The most overlooked factor in choosing a MLM business
For someone looking at getting into MLM marketing, the biggest decision they are going to make is deciding which MLM business to join.
When contemplating various businesses there’s one factor that’s often overlooked but I believe is more important then business profits, company member numbers or even the products or services you’ll be marketing.
Forget all the external factors and focus on yourself: Are you going to feel comfortable marketing this MLM business?
Identifying if a MLM business opportunity is for you
The first step in deciding if an MLM business opportunity is for you is in knowing the business inside out. Push any income promises or dollar signs well out of your head.
Don’t listen to the nonsense claims often spouted by the PR department of the company in question or believing everything your potential upline or other distributors or associates tell you carte blanche.
Look at exactly what people in the business do day to day. Will you be marketing a product and if so what exactly does that entail?
How are most distributors or associates in the company marketing?
Is there room for you to join the existing market and carve out your own business or is the market opportunity already saturated?
If someone tells you they only work four hours a week but fail to factor in everything else they do to make their business work, then you need to do better and factor it in from the start. If after all the work they’ve put in are they getting a decent enough return to make it worthwhile?
Answer all of these questions and you should be left with a pretty good idea of whether or not you’re going to be comfortable marketing your prospective mlm business.
Seeing if you’re comfortable with what you’ve learnt
After you’ve ascertained the answers to the above questions posed the next step is quite simple: now that you know what you know, will you feel comfortable telling people what you’re doing?
Whilst I don’t recommend marketing to family and friends a good starting point to test your own comfortability with your prospective MLM business is to think about how they’d react if you told them what you were doing.
Then think about strangers, or more accurately potential customers or business associates. If I’m at a bar and someone tells me their an insurance sales person I’m probably going to roll my eyes and switch off. That’s the standard reaction you’re probably going to get when you tell people you’re involved in an MLM company.
What you need to be sure of is whether or not your comfortably passionate about the company or not. Sure the insurance salesperson knows his or her job bores most people to tears but they are passionate and comfortable about it; they don’t have any qualms about telling people directly what they do for a living.
Some people will tell you to simply discard any negativity and go for it, this usually means telling people what you do in a round about manner. I’m a firm believer if you’re passionate and comfortable with an idea you shouldn’t have to discard it.
You should be able to tell people what you do directly, address any negativity and conquer it. If you don’t have the answers to questions people are raising go back and check your sources till you do.
Don’t settle for spindoctored commentary and answers either, if people involved with or the mlm company itself can’t give you straight answers to your concerns then pay attention. Whatever you do don’t fall for the ‘listen do you want in or not? This is a very exclusive opportunity’ tactic that some people will try to pull on you.
Keep pushing until you’re not only satisfied but comfortable with the information you uncover. If you can’t get to that place then it might be time to start thinking about walking. If people in the business or the business itself can’t make you feel comfortable and confident, what are you going to do when you’re explaining the business to other people?
Once you’ve got all your cards on the table and are able to answer anything thrown at you with confidence and you feel entirely comfortable about doing it, then you might just have found the MLM opportunity for you.
As you have admitted in other posts on your blogs, you have never been in MLM, and you make money from this site, why should people take note of an author who is only here for financial gain and knows little about the subject matter.
Take off the Google Ads and we will see how interested you are in this subject matter! and we can then take you seriously.
Most movie critics have never directed or produced a movie either.
As mentioned previously Google ads have no impact on the information presented here. Nor do they affect the credibility.
You’re free to not take the information seriously as you wish, I’m not here to convince you either way. The information stands on its own.
Correct me if I am wrong Oz, but they have used the product, they have watched the film, they have not posted a blog to receive feedback and then taken a viewpoint, where as you have never been involved in MLM, yet you have put this blog together with you as the expert, and you are still avoiding my point, Take the ads off and show everyone that you are not here for the money.
