Linda asks…
How companies of MLM works?
- How does the money be shared across soo many downlines and yet the business can still profits?
- The economics of MLM model.
- What is their sustainability model (how they maintain their business without closing down)?
Ron M. answers:
To gain an understanding of the economics of MLM/Network Marketing you must study the industry. Once you begin your studies you will find that most companies use the same business model characteristics to build their company. The companies and the top business builders make profits while very few in the downline can claim profits. There are far too many studies that show 95%-99.9% fail to make a profit. Even the top companies claim average income of participants under $2000 per year while most people spend far more then that to build business. There are many websites supporting facts on why this model promotes failure. Sites that are not selling you on their solution. Sites that are informational only. Many MLM’ers/Network Marketers call these critics “close minded” or failures of the “great MLM/Network marketing model.” None of which can prove the claims to be false.
A great site to start studying the industry is http://www.vandruff.com/mlm.html
Jenny asks…
Why do so many people talk so down on networking bussiness?
Since MLM products (as a rule) are priced higher than what might be considered “retail” in stores there needs to understanding and consideration of:
a. MLM products have to be of higher quality than retail products to get customers to “feel better.” Time after time exposé’s on TV show that many items on a store shelf contain nothing but the equivalent of “sawdust.” To stay alive MLM companies “generally” have to produce higher quality products. To determine which are most effective requires a product by product test by the MLM seller. Only by personal experience can an MLM Distributor “bond to a product.” This “bonding” is an essential element of being able to aptly sell a product.
MLM IS A GOOD BUSINESS
Yes, there are some bad companies out there and pure pyramid schemes. Over all MLM is the Last hope in America for the little person to learn how to make money and actually do it. There are over 10 million people that earn a part time to a full time MLM income. People that hate MLM always ignore the part timer person because I swear the “Bashers” (see below) would rather have them washing dishes or waiting tables. My heart goes out to that divorced woman with 2 kids whose MLM income lets her spend more time with those kids. A woman who that extra $500 a month means the “world” to her and her kids. I look at the people making a living at $3500 a month that are happy. It isn’t just our industry that highlights the high income earners so does Franchising and all types of business opportunities besides MLM. It’s human nature to look at high dollar earners. Every year when college starts enrollees are looking at what graduates started earning when they graduated last spring. Priests and teachers are the only ones deliberately going into a low end earning business (they earn respect
WHY DO I THOROUGHLY DISLIKE MLM BASHERS
AND THEIR ACADEMIC FRAUD?
Most MLM “Bashers” (people that say MLM is no good) have never been close to a good MLM company. They took one bad experience and go bonkers about it. Their point of veiw is a pinhole to match the brain in. Most are wage earning tongue draggers that have not been outside their local city limits. Why do I get mad at them? I have global experience. I have lost more money in more businesses (the majority non-MLM) than those losers ever made! I have also made more money (some of it in MLM) than they could even remotely imagine! Most MLM bashers hate successful people. They go into a state of shock when they see “ignorant” people (by their silly standards) making money. The bashers never figured out that People without a P.H.D. are not automatically dumb. The bashers were outraged when they saw high school dropouts making $500,000 a year. Of course many bashers, that joined MLM companies, were really outraged when they found they would have to “share” or sell something. Work – on my no they cried! Bashers want people to live in cradle to grave society with no risk and wash dishes their whole life. They are the “new socialists” and work hard at destroying vestiges of the last bastion of economic freedom in America and the world! They totally ignore the “little” success stories outlined in the first paragraph.
http://www.mlmwatchdog.com/Report_MLMIsGood.html
Ron M. answers:
I think that MLM does NOT equal Pyramid Scheme. Don’t pay attention to ignorant people. It’s a great way to make money and be your own boss. I DO agree that LOTS of Pyramid Schemes in the past gave a bad reputation to a lot of Home Based Businesses, but oh well…. Who cares. Believe and move on…
Nancy asks…
Looking to open a business but dont know where to start….?
I want to open some sort of a business. I have been saving my money for years and then I lost my job after 15 years because the company closed down. I no longer want to work for anyone else but I know I need an income. I dont want any mlm companies they just arent for me. I was thinking of something online. I have been looking around but I really dont know where to start or if it is even a good idea. Guess I am just looking for someone to point me in the right direction or give me some insight on online businesses.
Ron M. answers:
First off, I’m sorry to hear about you losing your job. I recently was working at Toyota as a production laborer and at this facility they always told us if we were hurting in any way let them know because they are so called big on safety. Well as soon as I mentioned I was hurting do you know what they did to me. They fired me. So I know exactly how it feels to be fired from a job. Secondly, good job on saving up money because I know for some people the very second they get money they want to spend it. I’m proud of you. Thirdly, you are in the right direction for earning a good source of income. Business is something that is my passion and I will gladly suggest some ways to conquer this journey. The one positive thing about this field is that you will always have money, have the freedom from being told what to do, and will hopefully be doing something that excites you.
Now to answer your question on where to start as far as operating a business, the number one way I would suggest is that you start as a affiliate for some companies. If you don’t know what an affiliate is, this is a person that sells products for another company. As you sell these products the owner will give you like a 25-75 percent commission. You will have to do your own advertising, and you will be responsible for making the customer buy the products. By being affiliate for a company, you will get the fill for all the things that go on to operate a business. Then when you get ready to start your own commerce you will know exactly what to do.
