And as to "closed profit," any system is closed profit if it's making
money. Even an MLM is closed profit. Certain people make money,
others don't.
> MLM companies only sell to their distributors (who have a vested
> interest in the profit system of the company, so it's different from
> conventional business), the distributors are the ones who sell to
> those outside.
Again, this is obfuscation and equivocation. Do you make your profit by
selling to people that use the products? Or is it sold to others
farther downline who are expected to sell it to others who will use it?
> We have a preferred customer program, where
> non-business owners can purchase the products at distributor price,
> but do not have the option of making an income from the business. In
> this system, they are also placed inside the organization, but they
> are users contributing volume on their own use. So none are outside
> the organization, although to answer on your question about the
> percentage, it's approximately 50% at this point in mine.
I'm not going to say much about rules and laws about retail and how a
company must sell a certain percentage of their product outside the
company or it is officially considered an MLM, since others will fill
that info in, but basically, your company is treading a fine line and
it sounds like they're technically operating illegally.
You say 50% of your profit is to outside sales, but there is an issue
about what outside means, so I'll accept it, as I think you intend,
that about 50% of your profit is made from selling to people that use
as opposed to resell the product.
What about the other 50%?
> > 5) What percentage of your income is from business tools, admission
> > tickets, or other things that your members buy but cannot resell to
> > those outside the organization?
>
> O%. My income from the business is from product movement only.
That sounds good. Does anyone make money on tools? Or are there
numbers that indicate someone is although they are not making claims as
such?
> > > My personal vision is to promote a balanced awareness about the
> > > industry (which, I confess, I love very much), and to stand for
> > > it being conducted in a manner that is professional, ethical &
> > > with integrity through firstly, my own personal actions. And my
> > > goal here is to learn from all of you - and serve if I may, to
> > > contribute constructively where I can.
> >
> > You want a balanced awareness. How does that include the MLMs that
>
> have
>
> > been proven, in many ways, to make huge profits at the expense of
> > the downline population? Do you hope that MLMs will reach a point
> > of balance, or do you just want people to think that MLMs are a
> > good way to earn money?
>
> LOL. My vision has nothing to do with the other MLMs. It's not the
> MLM company btw that messes up the entire industry, it's the
> distributors.
Uh hunh. It's not MLMs that hurt people. People hurt people. Okay,
while you're over there, could you snap a few pictures of the pyramids
and the Sphinx for me while you're enjoying being in denial? Whenever
it gets down to arguments like this (my tool doesn't hurt people, it's
people that use it wrong that hurt people), it's clear someone is not
paying attention to the destructiveness of the tool, object, or
organization in discussion.
> MLM companies in most of their Policies & Procedure
> statements + Distributor Agreements, do not do more than provide
> logistical & product support.
Are you really that naive?
> The distributor teams are the ones
> responsible to devise methods of how it is best to get the objective
> of moving the most products out to the public, hopefully abiding by
> ethics & the agreements they signed (sometimes unwittingly) with the
> company. All companies go to business with the sole intention to make
> a huge profit.
Huge? Not always. The mom'n'pop bookstore on the corner makes a living
for people. The same with almost any restaurant. "Huge" profit is not
always a motivating factor. I know people that run their own
businesses because they want to do what they love and make a living at
it, not necessarily to get rich.
> MLM or otherwise, yes? Ok, so with an MLM company, a
> large number of the public can have an active "share" of the amount
> of profit they want to make with the company, something like a normal
> company's shareholders, except that in MLM we have the choice & power
> to write our own bonus check every month & we don't the liberty of
> just sitting back & hoping our investment in the company's shares or
> stocks make a huge jump in the market.
I'm trying very hard to parse that run on sentence. It's hard to be
clear about parts of it. I've been writing my own checks for 6 years
or more and I've noticed the thrill runs off after a while. Yes, it's
nice to have your signature at the bottom of your paycheck, but there
are other ways to do quite well. Our family receives dividend checks
from a number of companies each quarter because of my Father's
investments. True, none of us sign those checks, but the money is just
as green as it would be if we did.