I have never claimed to be an expert. I started writing about Liberty League International almost a year ago and have never made this claim. I’ve repeatedly stated ‘I’m just a guy with a keyboard’.
True, but to analyse a plot and filming techniques you’re implying you need to have gone through the process yourself. You don’t need to join an MLM company to analyse a comp plan or it’s product line.
Infact this is increasingly impossible as most company associates looking to recruit you won’t bother if they don’t think you’ll make them any money (which I won’t, seeing as I’m not interested in directly being a part of the MLM industry).
If the information such as comp plans and product lines are available online it can be analysed. With the products perhaps not in great depth but someone conducting research before joining a company probably hasn’t used the products either.
It’s that demographic I try to relate the articles to. I approach every article from the viewpoint of ‘what would I be asking if I was thinking about joining this company?’ and go from there.
You might disagree with this or not, I’m not too fussed. It’s how I write.
The money pays for hosting and some of my efforts. Your point has been addressed in that the ads do not have any significance on what I write about or the content of my articles.
OzSoapbox is over a year old now and has featured advertising since I started it.
If I was in it for the money it’d be far easier to join an MLM company and proceed to start recruiting people. I’m more interested in writing.
Thanks Oz once again for your site. You have saved so many people including myself from throwing more money into this so called business.
WHAT A LOAD OF RUBBISH sounds just like those at Polaris who told me that you were an Ex-Polaris member who had gone to Lifepath. More Lies.
Most of us who read your blogs are so grateful for you.
My friends and I joke about how stressful Polaris was – one couple took up smoking again after 3 years of quitting and another went on medication for anxiety. Apart from little in the finances department I never had anytime for my family. Long work hours and all important calls were at kids bedtime and sports times. Could never get over the Saturday morning calls. My advisor was always annoyed because on Saturdays I was at my kids sport.
Just look at Rachel Oliver – she is incredibly jittery and anxious person. Thought personal development would help you give up smoking.
Never ever again will I go down that MLM path.
Here we go, I am not here supporting any business at all, I have my own Traditional business for my sins, I was pointing out the facts, I don’t care what business you have or have not been in, Dubli, Lifepath, Polaris, Give Opp, Smartline 360, or any other that gets added here.
The bottom line is, this site has been put together to make money, and when that is the case, whoever the author is, they are inclined to post things that will spark off comments and rank the blog higher to make more money.
As I have said before, Oz is good at this, and his main concern is making money, and if I were looking at the Blog before I started an MLM business, I would have to say, this is a business and not a blog, and therefore not take any notice of it.
But that is just my opinion, but who am I? and I believe anyone here can have an opinion, also, You could be Oz as well, telling yourself how great you are, lol.
Cheers guys, I have to go, Oz, I don’t know where you find the time for this. But then you are getting paid, lol
Yes because any website using advertising can instantly be discarded as containing information that is not credible and useless.
You must have a hard time finding credible information on the internet.
I’m in the business of information and you’ve yet to disprove any of the information provided. Thanks for stopping by.
Wouldn’t worry me if Oz was making millions from this blog (which he is definitely not).
He is saving so many of us from destroying our lives with these scamming business.
He actually deserves some money for all he has done to help so many people.
I put at least $30 000 into Polaris and nearly put in more. If it wasn’t for Oz so many of us wouldn’t have know what was going on. He has been correct so much which didn’t come out till alot later.
If you weren’t involved in this MLM company (WHAT A LOAD OF RUBBISH) you wouldn’t understand all the brainwashing that was done.
Thanks Oz.
No offence “Was Scammed” but I think you have your wording the wrong way around, but I get your point.
All the businesses listed on here will have people not make it, every traditional business will have people not make it.
I lost 100k in a traditional business, the person who eventually bought the business, made 970k, millionaire in 9 months.
Shit happens, but it was my lack of business knowledge that cost me, not the opportunity.
