Jean DAndrea   Retired
What I find disturbing with MLM is the complete lack of integrity of some
of the programmes.

Remember once being given an email to use as an ad, because it was
getting results. Only problem was, it was supposed to be from me, and
was a complete lie about how much I was making from the program, and
how easy it was to get signups.

I quit the program.
Feb 13th 2008 19:40   

Cheryl Baumgartner   Medical Billing/Coding/Insurance
Well first of all If there is no tangible product or service it is not an MLM but a pyramid scheme. In a true MLM you have a product that you can sell without resorting to recruiting. I can sell my legal services to you and make money without recruiting you.

If the program requires you to recruit to make money and you cannot simply market it without recruiting it is a pyramid scheme. There's a lot of confusion with this because they both have the same basic structure. However it is the same structure that every business has. Whether it is a bank, Real estate company or brewery The structure is that of a pyramid. The MLM just cuts out all of the middle men between upper level and the ground floor.

Take Maybelline and Mary Kay for instance.
Maybelline uses the traditional business model. They produce the product, invest in advertising, shipping and agreements with retailers to stock the product where a woman buys it.

Mary Kay on the other hand produces the product and hires a sales force to sell it directly to the consumer for them. The sales force is a direct link between Mary Kay and with the consumer. With the traditional model, you have a lot of middlemen between the company and the consumer. The sales force also handles "hiring" for the company by recruiting other reps.

But if the individual sales rep does not want to go through the bother of recruiting someone and training them, they can still sell the product and make money.

The biggest thing with MLM is the public misconception that it is easy. People believe they sign up and presto they are rich. You sign up work your rear off for 5-10 years and yes you can be very well off but it does not happen overnight and it does not happen without sweat and effort.

But then again under the traditional business model you work your tail of for 40 years to get a pension which will not support you (if you are lucky enough to retire and don't get downsized out of a job).

This is why people need to do their due diligence, first make sure there is a product or service. Make sure that marketing that product or service does not require you to recruit. Finally check the stability and reputation of the company.


Feb 13th 2008 20:33   

Patricia Adossi   Imagine this.....
I know exactly what everyone is going through, I have been there , I did go backwards back to a program that I was only advertising on and then I was informed how much money I lost and also how many people I had in my downline that joined under me and was not getting paid for... anyway I can cry over spilled milk now , I have went back to them upgraded to executive and now I have money coming from my upline and downline and any paying customers that I bring in, the checks are coming in weekly boy was I missing something!they say never go backwards but in my case, I am glad I did , take a look at my link and join today and find out what you are missing. the program and system works , even with free advertisement and thats the good part.
join for free, if you want to make money upgrade for less than $1.00 a day
http://www.directmatches.com/pattysuccess

You will actually be glad you did
Feb 13th 2008 20:38   

Jenny Stewart   
Hi Kiddo,

First of we have to congratulate Cheryl on a terrif description of what multilevel marketing is all about. It is a marketing system - not a business in itself. Her own business is a perfect example of this, as is Mary Kay, Tupperware, Forever Living products or any of the legitimate companies who use this marketing system.

As you well know, Garnet, you have touched on a subject near to my heart and one which we have discussesd at length in the How DO you choose your Business or Opportunity Group.

As I isee it the problem is two forl,

Firstly, as Jean has alrady pointed out - an tremendous lack of entegrity in some of the companies who use MLM as a sale method. Outrageous motivation courses, to the e4xtremes of brain washing in some cases, in place of sale training and a complete lack of ethics and honesty in the marketing. There is a known breed of marketer who can choose a legitimate product, but "work" the business until it is no longer sustainable and then move on the next when they have sucked it dry. There is a video well known in the spanish speaking worl, by Rene Mantecon on MLM which describes these creatures as the Nomads of MLM.

The second is of course that maytbe 90% of the so called MLMs are not businesses with legitmate products with the ingredients necessary to run a sound business. Good product, substantial financial investment in the product, good management and a sustainable and legal payment plan are the ingredients essential to any business.

In MLM sales companies they are often missing. Too many have little or no product and whilst technically legal are really no more than ponzis which require recruiting not sale to make a living. There are many examples of this on the internet and offline too - but the internet is esspecialy prone to these "air" schemes as they are hard to pin down and there are insufficient legislative controls in many countries.

SO, where does that leave us? MLM as a sale structure is an economic sales alternative for many companie, but before going into it, it requires a great deal of investsigation into theh product and the marketing philosophy of the company before you can establish if this is a genuine business opportunity for you.
Feb 14th 2008 02:57   

Dora Akingbade-Watson   Lifestyle Business Developer
Fantastic comments Jenny and Cheryl,

I wholeheartedly agree, there are some real skeezers out there who fleece the innocent.

