| The False Lure of Multi-Level Marketing (2009-08-03) |
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marotta
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| The False Lure of Multi-Level Marketing (2009-08-03) |
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The False Lure of Multi-Level Marketing (2009-08-03)
by David John Marotta
Multi-level marketing (MLM), or network marketing, is a nonsustainable business model because it does not provide a valuable service but simply a product that has been marked up in price.
Read the complete column at http://www.emarotta.com/article.php?ID=348
David John Marotta
Marotta Asset Management, Inc.
Fee-only Financial Planning
http://www.emarotta.com
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Tue Aug 04, 2009 3:10 am |
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LottomagicZ4941
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| Re: The False Lure of Multi-Level Marketing (2009-08-03) |
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quote:
Originally posted by marotta
The False Lure of Multi-Level Marketing (2009-08-03)
by David John Marotta
Multi-level marketing (MLM), or network marketing, is a nonsustainable business model because it does not provide a valuable service but simply a product that has been marked up in price.
Read the complete column at http://www.emarotta.com/article.php?ID=348
Some say MLM stands for most lose money.
The main problem with MLM is that most people don't like to sell. All it really is a split commision.
Many insurance companies and auto dealers are MLM. If a auto dealer pays bird dog fees then it is MLM in my book.
Some rip on MLM while others build a downilne. And even some MLMers like to bash MLM. Probably cuz of detestiable practices like front end loading.
It seems that Avon and Mary Kay are still in buisness. Though I don't agree with front end loading.
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Wed Aug 05, 2009 1:00 pm |
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Bornwinner
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| Re;The false lure of MLM. |
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Hi Marotta,
I strongly agree with you.MLM is a very tricky business model to go into starting out at the lowest level as a distributor.it is very difficult to know which are the correct MLM company to join which do everything fairly with a good compensation plan base on integrity.
The tricky part lies in the terms and conditions which is written in fine prints and technical terms which are difficult to understand.It is advisable to consult a professional before joining.According to Robert Kiyosaki,good MLM or networking companies are very rare.
It takes time to succeed in networking companies.I had seen associates took in lots of stocks in order to advance up the levels faster and got stuck when they failed to build up the network.To continue getting the commission,members need to keep a consistent amount of personal sales.
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Mon Aug 10, 2009 2:42 pm |
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rbabi18
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I would agree that it favors salespeople more than just the common man. I do think, however that the common man can learn and be successful at mlm, especially in this age of internet information.
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Wed Aug 12, 2009 12:22 am |
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LottomagicZ4941
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| Re: The False Lure of Multi-Level Marketing (2009-08-03) |
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quote:
Originally posted by coaster
quote:
Originally posted by LottomagicZ4941
It seems that Avon and Mary Kay are still in buisness. .
And Mary Kay is still giving away pink Cadillacs; although now they're Cadillac SUV's. 
I saw one a couple weeks ago at a gas station. Actually looked pretty sharp with the gold Mary Kay logo on the side.
Don't think they give them away. They they have to earn them. One Mary Kay gal offered to hook me up with a wife if I joined. Her daughter yelled so that is how my mom got all those men!!! When I told her about the offer. I would have joined too if the shaving cream had been as great as they claimed. In reality I got the worst razor burn of my life on it.
3/4 Mary Kay cars that I have seen have been caddies but I did see one that was a Grand Am.
Also saw a clam online that there are 5 million Avon members world wide. And quite a few are happy retailing and not building a downline so I can see some validit that not all of them are MLM.
Sams club is running adverts that one of their supplements is cheaper then Juice Plus. The regular companies let us MLMers creat a market then they jump in.
Water Filters and Smoke Alarms started out MLM.
What if Cable were MLM? Instead of paying $50 a month plus you could make money. It is a problem that many MLMs are over priced.
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Wed Aug 12, 2009 1:18 am |
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No-Brainer
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quote:
Originally posted by rbabi18
I would agree that it favors salespeople more than just the common man. I do think, however that the common man can learn and be successful at mlm, especially in this age of internet information.
It doesn't just favor salespeople, you either become one or you don't survive. That's why they have a 95% attrition rate and once your downline starts quitting the pain moves up fast.
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Wed Aug 12, 2009 1:23 pm |
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LottomagicZ4941
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quote:
Originally posted by No-Brainer
quote:
Originally posted by rbabi18
I would agree that it favors salespeople more than just the common man. I do think, however that the common man can learn and be successful at mlm, especially in this age of internet information.
It doesn't just favor salespeople, you either become one or you don't survive. That's why they have a 95% attrition rate and once your downline starts quitting the pain moves up fast.
Restraunts also have a 95 percent failure rate but people don't belly ache that Restraunts are a scam.
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Fri Aug 14, 2009 7:48 am |
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No-Brainer
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quote:
Originally posted by LottomagicZ4941
quote:
Originally posted by No-Brainer
quote:
Originally posted by rbabi18
I would agree that it favors salespeople more than just the common man. I do think, however that the common man can learn and be successful at mlm, especially in this age of internet information.
It doesn't just favor salespeople, you either become one or you don't survive. That's why they have a 95% attrition rate and once your downline starts quitting the pain moves up fast.
Restraunts also have a 95 percent failure rate but people don't belly ache that Restraunts are a scam.
When was the last time you talked to someone that had one fail?
I have a good friend that lost $100,000 in two years with a franchise restaurant and he sure says that.
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Fri Aug 14, 2009 1:21 pm |
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LottomagicZ4941
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quote:
quote:
Originally posted by No-Brainer
quote:
Originally posted by LottomagicZ4941
[quote="No-Brainer
It doesn't just favor salespeople, you either become one or you don't survive. That's why they have a 95% attrition rate and once your downline starts quitting the pain moves up fast.
