My blog on Multi Level Sales created a little ruckus, which is fine with me. I have actually been approached several times within the last month for a variety of these “opportunities.” It is kind of interesting working in the field I do and writing for a newspaper on energy topics. When I write things for the paper my readers will call me on any inaccuracies and then I must write corrections and apologize later on. I have lived in the world of sales claims for many years like all Americans. I’ve come to really despise sales claims that are inflated or bogus. It is like people say don’t confuse me with any facts because I’ve already made up my mind, I am personally benefitting therefore it must be good or true. So, before I write about why I don’t like MLM systems no matter what product is inserted into the system, I’d like to say, as long as this is America and it is legal you may jump into any MLM your heart desires. What I am writing about is my research, my thoughts, my position on a topic. I don’t have to agree with you nor you me. If you choose to jump into one of these MLM systems I hope you are part of the 1% who actually profits from the system rather than part of the 99% who will not profit but merely feed the system and those at the top.
Here are some of my rubs with the whole MLM concept.
1. In a regular sales position the profit the salesperson makes comes from the product he is selling. You can make a living by selling the product. There will be enough margin built into the product to stay competitive and feed the salesman and the business. In MLM systems you cannot make a living by selling the product unless you also recruit many layers of people to also sell the product under you. So, by the very nature of needing to get profit out of the product to pay up to five or more layers of people above you the products themselves have inflated prices and the commissions are less than industry standard. Proponents will say, we don’t get money from our recruits but only from the product, but they get either a cut of what their recruits sell or a higher percentage of margin based on the number of recruits they have under them. No recruits = no real money.
2. By their very nature they will hit a saturation point and most cannot maintain them for a lifetime career because you run out of recruits. I’ve watched this for 35 years. A product hits town, there is a frenzy, everyone and their brother jump on, two years later its gone and you don’t hear any more about it. What happens? You recruit or attempt to recruit everyone you know because you know it is the key to the big money. Ever hear of the six steps of seperation theory? Everyone on the planet is connected to everyone in some way within six links! When you recruit all your friends and associates, most of their friends and associates are going to be your next marketing level once you get through everyone you know. Soon, the well goes dry. You try to recruit and you start hearing, “Oh yeah, I tried that, so and so invited me!” One benefit right now is there are so many desperate people out of work it may be easy to recruit in this climate but it also may be more difficult to sell any product to anyone not in the system, but then, that doesn’t really matter in most MLMs.
3. This last one is true of many sales people but especially those in MLMs. Because the actual product is not the main driver of profit, the people are often just parroting some facts or statistics that was developed by the upper levels to make them go. The claims are often exagerated and don’t stand up to real research. It is very much like members of a religious cult who just say what the leader has told them to say. They are walking infomercials that sound good but don’t offer any substantial third party credibility. So, the exotic beverages that heal, the creams that are the best ever and the vacations and fianancial opportunities that look so amazing, will not stand up to third party review. It is smoke and mirrors my friends.
4. Because of my personality, I know I could be successful at almost any of these things I chose to put my mind to. The reality is, most people don’t have the ability to succeed because they won’t be believable, lack the social skills and communication skills or a network of friends who believe in them enough to sign up. But the people who are in the system need people under them to make more money so the promise is dangled out there that anybody can do it. But that isn’t true and the research of 350 MLMs will back that only 1% when considering all business, training and other expenses actually profit.
Finally, if I was unemployed and in jeopardy of losing everything and that was my only option to make money, katy bar the door because I’d be the best MLM salesman you’d ever see!
Do your own research, there is plenty of public information on the real earnings of people and the real value of products!
Be Wise as a serpent and harmless as a dove,