However, there are as has already been mentioned, those ambassadors of the MLM world, whose business models, products and services are living breathing testaments to MLM at it's best.

It's clear that people are becoming increasingly disheartened with the normal 9-5 grind, and with the cost of living these days, more and more are turning to alternative ways to supplement their income. MLM clearly works, and you've only got to look at the statics to see that.

For MLM to be of real benefit there has to be all the sound business sense my friends have so comprehensively outlined above, and I will also add to that "great customer experience".

Before we become distributors with a company we first have to experience, understand and enjoy their product or service first hand. How can we possibly want to offer something to someone else when we've never even tried it??? It's shocking the number of people I speak to who don't understand their product or service and yet try to "sell" it.

MLM does what it says on the tin; it's Marketing on several levels, and we do this all the time!!!
Only thing is, we don't get paid to this - but we do it anyway.

Think about it, what do we do when we watch a movie we really like, or eat at a particular restaurant, or experience a great ride at a theme park, or get our hair done, or whatever, what do we do?

We tell someone about it! Sometimes we don't even have to say anything, our experience of that product or service just shows in our expressions, in our appearance, in our behaviour.

We become marketing for that product or service, and we do it all the time.
And what happens, the next person tells the next person, and so on it goes.

I absolutely agree MLM should not be restricted to recruiting alone, however, this aspect of MLM although hard work is nonetheless equally rewarding when you see the positive effect it has on the lives of others.

My ethos is to build relationships and follow up with great service, whether I am leading with the product or the opportunity. It is the only way to do business in my humble opinion.

There's my two cents!

To your success,

Dora
Feb 14th 2008 04:12   

Arthur Webster   Just plain honesty
This old chestnut again?

Every company that produces a product is multi level.

Raw materials supplier
Production crew
Promotion crew
Sales crew
Delivery crew
Customer

The diffence between this fairly standard package and what has become known as MLM is that MLM has an extra layer - the B.S. crew.

These are the people who will tell a meeting of potential recruits in a small town that they can be wealthy and independent if they sign up and sell the products(?).

They speak at great length about compensation packages, on-going traing and other items that will massage the greed glands and deaden the thinking zone. They say little, if anything, about the product, the benefits of the product to the end user (useful information if you are going to sell it) or how many layers of commission will be included in the price the consumer pays.

There is one common strand in all the presentations (and I have been to many) that stresses the amount of money that can be earned by RECRUITING!

I have heard it said, so many times, the best income levels for you are achieved by those people you recruit who continue to sell. True - except that when you recruit people, they are being told exactly the same thing.

The vast majority of MLMs require a monthly commitment to buy the product at the full end user price.

If there is no physical product the vast majority of the rest of them require you to pay, each month, for the priviledge of selling whatever it is the company sells.

What these MLMs are doing is NOT recruiting DISTRIBUTORS - they ARE recruiting CUSTOMERS.

Because these new customer recruits suffer a huge depradation rate, the most successful MLMers are those who can recruit like crazy and retain each customer recruited for a few months so that they have a fairly secure income until market forces necessitate a change of loyalty - when they will re-recruit the same people to make themselves even more money.

From my point of view - I do not know a single person who pays his boss part of his wages for the benefit of working for him so what reason is there for paying an MLM boss?
Feb 14th 2008 04:34   

Dora Akingbade-Watson   Lifestyle Business Developer
Garnet,
You're the best!
Dora
Feb 14th 2008 06:47   

Cheryl Baumgartner   Medical Billing/Coding/Insurance
Actually Arthur indeed they person in a traditional business marketing plan does indeed give his boss payment. It's done through effort. The person at the top gets the majority of the money they then dole out a little bit to the workers below in the form of wages. The higher you are in the corporate structure the more money you make.

The workers on the bottom get a pittance of the profit.
Feb 14th 2008 07:54   

Dora Akingbade-Watson   Lifestyle Business Developer
Amen Cheryl,
I couldn't have put it better myself.
Dora
Feb 14th 2008 08:08   

Arthur Webster   Just plain honesty
Cheryl and Dora,

So what you are saying is the MLMers don't?

No matter what you do for a living - whether you are self employed or employed is EXCHANGE YOUR TIME AND EFFORT IN RETURN FOR THE MONEY YOU NEED TO LIVE ON.

The argument you have postulated is fascile and not worthy of you.
Feb 14th 2008 08:46   

Not Here  just want my account deleted
Wow!..LOL

This is gonna take more time than I have right now to go through. Be back later, actually have two of these discussions taking place right now.
Feb 14th 2008 09:02   

Cheryl Baumgartner   Medical Billing/Coding/Insurance
There is a big difference between MLM and a traditional business pyramid. In an MLM you have control over your income. If you work harder you can increase your income and in effect earn more than the person who recruited you.