Restraunts also have a 95 percent failure rate but people don't belly ache that Restraunts are a scam.
When was the last time you talked to someone that had one fail?
I have a good friend that lost $100,000 in two years with a franchise restaurant and he sure says that.
I talked to Linda the owner of the pizza place in Dacono Colorado.
Someone told me she had been there for 17 years buying it 10 years ago when the previous owner retired. When I heard rumor of the closing I went and talked to her and she told me that she only sold 1 pizza on monday that week.
It was a very sad day when I found out she was closing.
She said the only way she could stay in busisness was if they lowered her rent.
A new Indian Restraunt just went out of buisness. Didn't get a chance to eat there. But they certainly spent a small fortune in advertizing unless they got a major discounts.
I do perfer to suport the ma paw restraunts. Chicos in Broomfild is a great Mexican that is still in busisness last I checked. Roma in Greeley and Thorton is a great pizza shop still in buisness.
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Fri Aug 14, 2009 2:48 pm |
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Moneybagz
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I completely agree. MLM is tricky these days. I hear lots of people saying they lose money from MLM etc. It's something everyone should avoid. Very interesting article as well.
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Fri Aug 14, 2009 6:00 pm |
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No-Brainer
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quote:
Originally posted by Moneybagz
It's something everyone should avoid.
How can you possibly make a blanket statement like that?
There are some people who do very well with MLM, just not me.
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Fri Aug 14, 2009 6:45 pm |
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Moneybagz
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I noticed you said "some". Lots of people lose money from it and I don't recommend it. The "some"people who do well from it are lucky, lucky, people. I don't ever do well in it lol.
Although, I do agree with you, not everyone should avoid it. I guess my past experiences from it made me dislike it alot.
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Fri Aug 14, 2009 7:27 pm |
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Offshore-Wealth.com
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| IS MLM GOOD OR BAD HOME BUSINESS MODEL |
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Interesting,
The age old question of love or hate of MLM industry. There are hundreds of companies which use the MLM model, and many have been around over 50 years, so to make a blanket statement about anything is just plain ignorant about the industry, sorry, but come on, there are good MLM models and bad ones, sadly, many more bad than good, but never the less, you can't make a blanket statement about whole industry without knowledge of the good ones.
Most people fail in MLM, and the reasons are many, misled, hyped, lied to, overpriced products that don't work as promoted and outright scammers, but that still doesn't mean all MLM's are bad. When a person fails in MLM, all of the sudden it is everyone's fault but their own, so they bad mouth the industry as a whole, and there are plenty out there who do just that, sour grapes, and sadly, the industry gets ripped for personal failures as well as often when company fails to deliver. Such is life, but only the ones who don't quit succeed.
I have seen it all over the years, but I don't blame the industry, just some of the people in it, which can be said for many industries. I agree about prices being higher, this has long been a gripe for me, and why I don't bother with any MLM unless I see real verifiable value being offered, or an exclusive product or technology, but I wouldn't waste my time with an overpriced me too product which makes up 90% on MLM's as I see it.
If you do your research, there are a few companies which do offer true value, and in a recession like this, you better look for them for you will never make it in MLM if you don't choose a product or service which will save people money of the same name brand or quality products. I research them all, and only a handful meet or exceed my value or exclusive criteria. If I cannot save money with a concept of transfer buying, then I know most won't, so why bother. If I can save money on name brand merchandise I am already purchasing for more elsewhere, then I know it will be a winner.
What are the best recession proof home businesses these days? Good question, any suggestions on what others feel are the best recession proof businesses, I want to add them to my top ten list if you have any. It is ashame there are so few, but this is the nature of the industry, most are high priced product through MLM. I won't mention the names, but who would spend $4.00 for a bar of soap, or over $10.00 for toothpaste as example? Before you consider any business, without value, quality or exclusive products or services, forget it, MLM or not, you won't succeed in your own business.
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Sat Aug 15, 2009 1:30 am |
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scottcommon
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I can speak on this issue a little bit.
My first 5 network marketing ventures were justtrial runs. Truthfully what I was "trial running" was my willingness to go to work by talking to people in a professional, respectful manner and generate leads for my business.
I never went to work so I never got paid.
But I did continue to study what was working for leaders in each of these
companies. I took notes. I kept weighing the cost of learning with the payoff.
In my 6th company I fell in love with the product, got great results and
decided to go to work by following the advice of someone who had already earned $38 million. Within 3 months, working about 2 hours a day,
I created a $100,000 asset value. I stopped working that business at that 3 month mark, but continued to get paid every month for 2.5 years from the asset I had created. In this case, the product was unique and still had value in the market place at it's price point.
It worked for me.
The first challenge with network marketing (in a legitimate company) is that it's an easy in / easy out business proposition and therefore attracts people who have no business being in business for themselves because they have neither the character nor the desire to do the work of a business professional (i.e. generate leads, expose, present, follow-up, close, support and train).
Other than not being entrepreneurially hard-wired in the first place, those
that are naturally inclined for entrepreneurship who go on to join a network marketing company, run the very big risk of being sponsored and trained by someone with less than 1% of the information needed to make it. So not having the right mentor is the second biggest reason for failure in our industry.
And of course the 3rd reason for failure is the same as in any other business model. Just flat out, not doing the numbers; not going to work.
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Wed Sep 23, 2009 2:34 am |
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No-Brainer
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I saw a quote just this morning that typifies this whole thread and the MLM model in general, "You're fast, or you're FOOD". It's the law of the jungle and it applies here too. The ones who win build a huge downline fast with heavy advertising, milk it for a few months and then move on to the next one. It's hard work and very risky in my opinion and I would much rather forget the business, since all I want is the money anyway.
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Wed Sep 23, 2009 2:58 am |
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