On Wednesday 24 October 2007, PJ Stafford wrote:
> 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.
With an MLM, you have to train the first level of sales people, then
they train more, and so on. You get a lot more levels between you and
the lower echelon of sales people. That means you have less control
over what is going on and much more room for abuse.
You're also working with an organizational structure that has been
proven to be easily corruptible and many people have learned to run,
screaming and waving their arms in terror once they're approached by
someone in such a group.
To be honest, that you are contemplating this as part of your business,
it makes me wonder if you have the business experience to run a
business once it grows to the size where it would need this kind of
structure.
What you're looking for is a shortcut to be able to create a large sales
force without having to pay professionals and without starting small.
That just doesn't happen in the world of real business.
Start small. Start selling on your own. Find places that can sell your
product, like local non-chain retail stores or create a website and use
that (and market the web site). Start networking so you can find
connections like a distributor who can make your product available to
many stores.
It's true, that means you're not going to start with a huge sales force,
but you've got a choice of doing it right or using an organization that
is easily corrupted and could haunt your business for years.
> 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...
It's not that MLMs are necessarily evil, but think of them like power.
A person can rise up a little in an MLM, get some people under them,
and start to feel like they have some sense of power, then start
creating their own setup where they can take advantage of everyone
under them.
Hal
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