Im Tam wrote:
> What kind of business do you think you can get into that requires you to do nothing, buy nothing, invest nothing, no training, and then earn money?
I don't.
But the people that run Herbalife, Amqya, Quickstar, Melaluece,
Prepiad Legal, and a myriad of other MLMs scams _do_ make that claim.
And when their victims hear it, and beleive it, the victims lose
money. Ltos of money.
> I mean seriously...
A good franchise will kick start the business. A bad franchise will
hinder the development and growth of the business. In either instance,
properly run, a franchise can be a money magnet. It depends upon the
quality of service offered by the specific franchise owner.
> If you want a McDonald's business, you better have been trained about what the
a) No MLM has anything that offers the equivalent training of
McDonald's Hamburger University.
b) No MLM permits one to do the amount of data research that is
required to make an informed, intelligent choice about their
flopporunity.
> Wouldn't it be ridiculous to think they should just hand you over the products and equipment to run the business of any kind at no cost to you?
a) Don't you think it is ridiculous that MLM prohibit people from
reading the terms and conditions of the contract that they are obliged
to agree to, until after they have signed it.
Yet that is exactly what Mary Kay, Herbalife, and Melalueca, amongst
other MLms require.
b) When an organization claims to offer "free training", then that
offer should be seen as meaning:
* There are sessions in which the consultant can learn how to sell the product;
* There are session in which the consultant can learn about using the product;
* There are sessions in which the consultant can learn when the
product should not be used;
* There is no charge for those sessions;
No MLM offers that on an ongoing basis. You can find an occasional
director who offers that to their downline.
c) "The equipment to run the business". I"m not sure what you referring to here:
* Herbalife offers a Body Mass Scale that does not meet medical
criteria, but is priced as if it does. I can buy a consumer grade BMI
scale from Costco at a significant fraction of the price that
Herbalifes is. And the one from Costco is at least as, if not more
reliable than Herbalife's;
* Other MLMs offer "business tracking software". The cost of this
software is US$100, or more. Captive audience, that requires that one
run a specific version of a specific operating system. It makes far
more sense for the company to write an extension to OpenOffice.org,
and let the distributors use their platform of choice;
> Do you really honestly believe that you shouldn't be a product of the product,
That is MLM speak for "we know the products are bad, but you have to
buy them so we can make money".
> I mean how can you sell ... anything if you haven't used one or tried it?
a) A good salesperson is excited, enthusiastic, _and_ knowledgeable
about their product. That does not require the salesperson to be a
user of the product. I will grant that in most cases the salesperson
is a user of the product.
Merely using the product, or being a "product of the product" will
_not_ make one a good salesperson. The usual effect is to turn a
margin salesperson into an inferior one.
b) The sales person's belief about the integrity of the product is far
more important to their ability to sell, than their use of the
product. Using a product has no effect upon belief in the integrity of
the product. The correlation is between belief in product integrity
and sales, not usage and product sales.
> I know I wouldn't invest my money in a stock broker that has never bought or traded stock on his own,
Do you look at the number of times your stock broker has gone bankrupt?
If s/he hasn't, then they probably are inexperienced in playing the
stock market.
>It requires work, not matter the business AND money. I mean guys, come on....
I know that running a business requires work. However, that is _NOT_
what the recruiting posters for MLMs state.
> And as far as the 99%+ that don't make money, that's not exactly accurate.
True. The actual percentage of people who make money in an MLM is a
statistical zero.
>to prove a point, let's look at traditional business.
> 80% of businesses fail in their first 2 years. Now these are guys
The percentage of businesses that are still open after two years,
depends upon the industry.
For MLMs, 80% of the people who sign up, are out within 180 days.
After five years, a statistical one hundred percent of the people are
out.
Repeat, a statistical one hundred percent are out of the game.
> So what happens to the traditional 20% that are still in business after
2 years? Another 80% fail before they make it to 5 years.
For starters, your figures are off. Way off.
The conventional wisdom is that 80% of all new ventures are out of
business within 5 years,not two years. That conventional wisdom is
based on the name of the company remaining the same, _and_ staying at
the same physical address.