In a traditional business model you have a salary "cap". You can work as hard as you like but never get beyond the salary cap. Yes some businesses will reward you with "Overtime" pay but you are still a peon and the potential for advancement is limited. You cannot advance unless the slot becomes empty, and then you have all of the other peons fighting with you for the slot.

With MLM you have different levels and anyone can reach those levels it does not matter. You are not fighting with 10 other people for one position.

In a true MLM, not a pyramid scheme, you do not have to recruit to reach the level you wish to be on. You can do it by yourself through direct sales. For those who do wish to recruit you are simply overriding a small amount of their income as compensation for the time you are taking away from your own sales to help and train them.

After all if you work at McDonald's the manager is responsible for overseeing and training the fry cook and gets paid a higher salary because it is his responsibility. In a legitimate MLM if you recruit someone teaching them how to do the business is your responsibility and you are compensated for doing your job.
Feb 14th 2008 10:14   

Dora Akingbade-Watson   Lifestyle Business Developer
Hi Guys,

I've posted a blog on this topic which should kinda "put it to bed".

Just my opinion, but I think we could better focus on succeeding and showing others how to do it.

My Blog is aptly titled "Garnet you've got me thinking...LOL!", if you want to check it out.

Cheers,

Dora


Feb 14th 2008 12:19   

Jenny Stewart   
A comment Cheryl on the "salary cap".

In the majority of businesses, the SALES AND MARKETING people are usually the employees who get paid a salary plus commissions on sales. It varies from nearly all commission to secure salaries with good bonuses.

In my experience of various businesses, including the multinationals - it is the sales people who have the most flexibility in salary. It is not uncommon for an insurance broker to earn more than his CEO!

The administrative people will always have more limitations on their salaries - but if they go into to a business and become multilevel martketers to get out of their rut - they are effectively moving over to the sales side of the business anyway.

I am sure that the people on the manufacturing side of businesses who use MLM are paid normal salaries. in fact the basic structure of businesses who use MLM to sell are invariably thte same as any other conventional businesses!..

MLM salepeople do not have any security or basic salary and as a result are often more motivated by their need to earn - and it is a cheap deal for the company, as they are all self employed.

Each to their own.




Feb 14th 2008 14:18   

Cheryl Baumgartner   Medical Billing/Coding/Insurance
Actually Jenny that depends on if we are talking an "employee" or a "contractor". There's a lot of confusion around those two terms. An employee is a w-2 worker, no matter what company they are in and they receive a wage that has been capped by the administrative end.

A contractor on the other hand is anyone who files a 1099. They are not employeed by the employers but have entered into a contract to provide service to the employer the actual payment is flexible and agreed upon by the employer and the contractor. All the employer does is give them a check for the work provided.
Feb 14th 2008 14:45   

Dora Akingbade-Watson   Lifestyle Business Developer
wow, the gloves are off - I'm outta here!
Feb 14th 2008 15:20   

Cheryl Baumgartner   Medical Billing/Coding/Insurance
Well everyone in MLM is a contractor. AND

When you go to buy a house, a car, insurance you are not dealing with an employee, you are dealing with a contractor.

Brokers of any type are contractors.
Feb 14th 2008 16:22   

Jenny Stewart   
I dont know Cheryl,

In many European Countries and, as far as I was aware, in the US too, employees of multinationals, on the sales and marketing areas often have a combined "salary package" of base salary plus comissions or incentives or target bonuses or whatever name they are given. this enables the people working in this area to have a gross paycheck which reflcts their sales performance, as well as a fixed rate.

I am not referring to independant conttractors or subcontractos, who of course have a totally different contractual relationship. In fact in businesses which sell using MLM, the salesmen are freelance and very frequently without any kind of mercantile contract with the main business..

What I think you have probably realised is that my one million objections to the "MLM" world are based on the gazillions of abuses that take place in many businesses, and regretably even in some of the few legitimate ones.

Your own business, from all that I have seen, is very much the exception to the many culprits that give a very bad name to multi level marketing. You are selling a service which is a sophistated one and falls outside the typical "jungle juice" manufacturing mlm businesses. Because as far as I can see, these are sold with so much hogwash surrounding them that it is difficult to know whether they sell anything of value that you cant buy in the local drug store, or even products that can be harmful.
Feb 14th 2008 16:31   

Cheryl Baumgartner   Medical Billing/Coding/Insurance
It comes down to how they file taxes. Most sales forces in the US are independent contractors or 1099 "Employees" Which means they are not actual employees but outside contractors in an agreement with an employer to provide a sales service.
Feb 14th 2008 16:36   

Cheryl Baumgartner   Medical Billing/Coding/Insurance
And I'm not arguing with you about MLM, I don't have a problem with MLM I have a problem with scams masquerading as MLM.
Feb 14th 2008 16:37