All the companies that Oz has started blogging about on here sell a product and provide a payment plan of some sort, that is it. Then it is up to the business owner to go out and make it work. Some will and some will not, people are made of different stuff, people have different marketing budgets, people have different work ethic, what makes people tick, I do not know.
That is what Oz is relying on to make his money, some people that do not make it in any online business venture will say it was a con, rather than admit that they made mistakes themselves.
When people fail in traditional business, they will say that is fine, I had a go, the economy was bad etc, even if they run the business into the ground.
Oz will always find people like you to back him up, and you could be Oz in-fact, Oz is only concerned about one thing, making money from Google. That is why he/she started this blog, and that is my point.
Ever since I started writing about Liberty League I’ve had people write to me asking if I can write about other companies they were doing research on and/or were interested in joining.
I always put it down to not having enough time but I acknowledged the demand was there. Finally realising the demand for a similar non-marketing spin bullshit perspective on other companies wasn’t going away I asked on OzSoapbox what everyone else thought.
I’ve got an incredibly tight schedule at the moment between work and writing for OzSoapbox and here but it’s still rewarding. I’ll still aim to publish daily on OSB but BehindMLM can be a little more relaxed.
If I was just in it for the money I’d have long abandoned OzSoapbox and started a seperate MLM blog months ago.
Blogging isn’t just set and forget, you’ve got to have some sort of passion behind it. Writing day in and day out isn’t something that can be forced in the long term. Why do you think the internet is full of so many abandoned MLM marketer’s blogs?
Oz you are cool and you do also do some good work here, I was mearly pointing out that this is a business for you, you know where I am coming from, as I have said, you are a good blogger, interesting stuff sometimes.
I have critically evaluated many MLM opportunities over the years. My main criticism revolves around the numbers required to make money in the scheme by recruiting.
Often it requires so many people in the matrix that it is impossible to imagine that many people working in that opportunity. The only people making money from their downline are the originators of the scheme.
Often the product or service being marketed is playing a very secondary role to the recruiting and payments from sign up fees. I don’t see any value in paying money to join a scheme despite the rhetoric about investing in yourself or other justification for paying for nothing.
I also think making signups join an autoshipping programme to guarantee downline commission is a dubious practice. Its pyramid selling in every way and is theoretically illegal ( at least where I live-UK).
I don’t care if Oz makes money from this site or any other site he has. At the end of the day programmes like Google adwords are endemic all over the web and no one is forced to click on them.
Sounds like What a load of rubbish has a hard time accepting the state of MLM.
They sound very similar to the others who have jumped into MLM without researching. At first they’re pissed off at Oz for basically what seems like him badmouthing the crap out of their business. Then after they discover it’s all true, they become pissed off at themselves for finding the truth – too little too late.
I’m not putting the blame entirely on the “leaders” themselves; each person needs to be responsible for their own (lack of) research.
I’d be pissed off too if I had fallen for one of these “businesses” when all that was required was a little Googling to realise what it was all about.
The fact is, many if not most of these leaders have some sort of criminal record, usually involving fraud. Many are linked to Scientology (personal preference whether that bothers you or not), and are just downright ruthless and full of crap. There may also be another pattern with this leaders of having a falling out with their parents at a young age which leads to them being this way, but I digress.
This information is out there, but sometimes requires digging a little deep. All Oz is doing with BehindMLM is bringing this info closer to the surface and making it easier for people to find.
If you have a problem with this, then maybe it’s not Oz you have the problem with… maybe it’s yourself for not discovering this information sooner.
I am not in MLM Vince, But I do know some guys make a lot of money in it, Mike Dillard for instance, Jonathan Budd (ex LLI), Richard Branson, Donald Trump, Frank Kern, yes people need to research, but not here. You have the same half a dozen people putting every other company down, and the people looking here should know that.
People in any business also need to be accountable for their own results, in any business in the world, people win and people loose, people get off their arse and people do not, people have massive enthusiasm and people are boring gits who will never make it in any business.