Steven asks…
what do you think about people in the multilevel marketing business (MLM) ?
i have a couple of friends who worked for MLM ( the company name is quickstar) and they are A-N-N-O-Y-I-N-G..
these people are just soo lazy to do anything, all they do is brag about their company ( bcause they want to recruit as many people as they can) i dont think the way the do it will convince anyone to join their business.
its totally pointless anyways. what they do to get money is to get points ( they’ll give u brochures. it has all sorts of things from soap, groceries, vitamins, drinks, cosmetics, etc etc) and the price is not cheap, or even more expensive than general supermarkets ( like safeway, vons, whole foods, ralphs, etc)
ive never even heard of the brand of their stuff, at all.
what makes them think i would spend my money on something not reliable like that? and they are reallyy pushyyy. ugh..
and one day, this friend of mine called me ( we were close before, not anymore) and asks me to give him 50bucks because he needs it for his points. he ASKS for it, not borrow it or anything. tsk
several other friends ( who are in MLM) also called me to attend to this seminar about MLM. and she said that ” this is a really good and potential business, and instantly i thought of you! you have great potentials.” tsk tsk tsk. they said the exact same thing to everyone. haha.. and one guy who was reallyyy bitchy to my guyfriend, was REALLY nice when he joined MLM. like really2 nice.
before, he wouldnt even looked at my friend when he said HI.
what they really dont know is that we bought their stuff just because we feel awful. ( we are somewhat forced to buy their stuff because they’re my friend)
i think the business is ridiculous anyways. you just collect as many points as u can ( and the way to do it is to buy it YOURSELF. yes.. you buy the stuff at the brocuhes for yourself.) or recruit people ( cause when they join there is a fee and you’ll get comission from it)
and the “prize” if u collect many points is movies tickets, ice cream coupon, etc.
and if you are in a meeting with them, you’ll be treated with cheap buffet food. HAHA
sorry for being soo bitchy about this.. i have nowhere else to talk about this. =P
Ron M. answers:
What you have experienced is true to all MLM companies. They all use the same playbook; recruit family and friends into the business opportunity. Even though all MLM companies have a product or service, their primary goal is to sign people up into the “business opportunity”. The reason for this is what makes the business a fraud.
Recruiting new business associates instead of actually retailing a product or service is the primary goal because it is easier to sell a belief that you can make a lot of money with little effort. The products are usually overpriced and only exist to act as a “token”. What do I mean by this? When someone becomes a distributor, the only way for that distributor to be “eligible” for commissions is to purchase a required amount of inventory every month. Heck, if you recruit 10 people into the business, they all have to purchase inventory whether they have a buyer or not. If those in your downline are required to purchase $100 worth of product each month, then your downline makes $12,000 worth of purchases for the year. If you get a 10% commission on that, then you made $1200. But why did you make $1200? Because those in your downline are forced to make regular purchases. Essentially, you are getting paid to recruit others.
Who are the easiest people to recruit? The MLM playbook tells you to start with your family. Then move on to your friends. Next are your neighbors. Finally your co-workers. It is sad because MLM causes many divorces and family feuds. It destroys friendships and your neighbors will put you on their ignore list.
It is also known and proven that 99% of those who participate never make a profit. The MLM excuse for this is that these people didn’t work the business and are just quitters. However, it is the actual MLM business model that is mathematically designed so that no more than 10% of people in MLM could EVER make a profit at one given time. This is the most conservative model too! Actual tax surveys show that less than 1% of participants actually make a profit.
MLM companies are Pyramid Schemes and should be avoided at all costs. Network Marketing is legitimate, but Multilevel Marketing is not. “Multilevel” is the key word, which by nature of the word means it will construct a model that pays only a few at the top.
Donna asks…
What is your opinion of MLM’s and do you think they work?
I have been involved with sales these past few months and its really turned me off. I do not like the constant harassment and so feel guilty doing it to others.The company I am currently affiliated with is an MLM and I have read online and listened to many teleconferences but I just don’t like the tactics. You have to be a closed off person emotionally and view the individuals that you are approaching as giant dollar sign’s. I am sorry, but if I know the person financially can not afford the product, how the heck can I sell it to them, profit off of them and feel good about myself in the process? I have been told that its only business and that its the other person’s decision to buy the product or to invest into the company and that I didn’t twist their arm. But in essence….I did because I hounded them over and over until they just gave in to get me to leave them alone. To me that is not good business. I want my customers to come to me because they saw my ad and they are genuinely interested, not because I have called them 100 times or shown them multiple presentations. So what is your opinion of MLM‘s? Have you been involved with any and if so were you successful? What is your method of approach?
Ron M. answers:
Hi there,
I believe mlm’s are a sound way to create an extra income from home. I have been involved with MLM for the last 10 years. And when I first started I did what my sponsors told me to do. And it was much like what your going through now. Most people don’t realize that what they are teaching their downline is not duplicatable.
Over the last few years I learned that my lack of success was not my fault. I was being taught to do things that I know my downline couldn’t do. Like spending $2500 a month for leads. Which is not possible for everyone starting out in business.
One of my mentors Tom “Big Al” Schreiter says prospects are everyone. But we just need to take the volunteers.
Just for an example: Someone says I wish I had the money to buy a new car.
All you would have to ask is If they would like to do something about it.
They say yes. You have a new prospect.
They say no. You no there not interested.
And it’s 100% rejection free.
Hope this helps with your insight on mlm.
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