PJ in NY, I had been thinking along those lines too. Can a MLM be structured so as to not be ruined by a tools business or simply building a wholesale buying network?
Let me share my experience with one of the honest MLM operations.
I had been an Alpine distributor of which the product line is now known as Ecoquest. I still use that original machine I bought for myself in 1981, than used that as a demonstrator.
I got involved after the founder Bill Converse came to my house to show me a unique product. I met him at the local Home Show the day before. I was impressed and bought one and than signed on to be a dealer. I've sold a lot of them over the years and had peak periods of interest with it and several years I had dropped out. It fit well with my main business which is a Carpet Cleaning service and even when I was not currently signed on as a dealer, I knew where I could pick one up for delivery to my clients.
The line is unique and is best sold through informed individuals. Briefly, and not intended to be a commercial but for understanding only - the air cleaning units do not use filters to clean the air, but electronically clean the air by radio wave pulses in a 60 foot radius and a user controlled low level Ozone generator. This would work even through walls, so you did not need one in every room, and most often one properly sized unit on top the refrigerator did the whole house. They have small filters on the units, but that is only to keep the machine clean inside the unit.
Bill Converse hired on the largest Shaklee dealer to update his program into more of a MLM structure and eventually he owned 1/2 the company. I don't know where it stands now, nor the reasoning behind the name change, as I have not been an official dealer in several years.
The product line has expanded to have side products such as vitamins in order to have more volume and continuous volume flow through the organizations, and not just rely on the one time expensive machinery sales.
I did not find the same corruption nor building up of a buyers network, like many MLM's I am aware of. I've been out of it for quite a while, but I can honestly say they were truly sales oriented and less on the MLM aspects.
It was promoted as a purely sales orientated business with suitable rewards for building a sales organization. The company provided lots of technological information for it's sales force and less focus on the motivational materials.
I think it's more likely a good MLM business model if the focus is sales and is a product line not suited for casual salespeople in a store.
I remembered we had a policy that one could not become a wholesale dealer, until you first bought one at retail. This way the sales efforts was rewarded and if that buyer developed into a real salesman, his demonstration and also recruitments would be properly rewarded.
There was one big wig who had a tools business for his distributor organization, but it was a minor aspect and his newsletter was a free subscription. If there was something the company did not provide yet we needed, he would seek the best solution and make a volume buy and make those items available at reasonable prices. Quite a bit of what he developed became materials available to all the Alpine distributors.
So yes, I think an honest MLM business can be designed and run. If rules were put in place early on so a tools business and resulting greed, nor deceptive practices could not take over the whole business.
Tom K
Charlotte, NC
Formerly Alpine Distributor (3 times, yet still sell some on occasion)
Formerly Nikken Distributor
Formerly Amway Distributor (5 times over the years, and thinking about it again)
I must be looney!!
----- Original Message -----
From: PJ Stafford
To: mlmsurvivorsclub@
Sent: Wednesday, October 24, 2007 3:46 PM
Subject: [MLM Survivors Club] Is MLM Inherently Evil? Or is there ANY good way to do it?
Dear MLM Survivors
I have read over with some astonishment the tales of pain and
deception from those of you who are "MLM Survivors".
I would welcome any advice you may be willing to share.
HERE IS MY QUESTION:
Is it possible for the right product/service to be sold with MLM
incentives in place and NOT BE EVIL? Or does the MLM structure just
bring out the evil in everyone invovled since the incentive is to
simply recruit more fresh bodies and not really service the END
CUSTOMERS with great service?
THE REASON I ASK:
I am starting a business that involves direct sales of both niche
products and, more importantly, services, to homeowners.
MLM seems to offer a couple of key benefits to a COMPANY, such as not
having to hire and pay a bunch of $75,000/yr regional managers nor
paying a HQ team to market to and recruite distributors/
In theory MLM structure gives people (at least the early people) a
chance to have an ongoing stream of income from the sales of the
people whom they both bring into the organizaiton and coach and
manage and who actually succeed.
NO I AM NOT RECRUITING..
Other options include:
A) a Franchise structure, but that invovles consultants having to
pay at least 15,000 upfront to help cover the large costs associated
with the very legal Franchise process, and of course, a $100 starter
kit is a much lower barrier than a $15,000 + franchise fee...
B) A simple distributor agreement where people get their, say, 40%
markeup or more on the product/service, but dont have any real
financial incentive to help recruit or manage others in their
city/town
So are there any MLM organizations that are not evil..or is it an
unavoidable outgrowth of the Upline/Downline structure, which just
gets magnified if the company is selling some crappy product that
people dont need or could buy a substitute at Wal-Mart for 50% less
anyway...
PJ New York, NY
============
Yes, I have seen this defination in the FILES section of this Yahoo
Group...
Simply removing the payment based on the sale of your downline would
turn a concept from MLM to just direct sales thru distributors.
<SNIP>
FTC et al v Equinox International Corp et al "Multi-level marketing
program" means any marketing program in which participants pay money
to the program promoter in return for which the participants obtain
the right to:
Recruit additional participants, or have additional participants
placed by the promoter or any other person into the program
participant'
similar grouping;
Sell goods or services; and
Receive payment or other compensation, in whole or in part, based
upon the sales of those in the participant'
cooperative, income centre or similar program grouping
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