I have been in traditional business for many years, and the same applies there. You see people put many thousands into a traditional business and fail every single day. No one says that the company they leased the business off is a con, you only hear that in the online industry, that makes me laugh.
I would succeed in a MLM, because I would succeed in any business that I started, and that is the bottom line, you either have or you don’t. It is nothing to do with the company, or business or leaders as you call them, I know if I started I would be a leader, not sit at the bottom waiting for things to happen.
As for religion, read my earlier posts, I am a total atheist, every single business in the world has every single religion in it, every single job has every single religion in it. Facebook has every religion in it, but I bet you use it? WordPress too, and you are here, I bet someone in WordPress is in the religion you don’t like too.
Shit happens, get over it.
You are wrong, MLM and Network Marketing are not illegal in the UK, there are many MLM companies in the UK, including Sir Richard Branson with make-up and even Jamie Oliver the Chef has just launched into network marketing.
Then you have Avon, Herbalife for many years, Forever Living, for many years, and 100’s of others. Here is Jamie Oliver in The Times, http://mlm.business-opportunities.biz/2009/03/24/forget-tupperware-now-it%E2%80%99s-pukkaware-parties-from-jamie-oliver/
I did not say MLM/Network marketing is illegal. I said pyramid schemes are illegal and likened the practice of forcing members into autoship programmes to guarantee commission to that of pyramid selling and is sailing very close to illegal in all but name.
You should read posts properly before jumping in. You seem to be paranoid of criticism of mlm/network marketing which is strange for someone who doesn’t have a vested interest .
@what a load of rubbish
Can I ask then how you came across this site? Given that its content is only related to the MLM/Network Marketing industry, if you’re not involved in MLM nor seemingly have any interest in joining one – how exactly did you wind up here?
Not that you’re not welcome, by all means contribute to the discussion and share your views, I’m just curious where you’re coming from.
I don’t particularly care about curtains too much yet you’d never find me participating in discussion on a website about curtains (no idea how I’d wind up there if I had no interest in the topic) telling everyone I have no interest in curtains and prefer venetians myself. Just seems a little strange doesn’t it?
I think a major part of the problem is the way the online MLM/Network marketing industry is marketed. You often have promises of wild incomes and a complete watering down of the effort required to make a sizeable income.
In an offline business you don’t neccessarily have someone or a group of people or the company itself promising you big ‘multiple six figure incomes’ for ‘just a few hours a week’ work. There’s also much more incentive for online MLM/Network marketing companies to be directly involved in people’s business’ as their success directly impacts their own.
Additionally even if you fail in an offline business you’ve still got something tangible to sell. People trade non-profit generating businesses offline. When it comes to an online MLM/Network marketing company however, if you decide to quit you’re left with nothing. If you don’t convince your downline to quit with you, you have no assets or organisation to sell on to somebody else. Hell, leave it long enough and you’ll usually be stripped of your commission eligibility and eventually drop off the company radar altogether. Your downlines move up to the next associate and it was like you were never there.
Unless you’ve got a wildly loyal downline following you around, you don’t ever really own the organisation you build with a MLM/network marketing company, the reality is the company owns it.
Um… what?
I’m going to let the arrogance of stating you’d have a 100% success rate in starting any business stand on it’s own.
You keep mentioning your religion so I can only assume you’ve found BehindMLM after searching for either GiveOpp or Polaris Global. I’m undecided about GiveOpp but Polaris Global is the only other company I’ve suggested that is affected by religion.
On the other hand you’ve stated you’ve got no interest in the MLM/network marketing industry though so that brings us back to square one, how exactly did you come across this site?
@What a load of Rubbish
If you would succeed in any business because you either have it or you don’t; I’m assuming your saying you definitely have it, then why on another article on this blog titled “The Most Overlooked Factor in Choosing a MLM Business” did you state the following…
Oops, smack on the hand for you. Looks like your porkies are catching up with you.