To make things clearer:
According to the conventional wisdom your company is a failure if any
of the following happen:
* You move to a new location;
* You are bought up by another company;
* You merge with another company;
* You change your business name;
To emphasize this point:
Going by that conventional wisdom, Mark Shutttleworth'
Security was a business failure because he was paid US$575 million
dollars for it by Verisign in 1998.
Don't you think that that is a great way to be a business failure? To
have somebody pay you over half a billion dollars for your business. A
business that was founded less than three years earlier on a shoe
string.
This in not the only company to have "failed" so specularly, if one
uses the criteria that the conventional wisdom uses, to determine that
"80 % of all businesses fail within 5 years."
>And that is the same in the network marketing business too.
Not even close.
In the network marketing industry, things are designed so that people fail.
> See where the numbers say that 'so many have failed' are for several reasons.
The major cause of the failure is the inherent design of MLMs that
prevents people from succeeding.
> One, they don't feel they 'owe' this business of their choosing anything. And then wonder why it doesn't grow like the magic beanstalk thrown out the window.
That is the fault of the MLM for making false and misleading claims.
When an MLM claims that one does not need to do anything to make
money, and is believed, then the onus of the failure is on the MLM for
false and misleading advertising.
IOW, that excuse is valid only for an MLMer who has paid back ten
times the amount that their victims lost, in restitution, for their
(the MLMers) ongoing criminal activity.
> Two, they really do try, they do all they can as they muddle around in this new business, but they are doing it all wrong. It's not their fault, their heart
That reason is valid if and only if the MLM admits that they are an
ongoing criminal organization, and has paid its victims back ten times
the amount they lost in restitution.
> There is a right way of doing this business, but the truth is, its not being taught in mainstream network marketing.
There is no way to run an MLM that is moral, ethical, and legal.
Mainstream networking marketing is as it is,because MLMs are
inherently immoral and unethical.
> It is in the boardroom, it is in the corporate circles.
I've run a brick and mortar store. I've run online businesses. I don't
object to paying for what I need. What I do object to, is being told
that I need "x", when "x" does nothing to prevent potential issues, or
increase my net revenue.
I used to keep an attorney on retainer. He was expensive. The sole
reason for keeping him on retainer, was so that I would not have to
deal with lawsuits. Prevention is much cheaper than cure.
I wont' sign up for autoshipping, because the only function that has,
is to drain revenue. OTOH, I will sign up for autostocking,
that ensures that I have the products in stock that I sell.
AFAIK, no MLMs are capable of offering autostocking, much less do so.
>I if you aren't going to work it like a business, invest in it like a
business,
a) You can't work an MLM like a business, because the terms and
conditions of the MLM prohibit one from doing so.
* Every MLM prohibits retail marketing;
* Some MLms prohibit retail sales;
b) No MLM allows one to find out the consultant density in a
geographical area, until after one has signed up with them --- and
even then they may not provide that information.
Back in 1993, I started a brick and mortar business. I had a list of
most, if not all of my competitors in that state, and all of the
neighboring states. I also gleaned that one of the major players in
the industry was looking at that geographical region. IOW, my business
plan could take into account both current, and future competition.
In 2003, not only could I not find out how many consultants the MLM
had in the same town as I live, but the idea that a business plan was
essential for running a successful business was dismissed by my
_entire_ upline. Not just the person who recruited me, who had no
business experience, but the triple platinum super crown ambasador who
felt like he was doing us a major favor by allowing us to see his
wretched self, and everybody between those two.
In 1996, a friend of mine signed up with an MLM. Not only did their
upline refuse to provide any training for her, but they also dismissed
the idea that she needed a business plan for her MLM business.
> Third, They quit before they have even begun. Can you imagine saying to CEO of McDonalds, "Dude, it's been 3 months and I have not made my investment back,
I have seen a Macdonald's close within three months of opening,
because the revenue projections were not even close to what was coming
in. (Site selection made a major mistake when they ignored publicized
plans of the county government, and how they would impact sales at
that location.)
>That's how silly this all sounds and how damaging it is to think this way.
You realize that that is exactly how corporate business works.
When a facility does not meet specific profit goals, it gets shut
down. This usually happens long before the facility loses money for
the company.
Sentiment and money usually are mutually exclusive.