Personally, as someone who has seen his parents become wealthy through
stocks, it sounds as if you're praising MLMs and speaking poorly of
stocks because you may not be aware of how stocks work. True, you
hope, but that's exactly what you've been doing for years with MLMs.
And there are many other differences that turn the advantage to stocks.
You can invest well and wisely with about an hour a week of work and
study. Were you able to build your MLM organization on that small a
time commitment? Or were you working a full time job AND spending most
of your extra time on building the MLM setup you have?
You are vastly underestimating the value of stocks and investing.
> The up-side to that is we get
> paid exactly what we are worth, the down-side of that is we have to
> work.
This upside yo mention is quite nebulous. What are you worth? I don't
even take any work that pays by the hour anymore because it actually
leads to me making less than keeping my company going. The last time I
did a job that paid by the hour was about 2 years ago. It was $500 for
what amounted to 45 minutes of work. Does that mean I'm worth $667.00
an hour?
And remember that other point: "The down-side is that we have to work."
Let's remember that, shall we?
> I suppose people participate in an MLM business not
> understanding that this is their own business, and they are
> partnering with the company together with the field support of their
> sponsorship line to build their own income based on how the
> compensation plan is designed (which btw, they are all different -
> there are good ones and bad ones). Each distributor is INDEPENDENT,
> but everyone in the sponsorship line above this one distributor, have
> a vested interest in his/her success, because it contributes to their
> checks as well.
First, and just an aside, I hate the word "partnering.
like "access" or "grow a business" have been. They're buzz words
designed to sound good. Blech! (And yes, that's just a personal peeve
that has nothing to do with your argument.)
Every MLM I've seen uses "It's your own business" as a selling point.
Here's some major questions: Is it your own business? Can you sell the
business you've built up for a price YOU name? Is it possible for the
upline to take it from you? Check your contract, in many cases it is,
and people don't realize it -- the line given is, "That never happens,"
but if they have the right, it can happen, in which case it is not YOUR
business. Do you have a corporate charter? Did you file papers to
declare the business an actual entity? Is it a partnership, a
subchapter S, a proprietorship, or a stock corporation? In other
words, does it exist legally, in the eyes of the state and other
governments? If not, then it is NOT a business and you do not control
it which means it is NOT yours.
Yes, as you say, the upline has a vested interest. Yet there are some
comments you've made that I've questioned and others I will not
question yet because I'm waiting for other answers that make me wonder
if it is possible for the upline to do well even if the downline is not
making a profit.
> So back to your question, what I meant by balance awareness is this:
>
> a) A MLM company is just a vehicle for everyday people to make
> unlimited income if they so choose to.
So you aren't concerned that the odds of someone actually making a
profit in an MLM overall is less than the chances of going to Vegas and
laying down your money on the table?
There are a few MLMs I don't have a problem with. I think overall Avon
is okay. I'm not sure of Pampered Chef. I have heard some say
Pampered Chef is a different setup where the focus is only on part time
work and not on getting people to spend continually.
> The company owes them nothing,
> and they owe the company nothing. It's a partnership by choice. So
> make sure no one tries to force or coerce you into one, never join a
> company/ buy a product just because it's a friend. It's a business,
> and if you participate, it'll be your business - so you better be
> clear why you want to participate in the first place. Treat it like a
> business, and it'll pay you like a business.
Not always true. For example, and this is one example, joining
Quackstar is a choice, but it is also set up as a choice where people
are misled and join with a misunderstanding and are later brainwashed.
They stay and they make a choice to stay, but it is not entirely of
their own free will. If you don't believe me, check out Rick Ross'
website -- and not just about Quackstar, but about other MLMs as well.
> b)There is work involved. Like every other legit money making model,
> the money does not just materialize if you go for meetings, and buy
> the product for your own use. There's alot to learn, before you can
> expect to earn the big bucks some people seem to love to push.