Absolutely, correct, and as you can see, It cost me a lot more overall, the business was very successful, but because I was naive, it cost me a lot of money at the time, via the sale of it, and timing, and as I said in that post, shit happens in business, get over it.
Great question, I sell a multi output product online that all business owners can use, to maximise their ad spend, one of my target markets is Network Marketers, I found you when researching.
This is not the case in most businesses, most offline businesses are very hard to sell, and most people end up selling for well under the perceived value in order to get rid of their liability, the majority fail, and end up with nothing at all, and huge losses.
Even the successful ones struggle to sell because in most cases, the business is the business owner, and that is not saleable, leaving you with only stock, and a leasehold, which is worthless to someone else as a viable business.
Regardless of the difficulty, at least you still have something to sell.
Try sell your ‘organisation’ in an MLM after your company has shifted your downline to whoever your upline was.
The nature of MLM/network marketing is what it is. There are pros and cons to every business. The majority of business owners will not be successful. That’s the plain and simple truth and I believe it comes down to just a handful of reasons – lack of understanding/skill, lack of the necessary disciplines and mindset required to be successful and most importantly, insufficient capital for long term success.
The majority of people who join a MLM company seem to think they can earn mega bucks for next to nothing in upfront investment and fail to understand the need to invest an even greater amount into their advertising budget on an ongoing basis (unless they’re willing to talk to anyone and everyone with a pulse and let’s face it, that’s why MLM really has a bad name and most people just aren’t willing to do that long term if at all).
The real problem that everyone having a whinge here needs to address is personal responsibility and accountability. I know I’m going to cop a pounding for daring to say this but that’s all it comes down to people. Regardless of the nature of the business success comes only to those who pay the price of discipline and sacrifice and if we look at every great entrepreneur they have all, in some way, failed their way to success.
And before you all start on me, NO…I’m not a Scientologist (but I did love Avatar!!!) YES I’ve lost money (LOTS OF IT) and YES I’ve made money (LOTS OF IT) I’m proud to be an entrepreneur. I work hard. I don’t scam anybody, I run a legitimate and viable business from home that happens to be MLM and I too have failed my way to success.
It’s time for us all to just get on with what we do and focus on what we can personally achieve for a better future for us all.
@ Truth Prevails
What you share makes sense, and yes, there is personal responsibility and accountability that needs to happen. When I was introduced to Liberty League aka Polaris Global, it was through friends. They were so excited about the business and had already experienced huge success in their first 2 years and thought for sure that I would also be just as successful and of course wanted that for me.
Their excitement rubbed off and after a few conversations about the business, I was in. Looking back, it was a very emotional decision and one that lacked due diligence. When I asked my friends about the negative comments on the internet they said that was a lot from the competitor, Life Path, and also just folks who were just not cut out for this business and were venting their frustrations.
Since I was focused on the prize (6-figure income and a more free lifestyle), I disregarded the negative comments, and did not further investigate. In a matter of 8 months I became part of the 97% statistic who failed and lost approximately $35k.
Had I stuck with it, I know that I could have eventually succeeded (I passed up several thousand $$ of sales to my upline), but I didn’t have it in me to build a team of people, most of whom would fail and suffer great consequences financially.
To me, that is also taking personal responsibility…understanding the consequences of our behavior in business as well as in our personal lives. This is nothing new and is widely seen in the corporate world and in government too. However, if this site helps to wake up one individual to just do their due diligence first before making an emotional decision to spend thousands on an MLM business, then great.
MLM businesses are all about emotional marketing, underlying big promises of financial freedom, escape the rat race, live the life of your dreams, etc. Nothing wrong with any of it, however, the very business that promises this, could be the very business that moves you further away from it.
At last, a couple of sensible and balanced comments, great stuff guys.
This is an interesting conversation to say the least.