I've been reading about a church that nearly split, because the
supplies that were used supported the pension fund for their pastor. A
different vendor offered virtually identical supplies for
substantially. had the church been interested in fiscal
responsibility, and ensuring their pastor had a good pension, what
they would have done was purchased the less expensive product, and
directly invested the difference in the pastor's pension fund.
>What I'm saying is, there is huge possibilities in franchising
oneself in network marketing as a viable business or you can go and
get yourself a donut shop.
They are not the same. With a franchise I have a "protected area".
With an MLM I don't. With a Franchise I have access to detailed
accounting records, so I can see what the reasonable and usual
expenses are. I also have access to data to make a reasonable
projection on gross sales, and thus net profit. With an MLM there is
no way to make even a reasonable guess upon which to base revenue
projections.
> Now let's address the Pyramid scheme issue.
You did not address the pyramid issue. What you addressed was why
people in a hierarchy are paid differently.
> explain to me the classic all time pyramid of CEO, Vice President, Supervisors, Managers, Employees??? You
A pyramid scheme has nothing to do with how employees are paid.
> Listen, the truth is, if the people that whined about the business they have chosen to get into then get out.
IOW, you ant to dismiss whines,becuase they prick you r conscious, and
demonstrate that you are amoral and unethical.
> Just like I would tell an employee that whines because he doesn't want to work in my store and just sit in the bench and still get a paycheck or is just a negative rain cloud everywhere he goes. You'd be fired!
If a person is told before they are hired that that they will be paid
to sit around and do nothing, then firing them for doing so is
unethical.
> So why should you be treated any differently if you are acting like that in your network marketing business?
When I am told "x", and accept it, then am told "y", I do have the
right to complain. More specificly, I have the moral duty to complain
that I was deliberately misled.
> For those that want to learn network marketing the right way, its a great business and anyone that wants to learn the burger business can succeed too, its a great business I'm told. You get my point?
A great business? Then why can't I get specific answers to specific
questions when I talk to MLM recruiters?
A few common examples:
(These aren't even the "hard" questions.)
* When is the median income for:
** Revenue derived from bona fide third party retail sales for the
bottom rung of distributors;
** Revenue derived from bona fide third party retail sales for the top
rung of distributors;
* When is the mean income for:
** Revenue derived from bona fide third party retail sales for the
bottom rung of distributors;
** Revenue derived from bona fide third party retail sales for the top
rung of distributors;
* When is the modal income for:
** Revenue derived from bona fide third party retail sales for the
bottom rung of distributors;
** Revenue derived from bona fide third party retail sales for the top
rung of distributors;
* Why do MLMs prohibit:
** retail sales in a free standing retail outlet?
** Retail marketing?
> It's not just luck. Not anymore than the traditional business is luck.
When I ran my own brick and mortar store I could advertise the store
where, how, and when I felt it would generate store revenue. With an
MLM that is not possible.
Example time: FAA regulations prohibit passengers from carrying
liquids that exceed roughly two ounces in volume. I can't pay for a
billboard across the road from the airport that says "For your MLM
toiletries call blah blah, blah. We deliver, or you can do an in
person pickup."
> There are those that no matter what, they will find a way to be a victim.
> There are those that no matter what, take responsibility for their choices to get into business - no one chained you to a chair and beat you to sign a paper
Physically, probalby not. Psychologically, possibly.
Psychological force is used to prevent people from leaving MLMs.
> I would LOVE to hear what your 'choice' has been for your 'now' and your future. What is the pay model? What will it give you? Think these things through and then go for it.
I am laying out a business plan for a new business. One major issue
I'm running into, is the lack of reasonable data from which to build
revenue projections. I haven't found anything that appears to be an
indepdant survey of realistic income expectations. The most objective
data is from somebody who recounts his experience, and supplements it
with what others report. His data contradicts that which is claimed
by those who promote that specific industry, but is supported by
revenue claims I've seen by those who have "tested the waters".
That said, I expect the business to succeed. I don't expect it to be
"instant riches", but I do expect it will generate enough revenue for
me to live on, until the day i die.
xan
jonathon
Earn your degree in as few as 2 years - Advance your career with an AS, BS, MS degree - College-Finder.net.
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