So how much money is usually invested and "lost" in any expenses before
someone makes money? What percentage of people that start working as
distributors actually make a profit in your company?
> If
> someone tells you about income potential, make sure you understand
> that it is projected & ideal.
Yes, this is a prime point in any investment situation.
> This is what the company has put aside
> to reward those who have earned it (i.e. based on their results).
> There is never such a thing as something for nothing. So if someone
> tells you that, they either don't know what they are talking about/
> they are straight out lying.
>
> c) And MLM is one of the best vehicles to create WEALTH. Not just
> income or some money, but Wealth.
Define wealth. What do you mean by it?
And no, it is not the best vehicle for it. It is one where a few people
gain income or profit, but most lose. Yes, most lose. I had a chart
on my desk for a while that compared the chances of making money in
Vegas at various games with the chances of making money in an MLM.
Over 99.9% of people in an MLM will lose money. If I decide to bust my
tail in an MLM for 10 years and invest $100,000, even if I pick my MLM
carefully and use all my experience to evaluate the one I join, my
chances of making *any* money are far less than if I just take that
$100,000 to Vegas and spend an evening at the blackjack table (where
the odds are significantly better than most games).
This is a mathematical fact. I would give you the link, but I don't
have the chart in front of me and don't remember the site. I know
there are others here who could provide you with that link.
> You do the work right one time, and
> it pays you over and over.
Supposedly, and that's what they say, but the number of people who have
failed and have been in the business for years and still have not done
well disagrees with you. Yes, the facts, the numbers, the evidence
disagrees with you.
> Your income is not dependent on the hours
> you put in anymore after a few years working an MLM business.
I have yet to see an MLM that proves that. I know of many cases of
people who claim to spend only a few hours in their MLM per week, but
have a calendar full of meetings, presentations, and so on.
> And
> this is dependent on the company, compensation plan, product, timing,
> etc of course. Do your own due diligence, review it like you would
> review a company before you buy their shares/ stocks. The company &
> what it offers plays a big role too.
Yes, do your due diligence. But if you do that, then you find that if
you invest in stocks, all it takes is money and the odds of making a
profit are much higher than those of making a profit in an MLM. If
you're doing due diligence, then you're comparing many ways to make
money and your research will show you that stocks, or even Vegas, will
provide you with a higher chance of success than an MLM. Less than .1%
of the people who join an MLM make money.
> So the awareness I want to create is, MLM doesn't hurt people, people
> hurt people.
This is equivocation and song and dance. I'm sorry to be so direct
about it, but if you can make a statement like that, then you are
ignoring facts.
> It's a business, and a business model. And comparatively
> to other business models, it's one of the best for anyone to create
> wealth.
No, it isn't. There are much better models and many better ways to make
money. Try reading "The Millionaire Next Door." Read about the
janitor who is a millionaire, for example.
And, while I'm at it, I'll ask a direct question, since you claim that
it is so good a path to wealth: Are you wealthy? How wealthy has your
MLM made you? Extraordinary claims require extraordinary proof.
> And, it is NOT for everyone. It is only for those who want
> more in their lives and they are willing to work for it, willing to
> learn, and willing to help others win.
Ah, the recruitment song and dance you've been taught starts now.
Please.
One can lead a very full life without an MLM. Actually, maybe even
fuller.
> I know you guys have been
> hurt, trust me, so have I in this business with unscrupulous people
> out to make a quick buck for themselves. People like that won't last
> very long.
Have you ever heard of Dexter Yager or Bill Britt? Or Larry Winters?
Remember how there are a number of times I've said you're ignoring
facts? This is one. These are three people proven to have no morals.
They've been doing quite well making more than a quick buck in MLMs.
> I have spent tens of thousands in this industry, of course
> i was angry, and felt cheated, but still, it doesn't mean the
> business model doesn't work or that every single one is the same.
Why didn't you look at other avenues, like stocks, or your own company?