I know ‘MLM’ is a kind of catchphrase, but most ‘real world’ business operates on a similar kind of structure do they not?
Producer = ladder bottom, he gets his bit.
Wholesaler = next up, he gets a bit more when he sells.
Retailer = gets more.
Owner of retailer = gets the most.
Customer = end user that gets nothing for buying (97%+)
I am not endorsing MLM by any means, but there is similarities to any kind of business IMO.
I responded to an ad last year, and lo and behold, it was for LLI. Lucky for me I have a rather maths based brain function and tend to be an analytical bastard. I listened to the spiel and answered the questions the right way so I could get in on ‘the call’, I listened in on the call and then I researched the ‘product’ etc….and decided that I could NOT in good conscience, resell the so called product and support their policy of charging $100+ a month just to have access to basic tools along with the ludicrous prices of seminars.
Could I have sold it? Absolutely, I used to sell ridiculously high priced electronics setups by dodgily made appointments many (17 or so) years ago and averaged 25-30 sales a month ($5k/system).
The inability to be able to ask questions, or for the questions they don’t want to answer going without response raised a few flags. I have seen enough MLM stuff to know what’s what, My parents were in Amway, Sunrider, Herbalife etc…I would always listen and read up on the ‘how badly do I have to bastardise myself to make this work’ material, but never joined.
I am sure that one day, one will catch my eye and I will have a go, but until then I guess I will just have to keep on working….or maybe start a blog cause I hear there is MASSIVE amounts of money in that! (It’s a joke people….)
Thanks for the blog, your opinions and the info Oz, I always enjoy reading your stuff, even when I don’t agree with you.
They key difference here is that the customer in MLM is also relying on the company for an income. Wheareas out of MLM, the customer (unless they are a shareholder or such), have no financial tie to the company.
They are paying for a service or good, not permission to re-sell something to others.
Yes, yes… BILLIONS! :).
I realize the difference, but I was pointing more to the fact that the customers/bottom of MLM equate roughly to the same thing. They end up buying stuff for no return on what they buy whether expected or not. There is the odd exception where people purchase from a friend in MLM because they like the products, but are not a member…same thing.
For instance, I did indeed use herbalife products for a time, and they did good things for Me, but I was not part of the company, I bought My products from My sister. I stopped buying them because My income reduced by a fair margin quite suddenly and lets face it, the products are not cheap… I contemplated joining to get a discount on them, but all in all it was not worth it in My mind.
I felt good, but not good enough to preach the power of the ‘kool aid’ to others, if they asked Me what I was doing, I told them and sent them to My sister.
That being said, I did hear an interesting tidbit from a friend today, when I find out more I shall throw it before the soapbox congregation for dissection.
In the mean time, I am off to find out about these lucrative blogs! 😀
Indeed, someone who actually likes the products in a MLM company IS the odd exception 🙂
@Jeff
If someone is buying into an MLM business then there’s definitely the expectation of a return. Nobody goes into MLM with the mindset of making no money.
A retail customer on the otherhand has no expectation other then product being purchased working as intended.
That’s a description of a retail customer though and it’s not the same thing. A retail customer has no intention of looking so secure an income by joining the business.
I find it truly astounding that anyone would have an objection to people investigating an MLM opportunity to discount advice which essentially encourages them to do their “due diligence”.
That DOES mean ensuring that the products the company purports to sell is going to be possible for a person to sell in the real world and compete in price with similar products on the market. That also means that the person should ensure that they are going to have a market to sell the products to – particularly when you consider many MLM companies prevent their representatives from advertising in traditional means and supplying to retailers. These are factors which a person must take into consideration when the reality is that network marketing/person to person selling really is a rather inefficient means of distributing products when competing with the retail market – it’s not the way of the future despite what these companies promote.
MLM participants refer to their activities and involvement in these ventures as running and operating a business – so it’s inconceivable that people, just as they do in traditional business, don’t obtain third party advice from an accountant and a lawyer to ensure the viability of the proposed venture and legality of the scheme (we all know that pyramid schemes and product based pyramid schemes are able to operate under the guise of an MLM and it is essentially a few retailing rules which separate one from the other).
Unfortunately for the legitimate MLM companies, this is an industry rife with exaggerations and misrepresentations (both about the products/services offered and the opportunity), it is an industry where often the “customers” are the sales force itself and statistically MLM participants for the most part not only make little to no money, but lose money.
But as you have pointed out, Oz there’s more than just the financial consequences of pursuing such schemes – people for the most part don’t want to be pressured into purchasing goods and definitely not by a person with whom some type of relationship exists.
Finally, there’s also the ethical issue of enrolling their nearest and dearest into such as scheme and the strain it may place where the appropriate investigation hasn’t been undertaken in pursuit of the dream of “financial freedom” and where the most likely scenario is….financial loss.
The problem with MLM is participants can’t seem to separate the network from the marketing. While network marketing involves both, the PRIMARY word is MARKETING, not network. Marketing is primary, as you are out to SELL things. Networking is SECONDARY.
Those who emphasize recruiting / network-building over marketing/selling is simply doing it wrong.
That’s one of six points I raised in my article
http://hubpages.com/hub/Network-Marketing-What-You-Need-to-Know-Before-You-Join
This is enitrely true. One of the greatest objections to MLM/network marketing I’ve heard is directly related to selling – people for the most part don’t want to sell.
However from what I’ve seen from the MLM industry itself, participants generally aren’t taught to sell products. They’re taught to sell the opportunity.
Furthermore, many of the compensation plans actually provide the fewest rewards to the front line distributor for retailing a product, with greatest rewards being promoted and offered for those who are able to recruit large downlines. And you will get the behaviour you reward.
The ones that provide the most (or all) compensation to recruiting are the ones that are most suspicious of pyramid scheme.
The US FTC rule is 70% or more based on sales, else you’ll be declared a pyramid scheme.
The complexity of some of those compensation plans should also be of concern to anyone. Clearly it wouldn’t be inconceivable that a complex pay plan may well also be an attempt to conceal a scheme that’s heavily geared to transferring the majority of majority of funds to the top.
I’m not aware that many, if any, MLMs reveal what percentage of the revenue is derived from the investments and purchases of its own sales force and what is derived from non-participants.
Furthermore, I haven’t seen that many MLMs ensure that distributors are abiding by the retailing rules either and that bonuses and commissions are being paid based on bona fide sales to non-participants – a red flag in itself as far as I’m concerned (and as US case law would also suggest such as the case of Webster vs Omnitrition).
I really doubt there’s an MLM company out there that has a higher retail base then a member base. Especially seeing as with half of them you can’t even buy the product without signing up in one way or another (even if it’s as a member not taking part in the business opportunity itself).
So long as the dollars keep rolling in and the regulators are too busy to conduct a detailed analysis into the inner workings of every company, why would they.
Even if management get busted, they just lie low again for a bit and then relaunch some other company.
I have to say I’m inclined to agree, Oz.
I’m almost certain that if an audit were performed to ensure that the majority of profits were from non-participants, many MLMs would fail on this point alone.
Blurring the line between the sales force and the customer base is almost certainly done with intent for this reason – the whole concept of having a “customer” agree to the same terms and conditions as the sales force is absurd and to offer the same discounts to customers as is offered to the sales force (as I’ve seen done with certain MLMs) is guaranteed to destroy a distributor’s retail market.
There certainly appears to be a track record of certain individuals in the industry who are involved in these types of scams.
A very high percentage of Send Out Cards users are not distributors. In fact, I think it’s near 40%. Send Out Cards has a very strong retail product that is 1/5 the cost of competing retail products. I’m a Send Out Cards distributor and about 80% of my income is derived from volume, not commissions.