> It
> works, and it's not the same! Just approach this business model for
> yourself with knowledge, discernment, controlled excitement (don't
> let all the promises make you stupid) and be prepared to see it for
> what it really is, not just what your past experiences in it or
> worst, other people's past experiences in it were. It's a great
> business, if people are willing to think of themselves last, and
> others they bring in first.
You're losing me because I'm hearing all the same kind of doubletalk
I've heard from everyone in Quackstar, yet not a one of them was
thinking at all. They had been assimilated by the collective and
stopped thinking. At this point, this is turning into a cheerleading
session.
> I want people to know that this business
> is legit, and it only works if you approach it like a business with
> ethics and integrity - meaning do your homework, and do your work,
> not everyone is suitable for it, and you're not a salesman.
Again, I can cite people that have done quite well with no ethics at
all. In many MLMs the only people that do well are the ones with no
ethics. It deeply concerns me that you don't know this or don't pay
attention to this fact. It is the elephant sitting on your couch that
you don't want to see.
> You're a
> business developer.
Okay, you're a business developer. What kind of marketing plans have
you come up with? Tell me about the times you have sat down to look at
the numbers you're making and worked out projections to see how well
you'll be doing in a few months or years? What have you done in terms
of making decisions on how to market? How do you approach finding ways
to cut costs? How are you managing the income to decide what
percentage is invested in expanding your company and what percentage is
used to replace capital investments, and what is profit?
I ask because anyone running a business will be able to discuss these
topics.
> The faster people get that, the less pain they
> would feel when their friends approach them, and if they choose to
> enter the business, they won't get hurt at all.
This statement is so naive and so far from the truth, I'm not even going
to start on it. If I started on this, I'd spend many typed pages on
how disconnected from the truth it is.
...
> Oh shite Hal, I just scrolled up to see my own reply. Sorry it's so
> long.
The issue is not the length, but rather that you have paragraphs that go
on forever, so it's hard to see when one subject starts and one ends.
It makes it very hard to read.
> But yeah, sometimes I think I failed so many years before
> because I wasn't one of those who believe everything I was told.
Or maybe the system just didn't work. Isn't that possible? Considering
that less than .1% of people in any MLM make money, isn't it just
possible the model is flawed? (I think it's actually closer to less
than .01%, but I'm sticking with what I know to have been proven.)
> It
> wasn't easy to keep an open mind after being so hurt, but i did alot
> of research, reading and thinking. The biggest impact was when I met
> Robert Kiyosaki,
Uh, right.
I started reading your response and thought maybe you have good points
(and you had one or two), but noticed that the more I got into it, the
more it was filled with doubletalk and cheerleading. It's a lot like
most MLM pitches: start with a few facts to gain confidence, then get
people excited so they won't pay attention to the lack of facts from
then on.
But when I read this, it cinched the deal. Kiyosaki is a liar who has
realized he can get rich by being a paid motivation person for MLMs. I
have read bits and pieces of a few of his stuff at the bookstore and
found so many misstatements and errors I gave up on him, but since then
I've read quite a bit about him online and seen I'm not the only one
that knows the emperor has no clothes. He sounds good to those without
much of a financial or business background and does have some of the
basic rules down, but a lot of the rest is, well, er, I'll be polite
and call the rest hot air, but I won't say from which end his hot air
comes.
> and found out that he was advocating the industry
> (this was 7 years ago) -
Of course he is. They pay him to do it, so he thinks it's great.
> i just told myself, that someone like him
> can't not know what he was saying, because i was looking for a
> vehicle to create residual wealth & couldn't afford properties then.
> So I never gave up on the industry, but I do review new opportunities
> etc after that with more discernment. Some are good deals, some are
> legit, some are outright lousy, and alot are scams. Just like in any
> other industry, it's a fact that this one is just more susceptible to
> scammers that's all.
Actually, it is permeated with scammers. It's not just susceptible.
It's filled with mostly scammers. If that were wrong, then many of the
other 99.9% who go in MLMs would make it.
Hal
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