David, please submit the data which verifies the statement you just made – that is, that 40% of SOC users are NOT distributors.
I can see in the 2009 SOC income statement that 44% of distributors didn’t qualify for commissions – but that doesn’t mean these distributors (who signed a distributorship agreement and agreed to the terms and conditions as the sales force) weren’t pursuing the venture, it merely means they didn’t meet the required criteria to be considered “active”.
In fact, we’ve established that we haven’t seen that any MLM provides data which accurately differentiates between customers and distributors.
Looking forward to you verifying your claim.
I agree, 40 % is a very high percentage – if we talk about the MLM industry alone. But in all other businesses it would be a catastrophy.
Compared to cigarettes: If there were 10 people in the world smoking cigarettes, and 6 of them were selling (nothing but) cigarettes, will they make money to finance their own consume of cigarettes?
To not be considered as a pyramid scheme in USA, at least 70 % of the turnover must be generated from sales not related to recruiting. If we pretend that the average customer buys an amount of products corresponding to the monthly minimum order a distributor needs to earn commission, it means that two thirds of the distributors do a sale (if 40 % of the members are customers only). But the last third is not making any sale to customers and have to consume (and pay for) the monthly minimum.
This means that 33 % of the turnover is related to recruiting only, and that MLM companies with a customer percentage of only 40 in most cases will be illegal in USA.
Hi. Just discovered this site and really appreciate the honesty. So, are there any reputable or ethical MLM type companies out there where you can make some money without scamming anyone and being afraid to tell anyone what you do?
All candid and honesty feedback would be greatly appreciated.
Cheers
BehindMLM isn’t about recommending one MLM company over another, it’s about reviewing the various MLM opportunities out there through analysis of their business models and public discussion.
Hello! I’m an entrepreneur and in the mist of planning my first startup business. I’m currently doing research in the Direct Sales Industry & MLM. This is how my idea/business will be sructure.
I’ve read a lot of these posts and I have got some good feedback from them. This blog has been very helpful. I like what I’ve read so far.
My idea will and must be in compliance within FTC and states laws. When I’m in pre-launch I welcome OZ (BehindMLM) and others like it to review my Direct Sales startup business. Keep up the good work.
I have been reading all comments on this site and i found them useful and informative but please i will really be happy to please suggest me good home business, affiliate or Mlm someone like me can go into without looking back.
Thanks.
Ultimately your due diligence is up to you. You won’t find any company recommendations on BehindMLM.
There is no such thing that one can suggest from afar, because YOUR SITUATION IS UNIQUE. Any one that suggests there’s an “universal” or even a “popular” solution to your financial situation is a liar.
YOU have to identify the needs in YOUR local area, and find a way to fulfill it, preferably with a “higher barrier to entry” (i.e. something only you and maybe a “few” other people can do in your area). That will eliminate competition, and give you a chance to grow. And obviously it needs to be profitable.
There is no easy way to money without paying a DIFFERENT price (such as in social relationships, or compromising your ethics, and so on). Any one who tell you otherwise is a liar. It is the simple truth.
The people you see as “successful” in so-called home biz, MLM, or whatever are probably fleecing their downlines and taking them from one “opportunity” to another, sucking their wallet dry a bit at a time until they are poor, and then someone else is recruited to take their place.
There are a few exceptions, but VERY VERY FEW, and chances are excellent that you ran into the scamming type (or people who are deluded/tricked).
Thanks Oz. Don’t mind the critics. In every industry or sector of human society – there’s a market for those who stand by the wayside to look more critically into the unseen by those who are on the fastlane of daily life.
As you use your binoculars to spot the ups and downs, stains and brains on the MLM Industry, you deserve to be compensated. Remember, the system you criticize, even constructively, will never like you enough to promote or pay you.
Thanks to Google for paying you, as was alleged. Even as MLM doesn’t pay you. For us in the industry, BRAVO!!!